Scheduled cargo airline Cargojet has been awarded a C$1 billion (US$903 million)renewable seven-year contract to provide domestic air cargo services to Canada Post and its Purolator division, reports The Canadian Press.
Cargojet says the contract includes Purolator's national air cargo network, and it plans to expand and enhance its domestic overnight network to handle the additional volumes.
Said Cargojet CEO Ajay Virmani: "Cargojet and the Canada Post Group of companies will work together to provide Canadians with world-class and flexible air cargo services in today's changing business environment."
Said Canada Post president Jacques Cote: "This move will drive operational efficiencies, lower transportation costs and help ensure our parcel delivery remains competitive."
RBC Dominion Securities analyst Walter Spracklin said the deal will enable Cargojet to optimise its current fleet. "With a near doubling of anticipated revenue and margin leverage, we see this contract win as driving a significant increase in CJT share price - with potential for further upside." Mr Spracklin said.
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