Big shakeup in Canada’s air express scene

Canada-based all-cargo carrier Cargojet received a contract award from Canada Post, estimated to be worth more than US$900 million over its seven-year term. The contract, which takes effect 1 April 2015, covers the provision of Canada-wide air cargo service for the Canada Post Group of Companies. One of the companies in the Canada Post Group is express freight and parcel operator Purolator, and the bulk of the cargo coming to Cargojet through the contract will be overnight parcels for Purolator, although there will also be mail for Canada Post itself. Cargojet shares rose 22% following the announcement.

The contract has long been held by Kelowna Flightcraft, which currently services it with a fleet of thirteen 727-200Fs and one DC-10-30F. Kelowna won the Purolator contract in 1977, with the Canada Post contract coming later, and has held them both ever since, so the new award marks the first change in almost forty years.

Cargojet now operates two 767-200Fs, one 757-200F, and nine 727-200Fs from its hub in Hamilton (YHM). It also recently acquired two more 757-200Fs which are expected to enter service shortly. However, Cargojet said that as a result of the award, it would enhance and expand its domestic overnight network to handle the Purolator traffic. No announcement has been made regarding fleet expansion, but Cargo Facts believes the carrier will replace most of the 727-200Fs with 757-200Fs, and will likely also acquire more 767 freighters.

Learn more about the international air cargo market at Cargo Facts Asia, April 1-2 in Hong Kong. Click here for details.