Air Canada will add 3 freighters in 2022 to diversify and maintain cargo growth
- Air Canada plans to add three dedicated freighters to its fleet in 2022 as the airline seeks to diversify its revenue streams in the face of declining passenger demand, said Executive Vice President and Chief Commercial Officer Lucie Guillemette. . in an earnings call on February 18.
- Air Canada posted record cargo revenues last year, helped by the temporary conversion of passenger aircraft to all-cargo configurations, according to its fourth quarter results. Now it is adding permanent cargo-only flights – it introduced its first Boeing 767 freighter in Decemberthe first of eight aircraft that will eventually make up its fleet of freighters.
- “Air Canada Cargo’s sustained performance will validate our decision to return to fully dedicated cargo aircraft in order to take advantage of cargo market growth in both dedicated space and freighters,” Guillemette said. “The freight business is an important part of our recovery and long-term growth, contributing to seasonality and diversification.”
Air Canada boosts cargo revenue as passenger numbers drop
Revenue by segment, since 2016
Overview of the dive:
The COVID-19 pandemic has caused demand for air travel to plummet, and airlines are still struggling to return to their pre-pandemic passenger activity levels. Freight operations, meanwhile, have been a bright spot for the industry – United Airlines and American airlines both reported record segment revenues in recent earnings calls.
The strong cargo performance also applies to Air Canada. The airline operated 10,217 cargo flights in 2021 alone, more than double the 4,235 it operated the previous year, according to its financial results. Passenger travel remains Air Canada’s primary source of revenue, but annual growth in passenger revenue (3%) has been significantly outpaced by its cargo business (63%) in 2021.
The use of converted passenger aircraft, which had seats removed from the passenger cabin to free up cargo space, supported these results. Air Canada plans to return all converted planes to passenger configuration by the end of 2022, executive vice president and chief financial officer Amos Kazzaz said on the call.
However, the airline still expects to benefit from increased air cargo demand through the use of its new dedicated freighters. Air Canada is also investing $16 million to enhance its cold chain processing capabilities at its cargo facility at Toronto Pearson International Airport, according to a statement.
“The project is part of Air Canada’s strategy to further develop its cargo division, which also includes the introduction of additional cargo aircraft, the launch of dedicated cargo routes and an expansion of the e-commerce delivery service.” , the statement said.
Several carriers other than Air Canada are expanding their cargo fleets to take advantage of new demand. CMA-CGM Group recently agreed to buy four freighters from Airbus, while DHL announced an order for nine converted freighters from Boeing in November.
“With sustained demand for air cargo linked to the expansion of e-commerce and the speed and reliability of air cargo, we expect the global cargo fleet in 2040 to be 70% larger than the pre-Secondary fleet. pandemic,” Boeing Chairman and CEO David Calhoun said. in an October earnings call.