Cargojet Airways (W8, Hamilton, ON) is planning to place four to five surplus B757-200(PCF)s under long-term wet- or dry-lease contracts to "significantly offset aircraft costs and depreciation expenses" as the cargo market tightens, President and Chief Executive Ajay Virmani said during the carrier's quarterly earnings call.

"Because of certain macro trends, we have now continued with the B767s in domestic operation because it reduces the number of block hours and also has a cost advantage. So that will free up between four and five B757s. At this point in time, we are trying to market these as a dry lease or wet lease opportunity, whatever we can do. We are actively going to be looking at these opportunities in the next coming weeks," he explained.

The Canadian cargo specialist owns and operates fifteen B757-200(PCF)s, including one recently converted and inducted into service in late April 2023. It has an additional two units on order under conversion, with deliveries planned by mid-2023. The aircraft in service are 28.7 years of age on average.

The ch-aviation fleets module shows that Cargojet Airways' fleet also comprises three B767-200(ERBDSF)s, four B767-300ER(BCF)s, and fifteen B767-300ER(BDSF)s.

Chief Strategy Officer Jamie Porteous said the mixed B757/B767 fleet is very efficient thanks to their common type rating.

"A pilot can literally get off of a B767 and get on to a B757. We don't have any restrictions in that matter, and we'll adjust. It may not necessarily adjust block hours, but it will reduce some operating costs if we're able to downsize a B767 on a certain route to a B757 or consolidate two B757s into a B767," Porteous explained.

He emphasised that the potential lease-out of the four to five B757s would not cause any service reduction, as the airline would look to transfer these routes to larger B767s.

The carrier revealed in its financial report that the B757s were flying 14 hours per day on average in the first quarter of 2023, compared to just four hours for the B767-200(ERBDSF)s and 18 hours for the B767-300 freighters.

The carrier plans to expand into the B777 Family, although it has recently revised those plans significantly due to prevailing recessionary concerns. It sold the first two of its four B777-300(ER)s slated for conversion in February 2023 and is in negotiations to sell the other two this year, earning a total of USD80.5 million from the four jets. The airline retains its conversion slots and has not changed its plans to add four converted B777-200(LR)(MF)s, which are scheduled to deliver between the first quarter of 2024 and the first quarter of 2025.

"We have not changed our plans for the first four B777s, as these are essential to support customer requirements, or what we refer to as strategic revenue growth. We have not cancelled any of our conversion slots for both strategic and general revenue growth. At this time, we still believe that these are essential to support Cargojet's long-term growth strategy, and we are confident that future feedstock can be acquired closer to the scheduled conversion dates under similar terms and conditions," Chief Financial Officer Scott Calver said.

Cargojet posted CAD231.9 million Canadian dollars (USD170.1 million) in revenue in the first quarter, on par with its 2022 result, recording a CAD30.5 million (USD22.4 million) net profit, compared to CAD56.4 million (USD41.4 million) net loss a year ago.