Committed to a sustainable future amid a global pandemic

Committed to a sustainable future

amid a global pandemic

Corporate Sustainability

Progress Report

May 18, 2021

TSX: CHR

Corporate

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The worst pandemic in a century devastated the world in 2020, and the airline

industry was hit especially hard. The purpose of this update is to provide our

stakeholders with an overview of the pandemic’s impact on Chorus and the

actions we have taken to mitigate the impact of the COVID-19 pandemic on

our business and position Chorus for recovery.

The COVID-19 pandemic and the resulting government restrictions have

created unprecedented challenges for the passenger aviation industry

worldwide. Even though Chorus’ business model does not directly expose it to

the market risks ordinarily faced by airlines, substantially all its source revenue

is derived from airline customers, through its capacity purchase agreement

(CPA) with Air Canada and its leasing of aircraft to airline customers globally.

The impact on our employees, our customers, and the communities we serve

has been signiﬁcant. Decreased passenger travel demand for aviation services

caused by onerous travel restrictions and health concerns relative to COVID-19

reduced Chorus’ Jazz operations signiﬁcantly, as well as for our aircraft

leasing customers around the world, and challenged our ability to transition

our Voyageur crews to and from international humanitarian air service bases.

Despite extended periods of great stress and uncertainty, Chorus employees

have shown incredible energy, resilience, and commitment in maintaining the

safety and integrity of our operations. I commend them for their determination

to ensure we weather this crisis.

I am conﬁdent that the work we have done in the last few years to solidify and

diversify our business has positioned us well to manage through these challenging

times and for years to come. As vaccines are rolled out and new testing capabilities

continue to emerge, we look at the year ahead with renewed hope and optimism

about the future of the aviation industry. Meanwhile, we remain focused on ensuring

the safety of our people and customers, maintaining appropriate liquidity levels,

strengthening our relationships with customers, and positioning Chorus for the

future.

There have been other deﬁning moments amid this pandemic. The past year has

shone a light on many social injustices. At Chorus, we see a growing need to focus

on inclusion, mental health support, the importance of community, and appreciation

for the values of respect and kindness.

We are committed to building a sustainable and more inclusive future, while

continuing to focus on improving our transparency and accountability in relation

to environmental, social and governance (ESG) issues. As part of our eorts to take

a more eective approach to ESG management, Chorus’ Board of Directors has

recently assigned primary responsibility for the oversight of Chorus’ ESG strategy

and reporting to the Board’s Governance, Safety and Sustainability Committee.

Chorus management has also established a Corporate Sustainability Steering

Committee and a Corporate Sustainability Working Group. Led by Chorus’ Executive

Vice President and Chief Strategy Ocer, the Steering Committee is responsible for

the approval and delivery of Chorus’ corporate sustainability strategy and areas of

focus and provides direction to the Working Group.

The Corporate Sustainability Working Group is comprised of subject-matter experts

from diverse functions within the Chorus group of companies. This Working Group

is tasked with developing and updating the Chorus corporate sustainability plan,

implementing and monitoring the company’s ESG initiatives, and reporting on the

progress of these initiatives to the Steering Committee.

Over the past year, the pandemic and issues of social injustice have ampliﬁed the

need for change. These events reinforce Chorus’ view that a long-term, sustainable

approach centred around the rigorous management of ESG issues is more important

than ever – not only to the success of our company, but also for the betterment of

our communities and preservation of the planet we all share.

Message from our President and CEO

Joseph D. Randell

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Chorus’ priority, ﬁrst and foremost during the COVID-19 pandemic, has

been the safety of our employees and customers. Chorus’ subsidiaries,

Jazz and Voyageur, implemented pandemic business continuity plans to

safeguard critical operations and protect employees and travellers from

the threat of COVID-19.

Jazz implemented Air Canada CleanCare+ on all its Air Canada Express

ﬂights. The program is designed to reduce the risk of exposure to

COVID-19 through measures such as enhanced aircraft grooming,

mandatory preﬂight customer temperature checks and mask wearing, in

addition to required health questionnaires and providing all customers

with care kits for hand sanitizing and hygiene. Our safety protocols also

include the provision of enhanced personal protective equipment for

airport agents and crews, and the reinforcement of safety practices such

as frequent handwashing.

Since the onset of the pandemic, both Jazz and Voyageur have been

managing our pandemic response, developing protocols and procedures

as required, and keeping employees informed with new developments.

We implemented protocols to enhance the safety of our workforce at all

company facilities, including face coverings, social distancing, increased

personal protective equipment measures and enhanced cleaning

procedures. These guidelines are consolidated and updated in COVID-19

employee handbooks, tailored for each operation, for quick and easy

reference. All employees are required to comply with the preventative

measures, policies, and protocols outlined in their handbook.

Keeping our customers and employees safe

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Chorus enhanced ﬂexible work options and provided many employees

with the technology to continue their work from home, where feasible. In

an eort to reduce the risk to employee workplace safety and to protect

the integrity of our operations, employees in certain critical functions

have been split into groups, each working from a dierent location. This

approach has been particularly successful in Jazz’s System Operations

Control Centre (SOCC), the operational brain of the airline. Staed on a

rotating shift basis to provide operational coverage 24/7, SOCC supports

the functions of ﬂight dispatch, commercial operations, crew scheduling,

payload, maintenance operations control, maintenance planning and

materials coordination. Employees have been separated into two groups:

one group at our primary SOCC at the Jazz Operations Centre, and a

second group at the alternate SOCC located at the Chorus headquarters.

The two locations mirror each other, making it a seamless experience for

employees assigned to one workspace exclusively.

Social distancing requirements established in early 2020 had a

tremendous impact on the mandatory annual recurrent training of

Jazz pilots and ﬂight attendants normally delivered in classrooms.

Recognizing the need to continue training crew members in order

to safeguard the essential operations conducted by Jazz, we moved

quickly to develop online training material to conduct these training

classes remotely. This program was successfully launched on April 2,

2020, following Transport Canada’s approval, with over 100 virtual

classes held by the end of last year.

Aviation is a highly regulated industry. Regulatory compliance requires

that both Jazz and Voyageur conduct regular safety audits throughout

their operations. The travel restrictions imposed due to the pandemic

made it unfeasible to conduct onsite observations. In order to continue

meeting regulatory requirements, Jazz and Voyageur adopted remote

auditing processes to maintain the safety oversight of their operations.

Remote auditing is particularly helpful in the safety oversight of

Voyageur’s overseas bases.

Keeping our customers and employees safe (cont’d)

Now more than ever, Chorus relies on technology, including hardware,

software and network infrastructure, to operate its lines of business.

Our robust cybersecurity program and processes have enabled us to

maintain the integrity of our systems while eectively responding to the

signiﬁcant shift to remote work.

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Supporting our employees in time of crisis

We recognize that most employees are navigating a complex,

unexpected situation they have never dealt with before. The

challenges range from working on the front line under unprecedented

circumstances to adjusting to the physical isolation of working from

home, to being placed on temporary layo. Our people continue to

make a dierence, and Chorus is supporting them during this crisis.

The impact of the pandemic underscores the importance of our

employees’ overall well-being – not only their physical health, but also

their mental and ﬁnancial health.

As we adjusted our business to the lower demand levels for air travel

in a pandemic, we were faced with the painful reality of laying o

many employees. In April 2020, Jazz and Voyageur, participated in

the Canada Emergency Wage Subsidy (CEWS) to provide immediate

ﬁnancial relief to adversely aected employees.

While Voyageur employees on temporary layo have subsequently

returned to work, Jazz continues to keep inactive employees on

payroll so they may beneﬁt from the CEWS program. Jazz intends

to participate in government programs aimed to support Canadians

with the pandemic recovery. From the start of the crisis, our goal has

been to properly size our business while minimizing the impact to our

employees. Through the provision of voluntary separation programs,

voluntary unpaid special leaves of absence, job sharing, and other

initiatives, the company has made every eort to mitigate job losses.

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Supporting our employees in time of crisis (cont’d)

Throughout the crisis, we have and continue to focus on the mental

health of our employees and help them cope with the stress and anxiety

caused by these uncertain times. A number of initiatives have been

added to already robust mental health support programs that existed

before the pandemic.

We have increased and enhanced employee communications to ensure

timely updates on the pandemic, company developments and program

changes, while reiterating the importance of compassion, self care and

mental health. Keeping an open line of communication with sta, both

active and inactive, became and remains a priority for the management

team. The use of technology, including video conferencing, provided

opportunities for employees to connect and share.

As a partner of the Not Myself Today program, a workplace mental

health initiative run by the Canadian Mental Health Association, we

increased our promotion of their tools and resources to employees.

Through various communication platforms, we have provided support to

employees whether they are in the workplace, working remotely, or on

inactive status as a result of the pandemic.

Chorus employees also have access to an employee and family

assistance program (or other similar programs), a conﬁdential and

voluntary support service that provides immediate help for any health,

life, work, legal, or ﬁnancial concern. These resources and links to their

webinars, podcasts and communications have been regularly promoted

throughout the COVID-19 pandemic so employees can receive the

support they need.

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Supporting Diversity, Inclusion and Human Rights

The Chorus group of companies is committed to our vision

for diversity and inclusion: To be a global leader of workplace

diversity and inclusion.

An inclusive working environment that respects a diversity

of identities and perspectives is critical to the success of our

Chorus group of companies. We constantly challenge ourselves

to provide a welcoming and safe environment in which we

celebrate our individual dierences and unique perspectives.

In 2020, we continued to focus on inclusion for the beneﬁt

of all employees and to ensure vulnerable populations were

supported and had a voice.

Jazz introduced a new diversity committee, the Black and

Afro-descendant Employee Resource Group to address the

gap recognized as a result of the Black Lives Matter movement.

This employee-led group is working to cultivate awareness,

champion initiatives, enhance belonging in the workplace, and

advance equity for Black employees. Chorus is a signatory

to the BlackNorth Initiative, pledging our commitment to

the removal of anti-Black racism and the systemic barriers

negatively aecting the lives of Black Canadians. We also

initiated voluntary Listening Forums, as part of the BlackNorth

Initiative CEO Pledge, to understand lived experiences of our

employees and to bring forward their ideas.

These initiatives complement other established employee

resource groups that represent speciﬁc identity or

underrepresented groups within the workplace.

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Supporting Diversity, Inclusion and Human Rights (cont’d)

In 2020, Chorus began rolling out an Inclusive Leadership learning

series for all of our senior management. The series engages senior

leaders in conversations about the many aspects of diversity, inclusion

and equality. Through education and dialogue, our leaders are better

equipped to foster inclusive workplaces and support their diverse teams.

This well-received initiative is seen as fundamental to strengthening

equity and inclusion throughout the Chorus companies.

The Chorus Board of Directors believes a truly diverse Board should

include and make good use of a variety of skills, experience, industry

knowledge, perspectives and backgrounds. The Board’s diversity policy

states that candidates for nomination as directors will be evaluated

using objective, merit-based and unbiased criteria, and include the

representation of members from “designated groups” as deﬁned in the

Employment Equity Act (Canada): women, Indigenous peoples, persons

with disabilities, and members of visible minorities. The Board’s diversity

policy has also set the objective of having women represent no less than

30% of the Board’s membership by 2022 – a target we have met since

2018.

In March 2021, Jazz was named one of Canada’s Best Diversity

Employers for the tenth consecutive year. This is a testament to our

strong commitment to our vision for diversity and inclusion.

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Supporting Diversity, Inclusion and Human Rights (cont’d)

Ethics and integrity are guiding principles at Chorus. The organization’s Human Rights Policy, established in 2020, outlines Chorus’ commitment to

the protection and advancement of human rights in our global operations. We conduct our business in a manner that protects human rights within

our sphere of inﬂuence. Everyone at Chorus is responsible to act with integrity in all our business dealings, to comply with all applicable laws and to

act responsibly with employees, customers and suppliers and when interacting with communities.

Chorus has zero tolerance for any form of slavery, human tracking, forced and child labour, and is in compliance with applicable laws prohibiting

such exploitation. Practices are in place for employees to report any suspected incidents of human tracking. All Jazz crew members are trained

on human tracking awareness and how to recognize and report suspicious behaviour.

Voyageur is a signatory to the United Nations Global Compact. In doing so, Voyageur actively promotes the 10 fundamental principles aecting

human rights, labour standards, the environment, and the ﬁght against corruption.

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Protecting our planet

The COVID-19 crisis has emphasized the need for

collective action to address the global challenges that

have profound consequences for our planet, people and

economies.

Chorus recognizes the importance of safeguarding the

environment, and our responsibility and opportunity to

make a positive contribution toward a more sustainable

future. Our core values of listening, collaborating and

improving require us to continually ﬁnd and implement

more environmentally friendly ways to conduct our

business and help our customers conduct theirs.

Chorus’ primary environmental concern is greenhouse

gas (GHG) emissions that contribute to climate

change. Nearly all of the GHG emissions from Chorus’

operations result from fuel burn. Therefore, a decrease

in aircraft fuel consumption is the most ecient

way to reduce our carbon footprint. Both Jazz and

Voyageur have undertaken several fuel conservation

and carbon emission initiatives, ranging from planning

more ecient ﬂight proﬁles, to improving operating

procedures, and implementing weight reduction

programs.

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Protecting our planet (cont’d)

Chorus, through Jazz, has voluntarily participated in Canada’s Action

Plan to Reduce Greenhouse Gas Emissions from Aviation since

its inception and continued to support the plan in 2020. Jazz is a

participating airline in the International Civil Aviation Organization

Carbon Osetting and Reduction Scheme for International Aviation

(CORSIA) to address carbon dioxide emissions from international

aviation. To ensure compliance with CORSIA’s requirements, Jazz

developed an emissions monitoring plan which has received approval

from Transport Canada. The plan includes information about Jazz’s

ﬂeet, operations, fuel use monitoring methods and data management.

As Voyageur’s operations do not reach the prescribed emissions

threshold, it does not participate in CORSIA. However, committed to

doing its part to reduce fuel and energy consumption, Voyageur began

measuring GHG emissions for its aircraft ﬂeet and operations in 2020.

Operating younger, more fuel-ecient aircraft is key to minimizing

our environmental footprint. In 2020, we continued to modernize the

Jazz ﬂeet with the addition of nine fuel-ecient CRJ900 aircraft, and

exiting of the remaining six older Dash 8-100s. At the end of 2020, 70%

of the Jazz ﬂeet was composed of larger gauge, more fuel-ecient

CRJ900 and Dash 8-400 aircraft.

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Protecting our planet (cont’d)

The aircraft portfolio owned and leased by Chorus’ subsidiary,

Chorus Aviation Capital (CAC), is focused on young, fuel-ecient

turboprop and regional jet aircraft, with a current average age

of fewer than ﬁve years. Currently, over 75% of CAC’s portfolio

is comprised of current generation turboprop aircraft, which are

market leaders in fuel eciency, reduced emissions, and reduced

noise pollution. Our regional jet ﬂeet features leading aircraft types

in modern technology, eciency, and operating economics.

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Maintaining ﬁnancial sustainability

History has shown that during economic downturns impacting the aviation sector, the regional market is the most resilient. Domestic travel, operated

with regional aircraft, is often ﬁrst to return. This holds true as we are seeing early signs of regional air travel leading the recovery in global air travel.

Throughout the pandemic, the Chorus business model has shown resiliency. Unlike typical airline companies, we have a predictable revenue stream

with over 90% of our annual revenues secured in long-term contracts supported by strong relationships. The strength of these partnerships greatly

contributed to Chorus being one of very few operators reporting positive returns in the ﬁscal year 2020.

The demand for Voyageur’s humanitarian missions remains strong in the current environment. Despite the challenges associated with quarantines and

travel restrictions, Voyageur has successfully maintained 100 percent of its humanitarian ﬂying missions around the globe throughout the pandemic.

Our CPA with Air Canada provides a great degree of transparency and predictability in terms of our responsibilities, costs and revenues. Under this

agreement, Jazz is a contract carrier that earns a ﬁxed fee for its services, and Air Canada derives all other commercial risks and beneﬁts of the

operation.

Chorus is also dierentiated from pure aircraft leasing competitors due to its ability to provide a full suite of regional aviation services and extensive

operational experience.

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Maintaining ﬁnancial sustainability (cont’d)

Although Chorus entered the COVID-19 pandemic from the strongest position in its history, we were

not immune to the challenges facing the aviation industry. The crisis forced us to quickly pivot our

strategy from oence to defence – from organic growth to one of building liquidity and protecting

the balance sheet. While the pandemic’s impact on the airline industry has been staggering, Chorus

responded with quick and decisive action to preserve liquidity and successfully implemented several

measures as part of its mitigation strategy by:

• Eliminating all discretionary cash outﬂows and reduced capital spend.

• Obtaining a US $100 million unsecured revolving credit facility for general corporate purposes in

the second quarter of 2020.

• Entering into a loan repayment deferral program with its largest lender and eliminating the

requirement to repay the principal amount of certain loans prior to maturity, should the aircraft

not be re-leased by the end of the remarketing period, so long as Chorus continues to comply

with all other loan terms.

• Suspending Chorus dividend payments and the Dividend Reinvestment Plan following the

payment of the March 2020 dividend on April 17, 2020.

• Reducing workforce to match operational demand and oering voluntary employee separation

program packages and voluntary special leaves of absence during the year to reduce overhead

costs in Jazz.

• Utilizing the Canada Emergency Wage Subsidy (CEWS) program at Jazz and Voyageur to

minimize job losses. The grant Jazz received accrued to Air Canada under the terms of the CPA.

• Implementing pay reductions for members of the executive, management and administrative

teams and Board of Directors in 2020.

In 2020, Jazz concluded a four-year collective agreement with Unifor, the union representing Jazz’s

Crew Schedulers. Jazz and Unifor, which also represents Maintenance and Engineering employees at

Jazz, successfully extended the collective agreement by one year. These contracts provide additional

labour stability and ﬂexibility.

The strong relationships we have with our union groups demonstrate our collaborative approach and

shared commitment to a sustainable future.

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Maintaining ﬁnancial sustainability (cont’d)

As we moved into 2021, the new variants of the virus and changing

travel restrictions continued to challenge the aviation industry.

The sustained reduction in air travel demand necessitated further

optimization of the Air Canada Express ﬂeet and regional network

eciency. In March 2021, Chorus and Air Canada concluded an

agreement to revise the CPA between Jazz and Air Canada to address

the ever-changing environment. The revised agreement enhances

Jazz’s position in Air Canada’s network, as the sole Air Canada Express

partner, while providing Air Canada with cost eciency and ﬂexibility.

The parties have a successful history of collaborating to adjust the

terms of the CPA for mutual beneﬁt.

The support and collaboration of our employees throughout this crisis

enabled us to achieve the labour cost reductions necessary to navigate

through the pandemic. The successful completion of the revised CPA

would not have been possible without the support of Jazz’s pilots. All

Jazz union groups collaborated in mitigating job loss by extending

special leaves of absence, and other initiatives to minimize the impact

on the company and employees.

On April 6, 2021, Chorus completed a $145 million capital raise to

bolster its balance sheet and to allow the company to move ahead

with re-starting its growth initiatives. This capital raise included a $30

million private placement from the Alberta Investment Management

Corporation and NordStar Capital. The participation of these

sophisticated institutional investors demonstrates conﬁdence in

Chorus’ future prospects.

As the challenges and uncertainty continue in 2021, Chorus remains

focused on managing liquidity and reviewing additional options to

further strengthen its ﬁnancial footing, in preparation for the eventual

lifting of travel restrictions.

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Navigating the pandemic alongside our customers

Since the onset of the pandemic, Chorus has worked with Air Canada

and our aircraft leasing customers to help them manage the economic

pressures they are facing.

As government-imposed travel restrictions and border closures rapidly

decimated passenger travel demand, we worked closely with Air

Canada on cost reductions, synergies, and the ecient deployment

of the schedule. In 2020, Jazz operated approximately 35% of its

Air Canada Express capacity compared to the prior year, resulting in

half of our pre-COVID workforce, or approximately 2,400 employees,

being placed on inactive status. Being idle was not a viable option.

Together with Air Canada, we proactively responded to the changing

environment to the beneﬁt of all our stakeholders. In 2021, we updated

the CPA to adjust to the new market realities, and to help preserve

regional ﬂying and Jazz’s place within it, while strengthening our

alliance with Air Canada.

Chorus’ aircraft leasing arm, Chorus Aviation Capital (CAC),

implemented temporary rent relief arrangements for substantially all of

its global customers in 2020 as they coped with an unprecedented

reduction in demand for passenger air travel. We are encouraged by

the gradual increases in ﬂying activities in this segment of our business

and the trend in cash collections is positive. Maintaining strong

relationships with our customers is of the utmost importance – it is key

to our long-term sustainability. This is evidenced by CAC’s ability to

restructure lease agreements to support our customers while in some

cases extending the term of our agreements.

Chorus’ Voyageur subsidiary has performed well during the pandemic,

successfully bidding on new ﬂying and MRO contracts and securing

contract extensions. In addition to leasing freighter aircraft to cargo

operators, Voyageur also secured a contract with Purolator Inc. to

provide Dash 8 cargo service to support their operations. This success

is attributable to the continued demand for specialized contract ﬂying

and MRO services in the current environment, and the expertise of the

Voyageur team in delivering the highly unique and customized services

our customers require.

Chorus continues to collaborate with its customers and to proactively

ﬁnd solutions that beneﬁt all stakeholders.

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The importance of regional air services and access

Given the dispersal of communities in a country as vast

and as sparsely populated as Canada, aviation is at the

heart of our country’s transportation strategy. Our smaller

communities rely on regional air service to connect their

residents to the rest of Canada and the world. Regional

airlines play a key role in contributing to the overall

economic growth of the smaller communities to which

they ﬂy.

Since the onset of the COVID-19 pandemic, small

communities have been the hardest hit. The devastation

and interruption in regional aviation have left many

smaller and regional communities without air service.

For these communities, air travel is not a luxury. They

depend on safe and reliable regional air services for their

socio-economic survival, and to support local business,

academia, and tourism.

In an eort to protect connectivity to regional

communities, Chorus has engaged with key government

stakeholders to ensure the sustainability of regional

aviation services is top of mind when making policy

decisions.

On March 18, 2021, the Government of Canada released

details of the Regional Air Transportation Initiative.

The program will provide support to eligible regional

businesses and airports that directly contribute to regional

air transportation. It is designed to help ensure that

regional air connectivity and services, which are critical to

economic growth, are maintained and that regional routes

are reconnected across the country.

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The path to recovery

In addition to the mitigation steps we have taken to protect our company, Chorus is also preparing for the post-COVID recovery. We recognize the

return of passenger trac will be protracted, sporadic, and will extend beyond 2021. However, in times of economic downturn, the regional aviation

sector is the most resilient of the industry with domestic travel being the ﬁrst to resume, as passengers initially elect to stay closer to home.

The recently revised CPA agreement between Jazz and Air Canada optimizes and further diversiﬁes the Jazz ﬂeet and its regional network eciency,

which will allow both parties to operate more competitively as trac returns following the pandemic.

Chorus is well-positioned to continue to serve regional routes and has everything in place to restore service quickly and eciently as passenger

demand grows. We have the infrastructure, worldwide network access, modern and ecient aircraft, a talented workforce, extensive airport presence,

sophisticated safety management systems, and decades of experience.

We are also encouraged by the incremental increases in aircraft utilization and leasing revenue collected by Chorus’ aircraft leasing subsidiary, Chorus

Aviation Capital (CAC). In April 2021, CAC successfully re-leased three of the 13 o-lease aircraft on long-term leases and is actively remarketing the

remaining 10 o-lease aircraft, which were repossessed by CAC in 2020.

When the time comes, Chorus will be ready to welcome back our impacted employees as we ramp up activity in response to the emerging demand.

Caution regarding forward-looking information

This report contains ‘forward-looking information’. Forward-looking information is identiﬁed by the use of terms and phrases such

as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “potential”, “project”, “will”, “would”,

and similar terms and phrases, including references to assumptions.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results,

performance or achievements to dier materially from those indicated in the forward-looking information. Actual results may

dier materially from results indicated in forward-looking information for a number of reasons, including the risk factors identiﬁed

in Chorus’ Annual Information Form dated February 18, 2021 and in Chorus’ public disclosure record available at

www.sedar.com.

Statements containing forward-looking information in this report represent Chorus’ expectations as of the date of this report (or

as of the date they are otherwise stated to be made) and are subject to change after such date. Chorus disclaims any intention

or obligation to update or revise such statements to reﬂect new information, subsequent events or otherwise, unless required by

applicable securities laws.

Chorus Aviation Inc.

3 Spectacle Lake Drive, Suite 100

Dartmouth, NS B3B 1W8

Canada

chorusaviation.com

TSX: CHR