Financially troubled Chrono Aviation given time to restructure

Chrono Group, an aviation firm that includes Chrono Aviation, has been put under administration by the Quebec Superior Court after a report showed the company cannot meet its obligations to its creditors amid legal woes with competitors.

Chrono Aviation — which recently opened a new route between Montreal and Iqaluit — hired Deloitte Restructuring Inc. to submit the report to the court. The report is posted to Deloitte’s website.

The court then appointed Deloitte to be Chrono’s administrator on Oct. 18.

That move is being done in accordance with the federal Companies’ Creditors Arrangement Act, which allows financially troubled businesses a chance to restructure and avoid filing for bankruptcy.

One of Chrono Aviation’s bigger clients is Baffinland Iron Mines Corp. The company provides charter flights for workers travelling back and forth between the mine, which is located on northern Baffin Island.

“We are fully aware of the situation with Chrono and have been assured that there will be no changes to Baffinland employee and contractor flight schedules,” said Peter Akman, a spokesperson for Baffinland, in an email to Nunatsiaq News.

Chrono Group employs 330 employees and has 14 aircraft under its name, according to the Deloitte report. Chrono Group includes Chrono Aviation, Chrono Jet, Lux Air Services and Avionique WAAS Inc., according to the Deloitte report.

Deloitte’s first report, issued Oct. 17 in French, revealed that as of June 2024 Chrono Group listed $74.2 million in liabilities. The provincial creditors arrangement act lists a threshold of $5 million in debt in order for company to qualify for the chance to restructure.

The report said Chrono Group is “in default on commitments made to several of their secured creditors,” naming the National Bank of Canada as its largest creditor.

The report points out three causes for the company’s financial difficulties: lingering effects from the COVID-19 pandemic; rising costs for aircraft maintenance; and the negative impact of a legal claim made against it by competitor Nolinor Aviation.

Nolinor, a Quebec-based firm, filed a $21.5-million claim against Chrono Group in 2020 citing a “scheme of unfair competition and misappropriation of intellectual property” regarding Chrono’s acquisition of a contract with Baffinland.

Chrono Group contests the claim in full.

The trial will not begin until 2025, the report indicates. Even so, it said, the potential of a possible future payout is of serious concern for financial partners, current and future.

A second report by Deloitte, on Oct. 22, indicated Starlink Aviation, another Quebec-based company, showed interest in becoming a business partner with Chrono Group and wishes to acquire one of the hangars Chrono owns in Montreal.

A partnership of that kind would also require financial restructuring and corporate reorganizing at Chrono.

Deloitte is scheduled to submit a proposal to the court on Dec. 13.

A spokesperson for Chrono Aviation declined comment for this story. Deloitte did not respond to a request for comment.