Cargojet to exit commitments for 4 B777s

Cargojet has decided to exit commitments for the four remaining B-777 aircraft while continuing to flex its B767 fleet for its organic growth strategy.

“Throughout 2023, we exercised caution in deploying growth capital given the softer economic conditions,” says Ajay Virmani, Executive Chairman, Cargojet. "Forecasts continue to indicate that the international air cargo market will remain soft in the short to medium term, and deploying B-777s into the market would not be strategically prudent.

“Cargojet has substantially completed the operational groundwork to be able to enter the B-777 market should economic conditions change. Cargojet has also retained the rights to provide the optionality for future conversion slots."

Jamie Porteous, Co-Chief Executive Officer, Cargojet adds: “The holiday season performance for 2023 was in line with our expectations."

Pauline Dhillon, Co-Chief Executive Officer says: “With our optimised fleet strategy and cost efficiencies gained throughout 2023, we are well positioned to deliver strong cash flows and shareholder value."

Cargojet is not expecting to incur any meaningful growth capital expenditures in 2024.

Cargojet has four surplus B757 freighters, and is exploring options such as dry lease or ultimate sale of these aircraft. "The potential sale of these four B757s is not anticipated to have a material impact on revenues and/or adjusted EBITDA. In the event that the corporation enters into a leasing agreement, the revenue and adjusted EBITDA would increase in accordance with typical market terms and conditions for similar aircraft. The fleet table assumes two aircraft are dry leased and the remaining two B757s are sold.

Cargojet currently owns the feedstock for two B767s and plans to convert them as the demand begins to recover over the next couple of years.