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Oct 23, 2020

Chorus Aviation shares surge 34% amid takeover interest

Airlines and airports 'the backbone of our economic development': Calgary Economic Development CEO

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Shares of Chorus Aviation Inc. surged Friday afternoon on the Toronto Stock Exchange after the aviation holding company disclosed that it had attracted takeover interest.

In a brief statement, Halifax-based Chorus said it received a “preliminary, non-binding acquisition proposal from a third party that is subject to a number of significant conditions.” However, it cautioned there’s no guarantee the advance from the unidentified suitor would result in a transaction.

The company’s shares closed near their intraday high, gaining 34.2 per cent to $3.18.

Chorus, which provides regional airline service under the Jazz Aviation and Voyageur Aviation banners, has been hobbled by the pandemic and its impact on air passenger traffic like many of its industry peers.

At the end of June, Air Canada – which has a significant capacity purchase agreement with Chorus – scrapped 21 regional routes that were operated by Jazz.

Alongside the company’s second-quarter results released on Aug. 12, chief executive officer Joe Randell said Chorus had slashed approximately 65 per cent of its workforce since the start of the pandemic. The company also reported a 45-per-cent year-over-year collapse in revenue in the second quarter.

He pleaded with the government to ease travel restrictions.

“The Canadian and provincial governments need to look to other G20 countries that have implemented safe, thoughtful, practical and science-based approaches to strategically easing travel restrictions in order to enable business and economies to restart and succeed within this new normal,” Randell said at the time.