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Cargojet Q3 earnings rise to US$4.4m on 10.8pc higher revenue
CARGOJET, an aircraft lessor and operator, posted third-quarter net earnings of CAD5.6 million (US$4.399 million), reversing a loss of CAD4.8 million for the corresponding period last year, on 10.8 per cent higher revenue year on year to total CAD89.4 million, thanks to the April launch of ACMI flights between the US and Canada under a three-year contract.
Under the terms of the aircraft, complete crew, maintenance and insurance (ACMI) contract, Cargoject operates six flights per week utilising Boeing 767-300 aircraft on behalf of an unidentified customer. The deal will generate CAD11 million in revenue per year.
However, the lessor's ACMI contract with Air Canada that includes two flights per week to South America and one flight per week to Europe is scheduled to expire at the end of the year. This coincides with the expiration of Air Canada's agreement with its pilots with regards Cargojet flying. This deal is worth CAD9 million per year in gross revenues, reported London's Air Cargo News.
Cargojet said it expects to replace these flights and offset lost revenues by operating the flights directly for its interline partners on similar routes as demand on these services remains strong.
Its overnight business also posted improved revenues as consumer demand and prices rose. There was also an increase for its charter business, mainly due to an uptick in activity to the Caribbean in response to the recent hurricanes in the region.
Commenting on the results, president Ajay Virmani said: "The significant increase in revenues and gross margin over the previous year was the result of the successful execution of our strategy to improve the utilisation of our aircraft assets and to maximize margins."
Last month, Canada Post announced it would extend its contract with Cargojet.
Under the terms of the aircraft, complete crew, maintenance and insurance (ACMI) contract, Cargoject operates six flights per week utilising Boeing 767-300 aircraft on behalf of an unidentified customer. The deal will generate CAD11 million in revenue per year.
However, the lessor's ACMI contract with Air Canada that includes two flights per week to South America and one flight per week to Europe is scheduled to expire at the end of the year. This coincides with the expiration of Air Canada's agreement with its pilots with regards Cargojet flying. This deal is worth CAD9 million per year in gross revenues, reported London's Air Cargo News.
Cargojet said it expects to replace these flights and offset lost revenues by operating the flights directly for its interline partners on similar routes as demand on these services remains strong.
Its overnight business also posted improved revenues as consumer demand and prices rose. There was also an increase for its charter business, mainly due to an uptick in activity to the Caribbean in response to the recent hurricanes in the region.
Commenting on the results, president Ajay Virmani said: "The significant increase in revenues and gross margin over the previous year was the result of the successful execution of our strategy to improve the utilisation of our aircraft assets and to maximize margins."
Last month, Canada Post announced it would extend its contract with Cargojet.
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