Cargojet continues to cut costs as third quarter revenue drops
08 / 11 / 2023
Cargojet's Ajay Virmani. Image Source: Cargojet
Canada-headquartered freighter operator Cargojet is continuing to cut costs as it reported a drop in third quarter year-on-year revenue.
Total revenue for the third quarter of this year (ended September 30) was C$214m, compared to third-quarter 2022 revenue of C$232.7m.
Net earnings for the quarter were C$10.5m (with a net loss of C$6.8 million excluding warrant valuation gain) compared to net earnings of C$83.4m achieved in the third quarter of 2022 (with a net loss then of C$1.9m excluding warrant valuation gain).
Ajay Virmani, president and chief executive, observed: “Higher interest rates are starting to impact household disposable incomes and we are observing a division in household spending.
“The volumes for discretionary items are softening but the volumes for essential household goods are holding up well. A positive revenue growth in this environment demonstrates the resilience of our diversified business model.”
He continued: “We are prudently trimming capital expenditures and the entire Cargojet team is diligently working on identifying every cost saving opportunity.
“As we further sharpen our operating model, we are squarely focused on strengthening our relationships with strategic customers by meeting their changing needs and delivering the industry best on-time performance.”
Plus, Virmani pointed to Cargojet’s on-time performance in the third quarter being an impressive 99.5%.
Earlier this year, Cargojet also reported year on year declines in its second-quarter financial results. The company’s second-quarter revenues declined by 15% year on year to C$209.7m in the second quarter, attributed primarily to decreases in domestic network revenues, all-in charter revenues, fuel surcharges and other pass-through revenues.
ACMI revenues, however, increased by C$2.7m.
The revenue fall in its domestic and all-charter was down to a decrease in e-commerce and business-to-business (B2B) volumes during the period, partially offset by contractual customers’ consumer price index increases.
Cargojet provides time-sensitive premium air cargo services to major cities across North America, offering its own dedicated, ACMI (aircraft, crew, maintenance and insurance) and international charter services. It operates its network with its own fleet of 39 cargo aircraft.