Cargojet pulls back on aircraft acquisitions

A soft cargo market has prompted Cargojet to revisit its fleet plans through 2025.

The carrier is getting out of commitments to buy four Boeing 777 freighters, as well as looking to either sell or lease four Boeing 767 freighters it already owns.

“Forecasts continue to indicate that the international air cargo market will remain soft in the short to medium term and deploying B-777s into the market would not be strategically prudent. We have decided to exit our commitments for the four remaining B-777 aircraft, while continuing to flex our B-767 fleet to accommodate our organic growth strategy,” said Ajay Virmani, Cargojet’s executive chairman.

“Cargojet has substantially completed the operational groundwork to be able to enter the B-777 market should economic conditions change. Cargojet has also retained the rights to provide the optionality for future conversion slots.”

The measures are designed to hold the line on capital expenditures in order to “deliver strong cashflows and shareholder value,” said Pauline Dhillon, co-chief executive officer.

At the end of December 2023, the carrier had 17 Boeing 757 freighters and 24 Boeing 767 freighters in its operational fleet. By the end of 2024 that will change to 15 757s and 25 767s. in 2025 the company plans to add on more 767.

In a statement Cargojet said it currently owns the feedstock for two B767’s and plans to convert them as cargo demand begins to recover over the next couple of years. Management believes that the current fleet plan will be sufficient to meet its short to medium-term objectives and the company is positioned to scale up operations as the economic cycle returns to growth.

The carrier provides air cargo services to all major cities across North America, providing dedicated, ACMI and international charter services. It carries over 25,000,000 pounds of cargo weekly.