Cargojet Stock

Cargojet Inc. provides time sensitive overnight air cargo services and caries approximately 8,000,000 pounds of cargo weekly.

The company’ s business includes operating a domestic air cargo network between fourteen major Canadian cities each business day; providing dedicated aircraft to customers on an Aircraft, Crew, Maintenance and Insurance (ACMI) basis, operating between points in Canada, North America, South America, and Europe; operating scheduled international routes for multiple cargo customers between the U.S.A. and Bermuda, and between Canada and Germany; and providing dedicated aircraft to customers on an adhoc charter basis operating between points in Canada, the U.S.A., and other international destinations.

The company operates its business utilizing its fleet of all-cargo and passenger aircraft. The company’s domestic air cargo network consolidates cargo received from various customers and transports such cargo to the appropriate destination in a timely and safe manner.

The company’s strategy is to create sustained value and profitability and is based on various priorities, such as business development in local and international markets and increasing customer base.

In 2019, the company entered into a new strategic agreement with Amazon (Amazon.com NV Investment Holdings LLC, an affiliate of Amazon.com.ca, Inc.) in connection with Amazon and the company’s existing commercial agreement for overnight air cargo services and charters and Amazon’s utilization of those services to support fast delivery for Amazon customers in Canada.

The company purchased all assets and assumed all lease arrangements of a ground handling and ground support equipment company at Mirabel International Airport in Quebec.

Services Overnight Network

The company offers its overnight air cargo service between fourteen major cities across Canada each business night. Within its overnight network, the company also provides domestic air cargo services for various international airlines between points in Canada that connect such airlines’ gateways to Canada.

International Air Cargo Services

The company operates an international route operating between Newark, New Jersey, the U.S.A. and Hamilton, Bermuda.

Dedicated Aircraft Charter

The company offers a specialty charter service typically in the daytime and on weekends. The charter business targets livestock shipments, military equipment movements, emergency relief supplies and virtually any large shipments requiring immediate delivery across North America, Mexico, South America, the Caribbean and Europe. During pre- Christmas peak volume seasons, the company also offers dedicated aircraft to its major courier customers to handle increased United States-Canada premium overnight traffic.

Dedicated ACMI Contracts

The company provides and operates dedicated aircraft on an ACMI basis. This service involves providing a dedicated aircraft on a dedicated route where the customer is responsible for all costs of the operation, including fuel, navigation fees, landing fees, cargo handling and all other commercial activities.

Canada Post Group of Companies

The company provides Canada-wide air cargo services for the CPGOC, including Purolator Inc.’s national air cargo network. In 2014, the company entered into a Master Services Agreement (MSA) with the Canada Post Group of Companies, including Purolator Inc. (CPGOC). Pursuant to the MSA, the company provides CPGOC with domestic air cargo network services (DACNS) for an initial seven-year term with three 36-month renewal options held by CPGOC.

Customers

The company provides service to over 400 customers that are comprised of Canada’s major courier companies, retailers, freight forwarders, manufacturers, specialty shippers, and international airlines.

The company also handles the time sensitive shipment needs of customers, including pharmaceutical, perishable, seafood, agriculture, hi-tech, garment, precious metals, and chemical companies.

Regulation

The company holds Air Operators Certificates issued by Transport Canada for the operation of its aircraft. It is also licensed by the Canadian Transportation Agency to operate domestic, transborder and international all-cargo and passenger operations. The company has successfully passed periodic audits by both Transport Canada and the Canadian Transportation Agency and maintains excellent relationships with both regulatory bodies.

The company is also a member in good standing of the International Air Transport Association, the Air Transport Association of Canada, the Canadian International Freight Forwarders Association, the International Air Cargo Association, and the Canadian Courier & Logistics Association.

In addition to holding valid Canadian operating certificates, the company holds a valid Foreign Air Operators Certificate issued by the U.S. Federal Aviation Authority and is licensed by the U.S. Department of Transportation to operate all cargo and passenger operations in and out of the United States.

The company maintains a Security Program that is in compliance with Transport Canada regulations, the regulatory bodies of other countries, such as the U.S. Transportation Security Administration (TSA), as well as IATA in conjunction with their IATA Operational Safety Audit (IOSA) program.

Seasonality

The company has experienced its best operating results in the third and fourth quarters of each year (year ended December 2019). Shipping activity is usually the best in the fourth quarter as a result of the holiday season and is usually the lowest in the first quarter.

Competition

The company’s nearest competitor is Morningstar Air Express Inc.