Photo: Cargojet
Canada-based Cargojet reported revenue and profit increases in the first quarter of the year and is optimistic for the coming months as a result of the implementation of tariffs.
The freighter operator reported an 8.1% year-on-year increase in first quarter revenues to a record C$249.9m, earnings before interest and tax (ebit) improved by 32.7% to C$49.9m and net profits were up 47.7% to C$48m.
The airline reported revenue increases across its domestic network and charter business while ACMI takings were down.
The improvement in its domestic network was due to an increase in e-commerce and B2B volumes during the period, and contractual customers’ consumer price index increases.
Its charter business improved primarily because of scheduled charter services starting between China and Canada in the second quarter of 2024, as well as an increase in ad hoc charters.
The company said that trade barriers as a result of the imposition of tariffs by the US and Canada started to have an impact on the market in the second quarter, but the company was hopeful the levies may actually present an opportunity.
“[The second quarter] saw trade barriers materialise, triggering volatility across global markets, elevated bond yields, and fluctuations in oil prices amid weaker economic outlooks.
“Despite these challenges, Cargojet remains cautiously optimistic in its ability to maintain revenue and volumes with minimal disruption.
"While the future trade-flow lanes remain highly uncertain, importers in our domestic market will need to bring the product directly into Canada rather than routing through previous optimal points within North America, potentially providing a tailwind to growth.”
Cargojet co-chief executive Jamie Porteous said: "With the backdrop of trade wars and expected de-coupling of North American supply chains, more cargo is expected to enter Canada directly from the rest of the world to mitigate the uncertainty of tariffs.
"These results demonstrate the unique and complementary structure of our various revenue segments. We continue to identify new opportunities and remain at the forefront of helping customers adjust to new global supply chains.”
Cargojet operates a fleet of 41 Boeing aircraft – 24 767s and 17 757s – for customers such as Amazon, DHL Express, FedEx and other logistics providers.
Canada and Mexico face US tariffs of 25% for goods outside the North American free trade agreement, while the US also has a 25% tariff on automobiles. A tariff of the same rate on automobile parts is due to come into force in May. Canada has responded with tariffs of its own.
