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Air Canada to sets freighter fleet to expand cargo business

AIR Canada is preparing to turn 767s into permanent freighters to establish main deck capacity as a long-term strategic plank in its operation, reports London's Loadstar

24 November 2020 - 19:00

AIR Canada is preparing to turn 767s into permanent freighters to establish main deck capacity as a long-term strategic plank in its operation, reports London's Loadstar.

The airline was the first to remove seats and deploy passenger aircraft as freighters back in April, when Covid-19 lockdowns grounded fleets and has been a prolific user of 'preighters' operating three B777-300s and four A330-300s without seats for cargo missions and clocked up more than 3,000 such flights since the spring. During the fourth quarter, it plans about 100 cargo flights a week.



Air Canada cargo chief Vito Cerone, said the cargo division could deploy more passenger planes for cargo missions if required, but the airline had no intention of taking seats out of more passenger aircraft.



While 'preighters' have played an important role in moving cargo and will likely be needed to move the Covid-19 vaccine, operators have pointed out that the operating economics are not very impressive. Avianca suspended the use of passenger aircraft flights for cargo missions once yields retreated from their plateau reached in April/May.



However, as the prospect of passenger numbers returning to pre-pandemic levels recedes, management finds itself with parked aircraft that can perform better than 'preighters': the airline has a fleet of 30 767-300ERs that are idle at this point.



'They've been parked, so why not convert them and operate them as freighters?' Mr Cerone said.



In the second quarter, cargo revenue exceeded that from the passenger business for the first time, and in the third quarter, reached C$216 million (US$166.2 million), up 22 per cent year on year, while overall revenues were down 86 per cent, resulting in a C$685 million loss.



Announcing the Q3 results, CEO Calin Rovinescu, who will step down at the end of the year, unveiled the plans for freighter operations, adding: 'Cargo will become an increasingly important part of our business as we plan to expand to dedicated freighter business.'



With belly capacity and passenger revenue expected to take two to three years to recover, the contribution from cargo will remain disproportionately high for some time, but the freighter strategy is aiming beyond the near term, said Mr Cerone.



Air Canada intends to start the freighter operation with two 767s. Down the road, this could rise to about to six planes, Mr Cerone reckons.



Assuming that the road to take-off is smooth, he hopes this can become established before the fourth quarter of next year.


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