Canadian airfreight carriers post strong Q2 results

MONTREAL and MISSISSAUGA, Ontario – Air Canada Cargo and Cargojet both reported improving results in the second quarter of 2020.

Air Canada Cargo reported a revenue increase of 52 percent in the second quarter over the previous year, and for the first time cargo revenues outpaced passenger income as a result of the Covid-19 pandemic.

Since March, Air Canada Cargo has operated over 2,000 cargo-only flights across a global network that includes cities in Europe, Asia, South America, the United States as well as New Zealand and Australia. Cargo-only flights represented 38 percent of all widebody flights in Q2 2020, representing more than 40 percent of total cargo revenue.

“For the first time ever, our cargo revenues exceeded passenger revenues in the quarter,” said Calin Rovinescu, president and CEO of Air Canada. “Over the course of the pandemic and through the second quarter we’ve continued our focus on airfreight to meet immediate and exceptional demand for medical equipment, critical goods and the regular movement of time sensitive air cargo.”

Cargojet also saw better results in Q2 2020 over Q2 2019. Revenues for the quarter were $196.1 million compared to second quarter 2019 revenues of $119.1 million. Margin was also up to $90.7 million compared to second quarter 2019 gross margin of $26.6 million. Profit also increased from $91.1 million compared to second quarter 2019 $37.5 million.

Cargojet’s domestic revenues benefited from a strong e-commerce growth driven by the work-from-home economy that were partially offset by lower B2B volumes, as most non-essential businesses were closed in the early part of the quarter. B2B volumes rebounded late in the quarter as economies started to re-open across the country.

E-commerce growth continues to accelerate as retailers of all sizes moved their sales to online channels, resulting in strong growth in the B2C business. As reported by Statistics Canada, in April e-commerce sales as a percentage of total retail sales doubled to 14% compared to Q1 of 2020 and were up 120 percent in May compared to May 2019.

“Reduced global air cargo capacity, as a result of extremely reduced passenger flights, led to strong aircraft leasing growth in international markets that we believe will continue for the short and medium term. We also realized strong ad-hoc international charter revenues operating during the period, providing capacity to bring PPE and other medical supplies back from Asia for various government agencies that may not be recurring,” said Ajay Virmani, Cargojet’s president and CEO.

Cargojet also announced it is contributing $2.5 million to the Cargojet Foundation with the goal of supporting health care institutions better prepare to cope with a potential second wave of the Covid-19 pandemic; supporting measures to combat racial inequality; and, supporting the most vulnerable groups of our society that are particularly hard hit by the ongoing pandemic.

“This pandemic has exposed several weak spots in our society. From the limitations of the healthcare system to the fragility of life for the most vulnerable members of our communities,” Virmani said. 

The Cargojet Foundation, a registered charitable entity, was launched last year.