Cargojet

Cargojet outlines fleet plans

Canadian cargo airline plans international expansion as it adds five Boeing 767 and two Boeing 777 freighters to the fleet

Cargojet outlines fleet plans
A Cargojet Boeing 757 taxis at Vancouver International Airport February 10, 2020 (Brett Ballah).

Cargojet detailed fleet plans Wednesday that include adding seven wide-body Boeings. In doing so, the airline is adding a new emphasis on international cargo which will become a core operating in the long term. The company is responding to a shift toward e-commerce, driven by the global pandemic.

“Fast changing global supply chains and e-commerce trends present a unique opportunity for Cargojet to substantially grow its international business from an opportunistic add-on to a long-term, sustainable growth driver” said Ajay Virmani, Cargojet’s President and Chief Executive Officer in a statement. “Having successfully grown our domestic network with a solid market-share and diversifying into ACMI and Charter Services, building a new growth pillar through international business is a natural next step for us.”

The airline plans to add seven aircraft to its fleet: five Boeing 767 and two Boeing 777. They will join Cargojet’s existing fleet of 27 767s and Boeing 757s.

“Any type of domestic movement across Canada is happening with Cargojet,” said Dina Carlucci, the Director of Business Development at Hamilton International Airport. Hamilton is the country’s largest overnight hub and Cargojet is a big reason for that status. “They basically move a lot of our essential goods and e-commerce purchases.

“That makes Hamilton International Canada’s busiest overnight express cargo hub,” she said in an interview.

A rare bright spot

Cargo represents a rare bright spot in Canada’s aviation industry.

In Hamilton, for instance, passenger traffic dove 66% because of COVID-19. Cargo shipments, meanwhile, were up 24% to 658,000 tonnes in 2020 compared to 2019.

Other airports reported similar increases. Moncton, New Brunswick said cargo shipments were up eight per cent for the year. Winnipeg, which serves as Cargojet’s Western hub, reported a more than four per cent increase in cargo volumes.

Two 767s will be deployed on the domestic network in time for Christmas. They will meet expected growth and serve as stand-by aircraft. After that, another 767 will arrive every three months. Three of the aircraft will be deployed on international routes.

Cargojet also said it would look closely for opportunities in the United States. Cargo hubs in the U.S. are bumping up against capacity limits and Canada could serve as a form of relief valve.

“They work closely with the other carriers,” said Carlucci. “There’s a lot of pressure on, for example, Cincinnati that’s at capacity limits. So they re-route flights and we’ve been the benefactor of getting some of those flights into Hamilton.”

Advertisements

International growth

The first two 777s with their enormous capacity will be deployed to long-haul routes to Asia. Cargojet says the new flights will connect with existing routes to Europe and the Americas. Cargojet has flown all-cargo flights from Hamilton to London since early 2020.

cargojet fleet plans
DHL’s $100 million Gateway Expansion takes shape at Hamilton International Airport (supplied).

At the same time, DHL is nearing completion of its new $100 million sorting facility at Hamilton. The building will be able to handle 15,000 packages an hour, roughly four times DHL’s current capacity. In 2019, DHL estimated that 60% of its Canadian shipments passed through Hamilton. Much of that arrives on flights from Cincinnati to be loaded onto Cargojet planes for shipment to customers across Canada.

“We’re so used to shopping online now and getting our packages so quickly,” said Carlucci. “It’s enabled by this airlift that these cargo airlines oversee at the Hamilton Airport.”

Economic data reflect that shift. In the spring, Statistics Canada reported that Canada’s airlines earned almost as much from cargo as they did from passengers. And as the winter set in, cargo helped bolster aircraft movements in Hamilton.

“Itinerant movements at Hamilton International in Ontario increased year over year (+0.4%) for the first time since the onset of the pandemic, supported by cargo movements,” Statistics Canada reported in late January.

Cargo competition

A Korean Air Boeing 777 freighter arrives at Vancouver International Airport in 2019 (Brett Ballah).

In deploying freighters to Asia, Cargojet will throw itself up against competition from Asian carriers. Korean Air, for example, sells freighter capacity to Vancouver and Toronto.

It is also facing a new threat domestically. Air Canada is converting two older Boeing 767 for freighter use. Air Canada has not said how its aircraft will be deployed.

Cargojet raised $365 million through a share offering to help pay for the additional planes. Carlucci said Cargojet has not told her how the aircraft will be used, though she said Hamilton has the capacity to handle them.

“With this new sort facility, the infrastructure is there to support that growth,” said Carlucci.

In Canada’s user-pay model, airports generate most of their revenues through passengers and the fees they pay. Cargo helps the bottom line, however, through landing fees and lease revenues for cargo buildings on airport land.

While you’re here

Would you consider supporting Western Aviation News?

We’re an independent voice for and about Canadian aviation. We keep the site free to share our passion with the world.

We survive thanks to the support of readers like you.

Categories: Cargojet