Tag Archives: 727200F

Air Canada and Cargojet sign a LOI to explore strategic opportunities

Air Canada (Montreal) and Cargojet Airways (Hamilton) today announced they have signed a Letter of Intent (LOI) to explore strategic opportunities in both cargo and airline operations within Canada and in international markets.

The carriers intend to pursue strategic opportunities and increase cooperation in various areas such as global sales and marketing, expanded interline opportunities and enhanced connectivity that would increase revenues and reduce operating costs. Both airlines would work towards providing optimized services to the shipping community on their respective networks.

“We are looking forward to working with Air Canada towards improving the depth and reach of both companies’ air cargo services, both domestically and internationally, among other strategic opportunities,” said Ajay K. Virmani, President and Chief Executive Officer of Cargojet.

“We are very pleased to be in discussions with Cargojet to explore opportunities for revenue growth and synergies that will be mutually beneficial for both our companies and customers,” said Lise-Marie Turpin, Air Canada Cargo Vice President.  “Developing further our relationship with Cargojet is an exciting opportunity.”

The implementation of new strategic initiatives would be subject to Air Canada and Cargojet making any necessary filings, obtaining regulatory approvals and finalizing documentation.

Air Canada Cargo provides direct cargo service world wide offering the shipping community business solutions that meet their needs efficiently and cost effectively.  Air Canada is Canada’s largest domestic and international airline serving more than 175 destinations on five continents.  Canada’s flag carrier is among the world’s 10 largest commercial airlines and in 2012 served close to 35 million passengers.  Air Canada provides scheduled passenger service directly to 60 Canadian cities, 49 destinations in the United States and 67 cities in Europe, the Middle East, Asia, Australia, the Caribbean, Mexico and South America.

Cargojet is Canada’s leading provider of time sensitive overnight air cargo services that constitutes over 50 per cent of domestic overnight air cargo capacity. Cargojet operates its network across North America each business night, utilizing a fleet of thirteen all-cargo aircraft.

Copyright Photo: Ton Jochems/AirlinersGallery.com. Cargojet is still an operator of the Boeing 727 but it has also added a Boeing 757-200 and two 767-200 freighters for its longer-range cargo routes. Former Eastern Airlines Boeing 727-225 C-GCJB (msn 21855) waits at Vancouver for the next assignment.

Air Canada: AG Slide Show

Cargojet Airways: AG Slide Show

FedEx accelerates the retirement of 86 aircraft, the last Boeing 727 to be retired on July 1

FedEx Corporation (FedEx Express) (Memphis) announced today it had permanently retired or will accelerate the retirement of 86 aircraft and 308 related engines as it continues to modernize its aircraft fleet and improve the global network of FedEx Express.

The permanent retirement of aircraft and related engines announced today includes:

  • Two Airbus A310-200 aircraft and four related engines;
  • Three Airbus A310-300 aircraft and two related engines; and
  • Five McDonnell Douglas MD-10-10 aircraft and 15 related engines.

The impact of retiring these aircraft, engines and parts resulted in an impairment charge of $100 million recorded in May 2013.

In addition, FedEx will accelerate by several years the retirement of:

  • 47 McDonnell MD-10-10 aircraft and 172 related engines;
  • 13 McDonnell MD-10-30 aircraft and 55 related engines; and
  • 16 Airbus A310-200 aircraft and 60 related engines.

As of July 1, 2013, FedEx Express will complete the final retirement of the Boeing 727-200 fleet.

“We are modernizing our aircraft fleet by retiring older, less-efficient, and less-reliable aircraft and replacing them with modern aircraft to build a fleet with higher reliability and better cost efficiency,” said David J. Bronczek, president and chief executive officer of FedEx Express. “With the planned acquisition of new aircraft and projected slower economic growth than previously forecast, FedEx Express is lowering maintenance costs by aggressively parking and retiring aircraft.”

The impact of accelerating the retirement of aircraft will result in additional year-over-year depreciation expense of $74 million in FY14.

FedEx Express Aircraft Fleet Facts

  • As of February 28, 2013, FedEx Express’s fleet totaled 660 aircraft, including 368 jet aircraft.
  • During the four quarters ended on February 28, 2013, FedEx Express spent $3.8 billion on 1.2 billion gallons of jet fuel.
  • The Boeing 757-200 is significantly more fuel efficient per pound of payload and has 20% additional payload capacity than the Boeing 727 it replaces.
  • The Boeing 767 will provide similar capacity as the MD-10s, with improved reliability, an approximate 30% increase in fuel efficiency and a minimum of a 20% reduction in unit operating costs.
  • The Boeing 767 shares spare parts, tooling and flight simulators with the B757.

Dividend Declaration

The Board of Directors today declared a quarterly cash dividend of $0.15 per share on FedEx Corporation common stock, an increase of $0.01 per share over the previous dividend payment. The dividend is payable on July 1, 2013 to stockholders of record at the close of business on June 17, 2013. FedEx remains committed to paying higher dividends to shareowners in years to come.

Copyright Photo: Bruce Drum/AirlinersGallery.com. The pictured Boeing 727-233 (F) N221FE (msn 20932) was originally delivered as a passenger aircraft to Air Canada as C-GAAA on September 25, 1974.

FedEx: AG Slide Show

Cargojet is profitable for the fourth quarter and 2012

Cargojet Inc. (Cargojet Airways) (Hamilton) announced today financial results for the fourth quarter and twelve-month period ended December 31, 2012 .

For the Fourth Quarter Ended December 31, 2012:

  • Total Revenues were $46.4 million , an increase of $3.5 million or 8.2% versus the previous year.
  • Gross Margin was $8.8 million , an increase of $1.7 million or 23.9% versus the previous year
  • EBITDA was $5.4 million , an increase of $2.2 million or 68.8% versus the previous year

For the Twelve Months Ended December 31, 2012:

  • Total Revenues were $168.8 million , an increase of $3.3 million or 2.0% versus the previous year.
  • Gross Margin was $28.3 million , a decrease of $1.5 million or 5.0% versus the previous year
  • EBITDA was $16.9 million , an increase of $1.7 million or 11.2% versus the previous year

“We are very pleased with our financial results, as we continue to operate in a challenging economic environment,” said Ajay Virmani, President and Chief Executive Officer.  “Lower costs and greater efficiencies have combined with stronger core overnight and charter revenues, to provide for a strong finish to the year,” he added.  “We are encouraged by the volume growth in the last half of the year and will continue to focus on new revenue opportunities and continued prudent cost management as we move forward into 2013”.

Copyright Photo: TMK Photography. Cargojet is one of the last cargo operators of the Boeing 727 freighter in North America. Ex-Eastern Boeing 727-225 (F) C-GCJB (msn 21855) taxies at the Hamilton hub.

Cargojet logo

Cargojet Airways: AG Slide Show