Chorus Aviation Capital Presentation October 26, 2017
Caution Regarding Forward-Looking Information Certain information in this presentation may contain forward-looking information as defined under applicable Canadian securities legislation. Forward-looking information typically contains words such as anticipate, believe, could, should, estimate, expect, intend, may, plan, predict, project, will, would, and similar words and phrases, including references to assumptions. Such information may involve but is not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking information relates to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and other uncertain events. Forward-looking information, by its nature, is based on assumptions, including those described in this presentation, and is subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, amongst other things, external events, changing market conditions and general uncertainties of the business. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to differ materially from those expressed in forward-looking statements. Factors that may cause results to differ materially from expectations in this presentation include, without limitation: risks relating to Chorus economic dependence on and relationship with Air Canada; risks relating to the airline industry (including the international operation of aircraft in developing countries and areas of unrest); aircraft leasing (including the financial condition of lessees, availability of aircraft, access to capital, fluctuations in aircraft market values, competition and political risks); energy prices, general industry, market, credit, and economic conditions (including a severe and prolonged economic downturn which could result in reduced payments under the Capacity Purchase Agreement ( CPA ) with Air Canada); competition affecting Chorus and/or Air Canada; insurance issues and costs; supply issues and costs; the risk of war, terrorist attacks, aircraft incidents and accidents; epidemic diseases, environmental factors or acts of God; changes in demand due to the seasonal nature of Chorus business or general economic conditions; the ability of Chorus to reduce operating costs and employee counts; the ability of Chorus to secure financing; the ability of Chorus to attract and retain the talent required for its existing operations and future growth; the ability of Chorus to remain in good standing under and to renew and/or replace the CPA and other important contracts; employee relations, labour negotiations or disputes; pension issues, currency exchange and interest rates; leverage and restrictive covenants contained in debt facilities; uncertainty of dividend payments; managing growth; changes in laws, adverse regulatory developments or proceedings in countries in which Chorus and its subsidiaries operate or will operate; pending and future litigation and actions by third parties. For a further discussion of risks, please refer to Chorus most recent MD&A and to the Annual Information Form dated February 15, 2017. The statements containing forward-looking information in this presentation represent Chorus expectations as of October 12, 2017, and are subject to change after such date. However, Chorus disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws. Page 2
Chorus at a Glance TSX: CHR Ticker symbol ~ $1.1 billion Market capitalization (1) +104% Three year share price performance (2) ~ $1.3 billion Operating revenue - 2016 ~ $248 million Adjusted EBITDA, excluding other items - 2016 Consistently profitable since becoming publicly traded in 2006 Focused on building additional shareholder value Monthly dividend of $0.04 per share (1) Calculated using closing price of Chorus shares of $8.59 on the TSX on October 4, 2017. (2) Between October 4, 2014 and October 4, 2017. Page 3
Chorus Lines of Business Focused on providing a full suite of regional airline services 1 Contracted flying 2 Maintenance, repair 3 operations and overhaul (MRO) Regional aircraft leasing Operated by Focus area of growth and revenue diversification Page 4
1 Overview of Contracted Flying Operations Air Canada Express Operated by Jazz Jazz is responsible for providing crews, airframe maintenance, flight operations, some airport operations, and general administration Scope operation ~700 daily flights 73 destinations in North America Fleet of 117 aircraft Voyageur provides specialized contracted flying and aviation services Contract flying services Missions Flight operations Voyageur Fleet of 18 owned aircraft (16 Bombardier manufactured) Three types of missions Smaller markets with less demand High density markets at off-peak times Point-to-point services on lower density routes Jazz is Air Canada s primary regional supplier, providing ~70% of their regional capacity Flying ACMI missions around the world for over 12 years Blue-chip customers such as the United Nations Contracted services done with Canadian licenses, certifications, and designations World-renowned reputation for superior safety standards and operational integrity. Page 5
2 Overview of MRO Operations Separate division under Jazz Stand alone profit centre Focused on traditional heavy maintenance on Bombardier aircraft Operating in North Bay, ON 200,000 square foot facility Highly specialized and custom MRO and engineering, design for domestic & international clients Established in 2016 Regional aircraft part sales and service Page 6
3 Overview of Chorus Aviation Capital Established in January 2017. Fairfax Financial invested $200 million in Chorus through a private placement of convertible debt. New subsidiary Chorus Aviation Capital ( CAC ) setup to build a global, regional aircraft leasing platform - further advancing Chorus growth and diversification strategy. Delivers a full suite of support services to customers worldwide by leveraging the expertise within Chorus group of companies. Page 7
Strategic Vision Opportunity Execution Chorus believes there is a significant opportunity to develop a large and profitable leasing platform. Chorus established, Chorus Aviation Capital (CAC) for the purpose of acquiring, financing, leasing and trading regional aircraft. Global passenger growth continues to accelerate. Focused exclusively on the 70 to 135 seat commercial market segment. Regional aircraft leasing segment is stable and currently underserved with limited competition Segment enjoys premium yields and sector margins with favorable access to capital. Objective is to become a leading global regional aircraft lessor. Create significant synergies with Chorus' other businesses. Page 8
Accelerating Global Passenger Growth Air Travel Expected to Double in the Next 15 Years Airlines are More Dependent on Operating Leases World annual RPK (trillions) 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 ICAO total traffic Airbus GMF 2015 0.0 1975 1985 1995 2005 2015 2025 2035 2x...and will double again in the next 15 years No. of Commercial Aircraft 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 40% 45% 40% 34% 30% 9,600+ 35% 30% 22% 6,800+ 25% 17% 5,200+ 20% 3,300+ 15% 2,200+ 10% 5% 0% 1995 2000 2005 2010 Mar-16 % on Operating Lease Operating Lease Operating Lease Market Share (%) Over the last 20 years, passenger demand has increased at an average of 5% per annum Outpacing GDP growth by 2.7x Increasing size of the global fleet Growing market share of aircraft on operating lease Significant increase in aggregate number of aircraft on lease Airline passenger growth will remain robust. Sources: Airbus Global Market Forecast (2016), Boeing Current Market Outlook (2016), ICAO Historical Traffic Figures, Ascend, ICAO (1983 2013) and IATA December 2015 (2014-15) Page 9
Aircraft Leasing Continues To Build Momentum 1970 3,772 a/c 17 leased 0.4% 1980 6,037 a/c 100 leased 1.7% 1990 9,160 a/c 1,343 leased 24.7% 2000 15,032 a/c 3,713 leased 24.7% 2011 21,741 a/c 7,943 leased 36.5% 2020 Forecast Over 50% leased Over half of the world s fleet expected to be leased by 2020. Sources: Boeing Current Aircraft Market Outlook 2016 Page 10
Aircraft Leasing is a Financially Attractive Segment Profit Before Tax Margins Return on Average Equity 1 AviaAM 41.8% SinoAero 33.9% CALC 38.4% NAC 21.0% BOC Aviation 36.8% AerCap 14.0% Air Lease Corp 32.1% CALC 12.7% NAC 29.7% BOC Aviation 11.9% Alafco 26.2% AviaAM 11.1% AerCap 25.8% Avation 10.5% SinoAero 24.8% Air Lease Corp 8.4% Avation 22.8% Alafco 7.3% ACG 16.7% Aircastle 6.8% Aircastle 15.2% ACG 6.1% Source: Air Finance Journal Leasing Top 50, company reports, The Airline Analyst Notes: 1 Shareholder loans as equity Page 11
Five Verticals of Aviation Leasing Commercial Corporate Regional Helicopters Engines Transactions / Year: Transactions / Year: Transactions / Year: Transactions / Year: Transactions / Year: 1,500 aircraft US $100bn 650 aircraft US $18bn 300 aircraft US $10bn 500 aircraft US $6bn 200 engines US $2bn Percent Leases: Percent Leases: Percent Leases: Percent Leases: Percent Leases: 40% 15% 20% 15% 30% Large Lessors: Large Lessors: Large Lessors: Large Lessors: Large Lessors: 35+ 1 4 6 10+ Comments: Comments: Comments: Comments: Comments: NB Narrow body WB Wide body Passenger Cargo General Aviation Civil Air Transportation TP Turboprops RJ Regional Jets 100 seats or less Industrial Air Transport Emergency Response Turbine Engines Spares and maintenance rotation *Large Lessors defined as corporations with assets greater than US $1bn Page 12
Uncrowded Regional Aircraft Leasing Market Large Competitors Commercial Corporate Regional Helicopters Engines / Page 13
Chorus Has Already Become a Significant Leader in Regional Aircraft Leasing Portfolio Value (Estimated) Source: Chorus Estimates (US$m) 6,000 5,400 5,000 4,000 3,000 2,700 2,000 1,000 1,100 1,050 800 700 700 500 400 400 0 NAC GECAS Chorus Avolon DAE ELIX FALKO CDB Leasing Avation GOAL Page 14
Regional Aircraft are Fundamental to Efficient Air Transport Worldwide Flight Distribution By Aircraft Type Worldwide Distribution of Aircraft by Type Flights 2012 (million) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 83% of TP flights are under 500 km 63% of J61-120 flights are over 500 km Turboprop (TP) Regional Jet (RJ) 61-120 Narrow Body (NB) 83% of NB flights are over 500 km 14,800 4,300 5,900 RJ TP Narrow Body (NB) Wide Body (WB) Regional Aircraft (RJ/TP) Distance Category (km) 30% of passenger fly less than 550 km (300 mi.) Regional aircraft fleet is ~24% of total commercial fleet 60% of the world's communities linked with regional aircraft Regional aircraft have specific applications for short take-off and landing and extreme conditions Source: OAG 2012, Boeing / Bombardier Page 15
Extensive Network of Regional Airlines Worldwide A diverse set of potential customers on every continent Continent CRJ Q400 ATR ejets North America 33 6 6 12 South America 8-8 10 Europe 28 10 41 24 Africa 18 3 23 5 Asia 15 4 24 23 Australia - 1 5 3 Total Operators 102 24 107 77 We continue to see significant demand for regional aircraft leases Source: Company websites, Airfleets (July 2017) Page 16
Regional Transport Dominated by Three Manufacturers Product Lines (in production) Q400 CRJ 700/900/1000 E170/E175/E190/E195 ATR42/72 Product Lines (classics) Dash 8-100/200/300 CRJ - 100/200 ERJ135/ERJ140/ERJ145 Variants of 42/72 Turboprop Market Share 1 Regional Jet Market Share 1 Bombardier Dash 8 Family 44% / 1,200 overall 56% / 1,500 overall ATR Family Bombardier CRJ Family 42% / 1,900 overall 58% / 2,600 overall Embraer ERJ / Ejets Family 2,700 Aircraft 4,500 Aircraft Page 17
Deliveries Have Been Historically Stable Regional Aircraft Historical and Projected Deliveries 400 350 322 300 2010 2015 Average Deliveries: 257 285 286 298 291 288 250 256 249 232 234 108 101 99 99 95 95 200 107 99 100 103 150 100 50 149 150 132 131 177 185 199 192 193 227 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Regional Jets Turboprops 1 2 Source: Airline Monitor, Wall Street Research Notes: 1 Includes CRJ700/705, CRJ900, CRJ1000, CS100, EMB135/140/145, EMB170/175, EMB190/195, SSJ100, MRJ, A318, 737-600, ARJ21 2 Includes ATR42, ATR72, Q400 Page 18
Regional Aircraft Future Values Similar to Narrow-Body Projected half-life base values over time assuming 1.5% annual inflation 100% 90% 80% 70% 60% Aircraft % of Original Value Airbus A321 34.98% Airbus A320 34.21% Boeing 737-800 33.67% ATR 72-600 40.54% DHC 8-400 37.57% ERJ 175 38.78% ERJ190 38.15% Canadaair RJ 900-900ER / 900LT 31.41% Average Mainline 34.28% Average Turboprops 39.05% Average Regional Jets 36.11% 50% 40% 30% 20% 10% DHC 8-400 ATR 72 600 Canadaair RJ 900-900ER/900LR ERJ 175 ERJ 190 Boeing 737-800 Airbus A320 Airbus A321 0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Page 19
Regional Aircraft: An Ideal Leased Asset 1 Resilient Demand Expectations with a Broad User Base The 70-130+ seat fleet is expected to grow 4-5% per year over the next 20 years Operational efficiencies from regional aircraft play a key role in hub-and-spoke networks 2 Attractive Aircraft Type for Shorter Routes Regional aircraft allow airlines to optimize aircraft size and reduce per-seat cost ~50% of global passengers fly on trips below 500 miles and ~30% of global passengers fly on trips below 300 miles 3 Geographically Diverse Demand Dynamics Economic growth in emerging markets is expected to significantly outpace those in advanced economies The emergent urban middle classes in these areas present a real opportunity to expand air travel capabilities which will require the use of turboprop and regional jet aircraft 4 Stable Supply Historical deliveries of regional aircraft have been relatively consistent Regional aircraft projected deliveries are stable 5 Ability to Hold Values Over Time Values of regional jets and turboprops have proved less volatile relative to most narrow body aircraft Page 20
Progress to Date Scale Announced transactions for 19 regional aircraft. Five aircraft types from three manufacturers with average age of 2.7 years. Diversity Clients now include seven major regional airlines in seven countries on five continents. New clients include Azul, Aeromexico, Air Nostrum, Falcon Aviation, Flybe, KLM & Virgin Australia. Visibility Locked-in leasing stream with an average term of greater than 7 years. Lease revenue producing expected yield. Liquidity Committed financing for all 19 new regional aircraft. Average LTV of portfolio of 75% (Debt: Equity 3:1). Experience Expanded management team with five new appointments with 23 years average commercial aircraft experience. Opened and staffed our Irish office. Returns Acquisitions will nicely contribute to Chorus Aviation returns in subsequent quarters. Financial forecast metrics all meeting or exceeding our targets. Page 21
Assembled a Highly Experienced Management Team Steven Ridolfi President James Bruce Peddle Chief Operating Officer Cameron Mountenay Chief Financial Officer SVP, Strategic Investments, Mergers & Acquisitions, Chorus Aviation SVP, Strategy, Mergers and Acquisitions, Bombardier President, Business Aircraft, Bombardier President, Regional Aircraft Bombardier VP, Aircraft Leasing and Trading, Chorus Aviation VP, Marketing & Sales, Bombardier Flexjet VP, Commercial, Embraer North America Managing Director, Embraer Asia Pacific VP, Structured Finance, Bombardier VP, Finance and Contracts, Bombardier VP, Asset Management & Business Development, Bombardier Rory McQueen Vice President, Finance & Capital Markets Una Slevin Vice President, Contracts VP, Capital Markets, Lease Corporation International (LCI) Head of Treasury, Vistajet Director, Structured Finance, Bombardier Director, Aircraft Finance, Bank of Scotland Head of Finance and Operations, CIT Aerospace Treasury Manager, CIT Group Finance Financial Controller, CIT Group Finance Jim Murphy Vice President, Transactions & Control Director, Corporate Development & Aircraft Programs, Chorus Aviation VP, Commercial Operations, Provincial Airlines Director, Marketing & Fleet Planning, Canadian Airlines Anil Mohan Vice President Legal Associate General Counsel, Chorus Aviation General Counsel, Halifax International Airport Legal Counsel, IMP Group Page 22
Progress to Date Air Nostrum 4x CRJ1000s Flybe 3x ATR72-600s Virgin Australia 3x ATR72-600s Falcon 3x Q400s Azul 2x E195s KLM 1x E190s Aeromexico 1x E190s Aeromexico 2x E190s Contracted for 19 aircraft with an average age of 2.7 years. Page 23
Progress to Date Chorus Aviation Capital Aircraft Portfolio By Lessee Aircraft Lessee Country Geographic Region Aircraft Model Number Of Units Azul Brazil South America Embraer 195 2 Aeromexico Mexico North America Embraer 190 3 Air Nostrum Spain Europe CRJ1000 4 Falcon Aviation United Arab Emirates Middle East Q400 3 Flybe United Kingdom Europe ATR 72-600 3 KLM Cityhopper Netherlands Europe Embraer 190 1 Virgin Australia Australia Asia and Pacific ATR 72-600 3 7 Lessees 7 Countries 5 Continents 5 Models 19 Seven major regional airlines in seven countries on five continents. Page 24
Regional Aircraft Sourcing Channels Portfolio Acquisition Purchase of existing assets and leases from existing lessors. Airline Sale Leaseback Sale and leaseback of existing or future aircraft deliveries. Skyline Leases Direct purchase from OEM for subsequent lease to airlines. There are a significant number of profitable lease transactions available to CAC. Page 25
Chorus Aviation Capital Growth Opportunity We believe there is a significant opportunity to develop a large and profitable leasing platform by exploiting this currently underserved segment and prevailing market dynamics. We have been able to consummate a significant number of successful profitable transactions over a short period of time. We have transitioned to a significant business with strong, attractive assets and contracted leases and margins, and we believe we can replicate and accelerate this growth. Page 26