Chorus Aviation (TSE:CHR) delivered an impressive performance in its fourth quarter and full-year results for 2025, highlighted during an earnings call on February 13, 2026. The company reported significant improvements in adjusted earnings, portfolio activity, and a new capital allocation strategy, showcasing a pivotal year for the organization.
President and CEO Colin Copp described 2025 as a year of “significant progress.” He pointed to reduced overhead costs, the initiation of a quarterly dividend, and optimization of the capital structure. Notably, Chorus executed two substantial issuer bids (SIBs) along with a normal course issuer bid (NCIB), which contributed to a “substantially” reduced corporate debt.
Strategic Acquisitions and Dividend Increases
In conjunction with the fourth-quarter results, Chorus announced three key updates that align with its long-term value and free cash flow strategy. The most notable was the agreement to acquire Kadex Aero Supply, a business that complements its existing operations in aviation parts, repair, and overhaul. Kadex specializes in distributing OEM parts for various aircraft models and supplies consumables from brands like Shell and Goodyear.
The total consideration for the acquisition is approximately CAD 50 million, with CAD 43 million to be funded at closing using Chorus’s operating credit facility. The balance will be payable over the next two years, contingent on performance targets. This acquisition is expected to close in the second quarter of 2026 and should be “immediately accretive” to earnings and free cash flow from the point of completion.
Additionally, Chorus announced an increase in its annual dividend to CAD 0.44 (up from CAD 0.32). Chief Financial Officer Gary Osborne stated this decision reflects the company’s plan to distribute approximately 25% of free cash flow after servicing amortizing term loans. The firm also committed to purchasing up to CAD 100 million in shares over the next four years, having repurchased CAD 85.2 million in shares during 2025.
Financial Performance and Future Guidance
For the fourth quarter, Chorus reported adjusted earnings available to common shareholders of CAD 0.57 per share, reflecting a remarkable increase of CAD 0.23 or 68% year-over-year. This rise was primarily due to lower net interest expenses. However, adjusted EBITDA fell to CAD 47.1 million, down from CAD 51.0 million in the previous year, attributed to a decrease in aircraft leasing revenue under the capacity purchase agreement (CPA).
Despite this decline, free cash flow for the quarter remained consistent at CAD 27 million. Chorus’s leverage ratio increased to 1.7, up from 1.4 at the end of the previous year, mainly due to excess cash and investments in a SIB during the fourth quarter. The company ended 2025 with CAD 169 million in available liquidity and anticipates maintaining strong liquidity levels, bolstered by expected proceeds of approximately CAD 78 million from the sale of eight Dash 8-400 aircraft.
Osborne outlined a four-year capital allocation strategy aimed at generating between CAD 500 million and CAD 550 million in free cash flow and net proceeds from asset sales. This flexible plan includes a range of CAD 170 million to CAD 220 million for organic growth, acquisitions, additional buybacks, dividends, debt repayment, and working capital investments.
On the operational front, Jazz Aviation delivered stable contracted earnings and progress in its cabin refurbishment program. The company also expanded its routes from Billy Bishop Toronto Airport to four new U.S. destinations, set to commence in late March 2026. The recent five-year collective agreement with the AMFA union representing its maintenance employees further solidified Jazz’s operational stability.
Shifts in business strategies were also evident in Voyageur Aviation, where the focus is moving towards higher-margin defense and specialty maintenance, repair, and overhaul (MRO) services. Although fourth-quarter parts sales were slightly below expectations, Copp noted that anticipated large sales packages are expected to materialize in the first quarter of 2026.
The overall results and strategic initiatives position Chorus Aviation well for continued growth and stability in the aviation sector. As the company navigates the complexities of the industry, its commitment to capital allocation and shareholder returns remains clear, marking a strong outlook for 2026 and beyond.
