Cargojet looks to add its first B777 freighters

Canadian carrier and lessor Cargojet has raised C$350m to increase its fleet with more B767 freighters and to buy its first B777Fs.

The airline said a portion of the funds, raised through a share sale, would be used to fund the purchase of five B767Fs  for delivery in 2021/2022 and two long-range B777Fs for international routes for delivery in 2023.

Some of the funds will be used to invest in a new hanger and additional land-based facility infrastructure in Canada to support additional e-commerce volumes, driven by the ongoing pandemic, that are expected to establish a new higher baseline going forward.

The money will also help fund strategic investments in the US and discharge finance leases, including associated balloon payments, on six aircraft maturing in fiscal 2021 and fully pay down outstanding revolver balances.

Cargojet has also granted the underwriters the option to purchase additional shares that could raise another C$52.5m.

“The Covid-19 pandemic has significantly increased demand for Cargojet’s international air cargo services,” Cargojet said. “Air cargo capacity has been severely constrained due to the reduction of passenger aircraft operating on international routes and it is uncertain when such capacity will return to pre-pandemic levels.

“Furthermore, US and international air cargo growth opportunities have emerged as a result of rapidly evolving global supply chains and a lack of air cargo capacity in key markets.”

It added that it had experienced record volumes in the peak season.

In the third quarter of last year, the carrier’s freighter fleet stood at 13 B767-300s, three B767-200s and eight B757-200s.