Air Canada doesn’t just check the waters for an autonomous shipping department, it jumps on any foot.
The carrier was one of the first to exploit the profit opportunities of passenger aircraft only when the pandemic ended normal activities and found that there is a strong demand for more cargo transport in the Canadian market.
He then introduced a shipping airline within an airline to take advantage of the continued shortage of air bridges and the rise of e-commerce.
The initial plan to retire 8 Boeing 767s and turn them into shipping aircraft capable of carrying heavy boxes on the main deck. Air Canada now operates two of those aircraft under a sale agreement with subsequent lease with Air Transport Services Group (NASDAQ: ATSG). it maintains ownership of the other six, which will be re-delivered through an Israeli conversion facility for the next 18 months.
Last week, Air Canada (OTCUS: ACDVF) reported that it had acquired two factory-made 767 freighters from Boeing, scheduled to enter service in 2023, and ordered two 777 freighters for delivery in 2024.
The 777s are larger and Air Canada’s seriousness in its operations on long-haul industrial routes in Asia.
Air Canada’s shipping revenue fell 16. 4% in the current quarter to C$299 million ($234 million) compared to the same period a year earlier. The company attributed the decline to normalizing yields and easing shipping flights only in the Pacific market due to COVID lockdowns in China and, to a lesser extent, in Hong Kong and Japan. Although transient cargo ships have relocated to other regions, emerging revenues from Europe, Australia and the Americas have not compensated for the loss of revenue in China.
Freight revenue increased 9% year-over-year in the first six months thanks to higher yields.
Air Canada reinstalled all seats on seven wide-body aircraft that were changed during the pandemic to provide shipping capacity in the passenger cabin as well as below deck.
Officials say new investments in freight transportation, improved bloodless garage facilities, are generating more freight forwarder activity, diversifying revenue and minimizing seasonal slowdowns related to passenger schedules.
Air Canada has operated more than 14,000 cargo aircraft since March 2020, and has added several wide-body aircraft whose seats have been temporarily removed to bring soft boxes into the cabin. Since then, most aircraft have returned to regular passenger service as air bounces.
But Air Canada Cargo announced this month that it reintroduced 3 weekly shipping flights between Toronto and Shanghai, China, bringing the total number of shipping flights to seven in one week.
There will also be a greater shipping capacity in the passenger service superior to Vienna, Copenhagen, Denmark; and Delhi, India, Montreal and Toronto.
Air Canada Cargo also recently began promoting capacity in CargoAi’s virtual marketplace, allowing freight forwarders to get dynamic quotes and booking space without delays without time-consuming manual confirmation. The company also participates in WebCargo, another multi-party booking site.
Overall, Air Canada reduced its operating loss to $197 million. Earnings before interest, taxes, depreciation and amortization of $120 million exceeded analysts’ expectations due to higher expenses related to higher wages and salaries, aircraft maintenance, and airport and navigation expenses.
The company expects passenger capacity to reach 80% of 2019 levels in the third quarter. Management expressed confidence in monetary functionality in the current part of the year due to strong passenger demand and willingness to pay higher fares, as well as reduced fuel prices. .
Toronto Pearson International Airport was one of the hardest hit airports in North America in terms of operational difficulties. Recently, Air Canada removed 154 daily flights from its schedule as it tries to regain operational stability.
(Correction: Freight earnings figures have been adjusted to reflect current quarter results, first quarter results. )
Click here for more FreightWaves/American Shipper through Eric Kulisch.
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