Chorus Aviation (TSE:CHR) executives highlighted a year of significant portfolio activity, capital returns, and improved adjusted earnings during the company’s fourth-quarter and full-year 2025 results call held February 13, 2026. Management also outlined an updated capital allocation framework and provided consolidated guidance for 2026.
Management emphasizes a “pivotal” 2025
President and CEO Colin Copp said 2025 marked “significant progress” for Chorus, pointing to reductions in overhead costs, the initiation of a quarterly dividend, capital structure optimization, two substantial issuer bids (SIBs) alongside a normal course issuer bid (NCIB), and “substantially” reduced corporate debt.
Kadex acquisition, dividend increase, and new NCIB
Alongside fourth-quarter results, Chorus announced three updates tied to its long-term value and free cash flow strategy.
First, the company disclosed an agreement to acquire Kadex Aero Supply, which Copp described as a complementary OEM aviation parts, repair and overhaul platform. Kadex distributes OEM parts for aircraft platforms including Beechcraft, Cessna, Hawker, and Piper, and also supplies consumable products from brands such as Shell, Goodyear, Michelin, and Champion to a range of aviation operators. Copp said Kadex complements Voyageur’s used serviceable material (USM) business and fits the company’s strategy of acquiring growth businesses.
CFO Gary Osborne said the total consideration is approximately CAD 50 million, with CAD 43 million to be funded at closing using Chorus’s operating credit facility and cash on hand. The remainder is payable over the next two years, subject to performance targets. The deal is expected to close in the second quarter of 2026.
Osborne said the transaction implies an estimated purchase multiple of about 7.5x EBIT, noting Chorus used EBIT because Kadex has “little to no capital requirements.” He added that Chorus expects the deal to be “immediately accretive” to earnings and free cash flow from closing.
Second, Chorus announced it is increasing its annual dividend to CAD 0.44 (CAD 0.11 per quarter), up from CAD 0.32 (CAD 0.08 per quarter). Osborne characterized the change as consistent with the company’s plan to distribute roughly 25% of free cash flow after payment of amortizing term loans. In response to analyst questions, Osborne said the company would revisit the dividend annually and reiterated the 25% framework.
Third, Chorus said it will continue repurchasing shares. Copp said the company bought back CAD 85.2 million of shares in 2025. Osborne added that Chorus is committing to purchase up to CAD 100 million in shares over the next four years (subject to TSX approvals and the share trading price) and will implement an NCIB to repurchase up to approximately 2 million shares over the next year. He said Chorus has spent CAD 124 million on buybacks since 2022, retiring about 19% of outstanding shares.
Capital allocation outlook and 2026 guidance
Osborne outlined a four-year capital allocation plan that anticipates generating CAD 500 million to CAD 550 million in free cash flow and net proceeds from asset sales. The company also described a “flexible” capital allocation range of CAD 170 million to CAD 220 million over the same period for organic growth, acquisitions, additional buybacks or dividends, debt repayment, and working capital investments.
Osborne highlighted scheduled repayment of CAD 190 million of amortizing term loans over the next four years, adding that those repayments “reduce significantly” in 2028 and 2029 as debt tied to 18 aircraft leased under the capacity purchase agreement (CPA) is fully repaid by the end of 2028.
For 2026, Chorus provided consolidated guidance in its MD&A, including:
- Adjusted EBITDA of CAD 170 million to CAD 185 million
- Free cash flow of CAD 100 million to CAD 110 million
2025 financial results: higher adjusted EPS, lower Q4 EBITDA
For the fourth quarter, Chorus reported adjusted earnings available to common shareholders of CAD 0.57 per share, a CAD 0.23 (68%) increase year over year. Osborne attributed the increase primarily to lower net interest expense.
Adjusted EBITDA in the quarter was CAD 47.1 million, down from CAD 51.0 million in the prior-year quarter, which Osborne said was primarily due to lower aircraft leasing revenue under the CPA. Free cash flow for the quarter was CAD 27 million, consistent with Q4 2024.
At year-end, Chorus’s leverage ratio was 1.7 versus 1.4 at the end of the prior year, which Osborne said was primarily due to excess cash held at the end of 2024 and investment in a SIB in the fourth quarter. The company ended the year with CAD 169 million of available liquidity.
Osborne said Chorus expects liquidity to remain strong as the company generates free cash flow and receives net proceeds of approximately $56 million (about CAD 78 million) from the sale of the remaining eight Dash 8-400 aircraft, expected to close between February and July.
Operating updates: Jazz stability, Voyageur mix shift, Elisen and Cygnet growth
On the operating side, Copp said Jazz delivered steady contracted earnings and solid operational results under the CPA with Air Canada and made progress on its cabin refurbishment program. He also noted that Jazz and Air Canada announced expanded flying from Billy Bishop Toronto Airport to four new U.S. destinations, anticipated to ramp up starting in late March 2026. During the quarter, Jazz reached a new five-year collective agreement with AMFA, the union representing its maintenance employees, and continued to focus on safety, operational performance, and pilot supply.
Copp said Voyageur is shifting its business mix toward higher-margin defense, specialty MRO, and parts. He noted the company sees upside in parts as Voyageur expands into new platforms such as ATR, including acquiring aircraft for teardown. While Voyageur’s fourth-quarter part sales were “slightly down from plan,” Copp said this reflected timing as two large sales packages moved from December into 2026 and are expected in the first quarter.
Osborne reported Voyageur generated CAD 135 million of revenue in 2025 (inclusive of intercompany revenue), about CAD 5 million below projections. He attributed the shortfall to the timing of certain larger aircraft parts sales and the “spooling down” of UN and World Food Program missions, while reiterating that most delayed parts sales are expected to conclude in Q1 2026.
On defense work, Copp said Voyageur is supporting Canada’s MAISR operation and providing in-service support through a team of 20 embedded specialists working with Department of National Defence personnel. He also said Voyageur is set to provide in-service support to DND’s Aerospace Engineering Test Establishment (AETE), supplying an aircraft and maintaining an on-site presence at an Ottawa DND facility. In Q&A, Copp said interest and engagement with government opportunities has increased, while noting defense contract timing can be “lumpy.”
Regarding Elisen, Copp said the engineering firm has begun working closely with Voyageur and was awarded a contract by the Quebec Ministry of Transport and Sustainable Mobility to configure a Bombardier Challenger 650 for medical emergency air transport. Elisen will provide engineering expertise, while Voyageur will provide maintenance for the reconfiguration.
Copp also said Cygnet had a strong year of growth and expansion, recently starting its largest cohort of 18 new students and expanding through programs including a free agent program, the Destination Porter Cadet program, and the Jazz Approach Cadet program.
About Chorus Aviation (TSE:CHR)
Chorus is a holding company which owns the following principal operating subsidiaries: Jazz Aviation, the largest regional operator in Canada and provider of regional air services under the Air Canada Express brand; Voyageur Aviation, a leading provider of specialty charter, aircraft modifications, parts provisioning and in-service support services; Cygnet Aviation Academy, an industry leading accredited training academy preparing pilots for direct entry into airlines; and Elisen & Associates, a leading provider of aerospace engineering and certification services.
