Air Canada Cargo will offer drone-based services thanks to a new agreement with Drone Delivery Canada (TSXV: FLT), a Toronto-based startup that makes autonomous cargo aircraft and a proprietary flight platform.
Drone Delivery Canada (DDC) announced the agreement on June 4. Air Canada (TSE: AC) will market and sell the company’s services, while DDC will build and operate up to 150,000 routes.
The deal represents a major leap for the drone maker in the early stages of commercializing its operations. Partnering with Canada’s largest airline and air cargo provider provides DDC a platform to expand well beyond successful pilot programs in select rural communities.
“This agreement greatly accelerates our commercial roll out in Canada,” said DDC chief executive officer Tony Di Benedetto in a statement. “Our drone delivery services will be extensively marketed as we work to establish operations across the country leveraging Air Canada Cargo’s brand presence and their established sales network and marketing reach.”
A deal with Air Canada was not unexpected. Tim Strauss, the airline’s Vice President for cargo, sits on DDC’s advisory board. But a 10-year deal reflects a serious commitment to making drones part of the airline’s cargo strategy.
The large size of Canada’s land mass compared to its population of 36 million is a natural fit for drones. They have the potential to provide cost-effective, timely deliveries in sparsely populated areas, particularly in the far north of the country.
“We believe drone technology has the potential to offer the cargo community cost-effective solutions to complex issues related to supply chain distribution in non-traditional markets, including remote communities in Canada,” Strauss said in a statement.
DDC’s largest drone, the Condor, can deliver 400 pounds of cargo up to 124 miles away.