Cargojet sees revenues climb on Air Canada tie-up

Cargojet saw revenues continue to climb in the third quarter of the year in line with the launch of new services between South America and the US but it recorded a net loss largely as a result of impairment and finance costs.
The aircraft lessor reported a 7.2% year on year increase in third quarter revenues for the period to C$80.7m, while earnings before interest and tax (ebit) slipped to a loss of C$6.7m from a C$2.8m loss last year and it recorded a net loss of C$4.8m compared with C$2.2m in 2015.

The company said the revenue improvements were down to a C$5.2m increase in aircraft, crew, maintenance and insurance (ACMI) revenues thanks to new daily services from Canada to Latin America via the US.
There was also a $1.2m improvement in its overnight revenues, although this was more than offset by a decrease in fuel surcharges and charter revenues.
The company’s ebit and net loss was caused by a $13.1m increase in its ‘other gains and losses’ category to $18.7m.
This was down to higher finance costs related to aircraft acquisitions and impairment charges related to the Challenger aircraft, foreign exchange losses and settlement of debt.
Meanwhile, its net loss was lower than its ebit loss because of the recovery of income taxes.

The company pointed out that its adjusted earnings before interest, tax, depreciation and amortisation (ebitda) had improved on a year earlier.
Adjusted third quarter ebitda increased to C$25.3m compared with C$11.5m in 2015.
“We are very pleased with the strong financial results achieved in the third quarter.” said Ajay Virmani, president and chief executive.
“We continue to focus on optimizing our overnight network, growing our charter business during the day and on weekends, and to improving our balance sheet.”
It said the improved adjusted ebitda performance was down to the increases in overnight and ACMI revenues, the optimisation of its overnight network, elimination of start-up costs related to the Canada Post contract and gains on the extinguishment of debt.
The company recorded profits in the first and second quarters of 2016.
Late last week Cargojet and Air Canada announced they would be launching another new freighter service to Europe.

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