Cargojet Airways (W8, Hamilton, ON) says it has secured a Domestic Air Cargo Network Services contract and a Master Services Agreement with the Canada Post Group of Companies (CPGOC) for an initial seven-year term.

Cargojet says the contract includes three 36-month renewal options and based on projected volumes, is likely to generate CAD1billion (USD0.9billion) in revenue for the first seven years.

Outlining the terms of the deal, Cargojet says it will provide comprehensive Canada-wide air cargo services for the CPGOC, including that of courier Purolator’s national air cargo network. The cargo carrier's own domestic overnight network will also be expanded and enhanced significantly to handle the additional volumes and will thus provide CPGOC with a virtual dedicated Air Cargo Network.

“Canada Post is undergoing a major transformation as customer demand shifts from mail to parcel delivery with online shopping,” said Jacques Côté, Group President, Physical Delivery Network, Canada Post. “This move will drive operational efficiencies, lower our transportation costs and help ensure our parcel delivery remains competitive from a cost and reliability perspective.”

The contract was previously operated by Kelowna Flightcraft (Kelowna).