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Chorus Eyes More Part-out Business

MRO work is part of diversification strategy.

Chorus Aviation is finding success with its fledgling part-out business and could expand it beyond out-of-production Bombardier Dash 8s and CRJs to newer aircraft, executives report.

The company, which is diversifying its strategy to rely less on the regional flying its Jazz Aviation subsidiary does for Air Canada, has parted out 10 aircraft, and recently purchased two more--both Dash 8s--to support its Avparts business.

"We generate healthy margins on this business, and we see potential for growth," says Chorus President and CEO Joe Randell

Chorus's MRO work also includes performing Dash 8-300 extended service plan (ESP) upgrades under a deal with Bombardier. Chorus subsidiary Jazz Technical Services recently completed the seventh of what is expected to be at least 19 aircraft getting the ESP work, which adds about 15 years to an airframe's service life.

Chorus has 26 Dash 8-300s and 18 CRJ200s in its fleet that benefit from its current part-out strategy,  and sees the potential to broaden its scope.

"The types of aircraft that we've been purchasing and parting out are very old...Dash 8 turboprop, some CRJs that we bought without engines," says Jolene Mahody, Chorus CFO."As we grow the business... we would like to move more toward in-production aircraft and start to part out those."

The push into MRO is part of a broadening of a portfolio that relies heavily on Air Canada. Jazz operates 116 aircraft to 78 destinations for the Canadian carrier--work that earned Chorus 89% of its second-quarter revenue. While still substantial, the figure is down from the 93% share from the year-ago quarter--a sign that the strategy is beginning to pay off. 

Chorus's strategy includes growing its third-party leasing portfolio, which now stands at 23 aircraft.

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