News / Ecommerce keeps Cargojet in the black as it eyes further expansion

Photo: Cargojet

Its core linehaul business for parcel carriers has kept Canada’s largest freighter airline in profit in the third quarter, despite headwinds buffeting its ACMI and charter segments.

Notwithstanding setbacks in its scheduled international flying, Cargojet is expanding again with a new transatlantic freighter operation.

Revenue in the airline’s core domestic network grew 6.3% in the quarter, offsetting decreases in ACMI and charter income, to produce total revenue of C$219.9m (US$155.89m), down 10.5% from a year earlier. Net earnings fell 70.4%, to C$8.8m.

“The results are a good indication of the resilience of our business, where one segment can offset another,” said co-CEO Jamie Porteous.

“Our domestic business was pretty strong. We were forecasting domestic to grow mid to high single digits,” he added.

In the main, the domestic network performs linehaul for several large customers, including UPS and Canada Post offshoot Purolator Courier, Canada’s largest parcel carrier. Cargojet also runs dedicated flights for Amazon and DHL.

“Ecommerce is the biggest driver of our business,” Mr Porteous said. He expects this to continue, pointing to a comparatively low penetration rate of the segment in Canada compared to other developed economies.

Cargojet has seen setbacks in the ecommerce arena this year too. The end of the US de minimis exemption has not affected its cross-border flights, but its transatlantic ACMI flying for DHL has been hurt by the shrinkage of volume from India and East Asia that used to be funneled over Europe, Mr Porteous remarked.

Scheduled charter business from China has also diminished to three weekly flights, down from five or six a week in 2024.

On the bright side, the airline has seen double-digit growth in its ad hoc charter activities. These include programmes that run for two or three weeks, Mr Porteous said.

“We’ve done a lot in South America for music groups,” he added.

Cargojet beefed up its charter capabilities in the spring with the implementation of the Aerios Carrier App, a platform designed to streamline processes, enhance efficiency and accelerate response times for charter quotations. The airline, which had participated in its alpha programme, was the launch customer for the software.

Undeterred by the slowdown in scheduled flying, Cargojet launched a weekly service from Hamilton via Halifax to Liege on 1 November. The new link comes at a time when Canadian and European companies are looking to expand their transatlantic business in response to trade barriers with the United States.

Originating in Cargojet’s hub, the flight can draw on cargo from all over the airline’s Canadian network. Halifax has been a regular stop for transatlantic freighter flights to load up on fish and seafood.

Cargojet is set to add a B767 freighter to its fleet in January, which is currently undergoing conversion into all-cargo configuration. For the near future, this will be the last plane to join its line-up. The company has sold two 767s and will return one leased freighter in January.

Another departure is looming – after more than two decades, Mr Porteous will retire at the end of the year, with co-CEO Pauline Dhillon becoming sole chief executive. Mr Porteous will stay on through 2026 as a strategic advisor.