Charter demand boosts Cargojet’s performance in Q3
06 / 11 / 2024
Demand for charter operations helped boost revenues for Canada-based freighter operator Cargojet in the third quarter of the year.
The company reported a 14.8% increase in overall revenues to C$245.6m for the third quarter, with ACMI revenues up 12% to C$70.2m, domestic network up 5.2% to C$97.3m and all-in charter revenues improving by 60.2% to C$41.5m.
Earnings before income taxes were up 262% to C$36.2m and net earnings improved by 182.9% to $29.7m.
The increase in domestic network revenues was due primarily to an increase in e-commerce and B2B volumes during the period, and contractual customers’ consumer price index increases.
For ACMI, the increase was down to additional aircraft deployed on a short-term basis, as well as an increase in ad hoc ACMI flights.
Charter revenues were boosted by scheduled charter services between China and Canada which started during the current year, as well as an increase in ad hoc charters. Higher fuel charges also boosted the company’s revenues during the period.
The company said that it had this year benefitted from geo-political challenges.
“The improving interest rate environment and controlled inflation are fostering a more stable and optimistic economic outlook for Canada which we believe bodes well for future domestic volumes,” said Jamie Porteous, co-chief executive.
“While geo-political challenges continue to affect the overall transportation industry, we continue to find opportunities that are creating new sustainable revenue streams in fast changing global commerce. Yet, Cargojet is not immune to the headwinds of significant cost increases facing the aviation and the supply chain sectors.”
Pauline Dhillon, co-chief executive, added: “We grew block hours by nearly 15% with no change in fleet size. We are sharply focused on optimizing every aspect of our business to improve margins and deliver shareholder value. Our relentless focus on delivering best in class on-time performance continues to win new customers.”
In a recent interview with Air Cargo News, Porteous said the company began to push its charter operation in 2023 as it had spare capacity due to a slowing cargo market.
“We never had the capacity to fly charters,” says Porteous. The shift came at the right time to catch a surge in demand in this segment, which has continued and appears set to carry into 2025.
“Charter has been very strong, even through the summer,” says Porteous, adding that demand for this has come from across the spectrum of industries.
The latest addition to the portfolio has been scheduled charters across the Pacific, courtesy of Great Vision HK Express, which serves Chinese e-commerce platforms. It has booked three weekly flights from Hangzhou to Vancouver. Some of that traffic continues on Cargojet’s domestic network to other Canadian destinations.
This three-year contract is adding an estimated C$116.2m to the airline’s revenues. During the peak season, the frequency is going up to six flights a week.
