Perseverance sends Cargojet soaring
Delivery airline beat odds to move to profitability from bankruptcy
TORONTO Once hobbled by bankruptcy, Cargojet is now soaring.
But it has taken perseverance and long-term thinking to get things off the ground, according to CEO Ajay Virmani.
The Delhi-born businessman acquired the cargo operation of Canada 3000, a discount airline that was forced into bankruptcy in the wake of 9/11, in early 2002. When Virmani took over, the company had just four aircraft.
“There I was, partnered with a bankrupt company, so I had to decide whether to walk away from it or invest more money,” he said.
While several investors backed out, Virmani saw an opportunity to change course, and rebranded the company Cargojet.
In the fourteen years since, the company has grown its fleet to 25 repurposed Boeing planes, and now has over 800 employees — up from just a few dozen at its inception. The company also provides international charter flights, but most deliveries are made within Canada.
On Monday, the air cargo company headquartered in Mississauga, Ont. announced its second quarter results, reporting revenue of $79.3 million, up from $75.2 million a year earlier. Profit for the company was $3.8 million, up from a loss of $6.1 million the previous year.
The announcement follows a tailwind of strong first quarter earnings — propelled by an estimated $1-billion contract with Canada Post — and growing demand for overnight delivery across the country. The company delivers over 300 tonnes of cargo every night, operates in 14 Canadian cities, and has recently worked with Air Canada Cargo to provide deliveries to and from South America.
The company’s stock price has increased to $36.10, up from the $14 range prior to the Canada Post deal in early 2014.
Cargojet recently won a contract with Canada Post and Purolator for overnight deliveries. The deal is expected to be worth about US$1 billion over seven years, based on current projections.
With Cargojet rapidly expanding its business, Virmani says he wants to make sure that the company stays true to its founding principles. Over the past two months, he has travelled across Canada, meeting with workers at every stop along Cargojet’s routes. Speaking to employees in Hamilton recently, he reminded them to remember Cargojet’s humble beginnings.
The company says it has a 98.5 per cent on-time delivery rate, and has been awarded “Carrier of Choice” five years in a row by Canadian Transportation and Logistics Magazine.
“If we can provide good, reliable service in the marketplace, the sky’s the limit,” he said.