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Trans-Pacific market lifts Air Canada cargo results

Airline optimistic about shipper demand in 2025 as widebody flights to China set to resume

Air Canada Cargo’s fleet of Boeing 767-300 cargo jets helped produce solid revenue growth in the Americas during the third quarter. (Photo: Air Canada)

Air Canada said Friday that cargo revenue grew 18% to 253 million Canadian dollars ($181.8 million) in the third quarter on the back of higher yields and shipment volume carried on large passenger aircraft operating in the trans-Pacific market.

“The overall cargo environment is quite favorable. I would say it’s quite favorable in Asia-Pacific. We see similar trends in India,” said Mark Galardo, president of cargo, during a call-in briefing with analysts about the company’s earnings. “And those really kind of stand out in terms of weakness or any areas of concern, none at this time. And we think this cargo tailwind continues into Q4 and the early part of next year.”

His comments echo the head of DHL Global Forwarding in the Americas, who said last month that air exports from Asia to North America are expected to remain strong into the first quarter.

Higher revenues from six Boeing 767-300 converted freighters on North and South American routes also contributed to the higher cargo revenue, which was partly offset by lower revenue in the trans-Atlantic market, according to Air Canada’s (TSX: AC) earnings report.


“Our right-sized network and freighter-to-belly commercial model are producing solid financial results that we believe are sustainable in the long run. We’re confident that cargo will continue to perform well,” Galardo said, referring to Air Canada’s ability to reach more customers by using the passenger network to feed cargo jets in Toronto; Vancouver, British Columbia; and other main hubs.

Earlier this year, Air Canada Cargo removed two newly purchased Boeing 767-300 freighters from its fleet to align operations with market demand and reduce negative cash flow. In May, Canada’s flag carrier canceled orders with an aerospace firm to convert two 767 aircraft to freighters, citing the drop in demand as the primary reason. The move followed last September’s cancellation of an order with Boeing for two production 777 cargo jets, which are much larger than the 767.

Air Canada is likely to pick up more cargo business over the Pacific Ocean with the resumption of daily service from Vancouver to Shanghai and Beijing on Dec. 7. An announcement this week said the flights will be operated with Boeing 787 Dreamliners. The new flights were made possible after Canada and China recently lifted traffic limits. 

Airlines and logistics companies are riding a strong demand wave for air transport this year, with volumes about 11% higher for the first nine months of the year compared to 2023. E-commerce, perishable and other shipments have been filling aircraft on trunk routes out of China and other parts of Asia to Europe and North America. Airlines also benefited from shippers diverting some goods from ocean to air to avoid delays related to Red Sea rerouting.


Cargo revenue growth at Air Canada fell between that of other airlines reporting results so far. Delta Air Lines recorded a 27% bump in cargo revenue ($196 million), while United Airlines was up 25% to $415 million. American Airlines’ cargo revenue in the third quarter increased 5% to $202 million, while Lufthansa Cargo posted a 16% revenue gain. Japan Airlines on Friday said international cargo revenue increased 28.6%.

Lufthansa Cargo is the only one among the group, besides Air Canada, that operates widebody freighter aircraft.

Last month, Air Canada Cargo opened a new cold-chain facility at London Heathrow Airport, its largest European hub. The upgraded facility has larger temperature-controlled areas than before.

Results companywide were better than analysts predicted. Revenue was down 4% to $4.4 billion, and adjusted operating income declined $220 million to $1 billion, largely due to excess capacity in the domestic passenger market.

Air Canada dodged a major revenue hit in mid-September when the company reached an agreement with the pilots union on a new labor contract, forestalling a threatened strike. Pilots ratified the contract on Oct. 18. 

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, Eric was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at ekulisch@freightwaves.com