Cargojet saw revenues and profits increase in the first quarter of the year as it continued to benefit from a boom in e-commerce demand.
The Canada-based aircraft owner and operator saw first-quarter revenues increase by 30.3% year on year to C$160.3m, earnings before interest and tax were up from a C$0.9m loss last year to a C$91.1m profit this year and net earnings for the period increased from a loss of C$1.8m last year to a profit of C$89.4m.
The increase in revenues was largely down to improvements in its domestic network and ACMI business, the company said.
“The increase [in domestic network revenues] was primarily due to an increase in e-commerce volumes during the period, but partially offset by a decrease in B2B volumes, both as a result of the Covid-19 pandemic,” it said.
“The e-commerce volumes continued to be significantly higher than previous years while the B2B volumes have largely recovered since the onset of the pandemic. The increase in shipping volumes during the period resulted in a 15.5% increase in the average domestic network revenue per operating day.”
The ACMI increase came primarily as a result of two new scheduled routes to Europe that started in April 2020 to replace passenger belly cargo capacity that disappeared as a result of passenger airlines cutting back capacity and flying. Another route to the US and Mexico was added at the end of September 2020.
“With a fundamental shift in consumer shopping habits in several key categories, Cargojet has spent the last few quarters laying the foundation to capture the next phase of e-Commerce growth. We strengthened our balance sheet, invested in fleet expansion, broadened our portfolio of services and are investing in attracting and retaining top talent.” said Ajay Virmani, president and chief executive.
“What was previously a consumer led shift to digital is now rapidly becoming a merchant led shift, accelerating the move to e-commerce even further. Our highly focused and professional team continues to work closely with our customers to support their changing needs while maintaining the best on-time performance in the industry.
“With shifting supply chains, triggered by a significant reset of the international passenger routes, we also see opportunities to expand and diversify on select international lanes. We also continue to focus on growing our ACMI and Charter business as cargo capacity remains in high demand and we are constantly adapting to maintain our leadership position.”
Over the past few months, the company has announced expansion plans.
In February, Cargojet confirmed plans to enter the B777 freighter market and add extra B767F aircraft to meet international growth opportunities.
That month the lessor and operator also raised C$365m through an equity deal. The money will be used to pay off debt and acquire the new aircraft.
The company said that two Boeing 777 freighters will arrive in 2023, with the option to add two more in 2024.
The first two of these freighters will be deployed for long-haul Asian routes and emerging South Asian markets “strategically integrated with Cargojet’s domestic network and in addition, they will serve and connect seamlessly with select European and South-Central and North American cities”.
Meanwhile, the first of five Boeing 767 freighters, announced earlier, will begin arriving in 2021 with the first freighter arriving in the third quarter of this year with one additional freighter arriving every quarter thereafter.