Q2 2026 Cargojet Inc Earnings Call Transcript
Key Points
- Strong financial performance with revenue of $275.8 million and adjusted EBITDA of $87.3 million, both up year-over-year and sequentially.
- Industry-leading on-time performance of 99.2%, demonstrating operational excellence and reliability.
- Successful launch of new Liège-Tel Aviv service and expansion of international network, leveraging existing assets to improve fleet utilization.
- Charter business grew 37% year-over-year, driven by strong demand and continued support for UPS, with the partnership extended through Q4.
- Completed a five-year pilot agreement with balanced terms, including productivity improvements and a no-strike, no-lockout provision, ensuring operational stability.
- Higher fuel prices and geopolitical uncertainty remain headwinds, causing a 260 basis point dilution in adjusted EBITDA margin.
- Hybrid ACMI revenue declined 12% year-over-year due to the transition from East-West to North-South flying, with the comp effect not fully normalized until later quarters.
- New pilot agreement includes a 26% wage increase effective July 1, 2026, with annual 5% increases, which will pressure costs until customer agreements are repriced.
- Long-term visibility in the charter business remains limited, with potential impact from the winding down of MD-11 support flying.
- Customer agreements for major contracts are not due until 2029-2030, meaning cost pass-throughs from the pilot wage increases will lag, impacting near-term margins.
Good day, and welcome to the Cargojet Canada Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to David Tomljenovic. Please go ahead.
Good morning, everyone, and thank you for joining us today on this call.
With me on the call today are Ajay Virmani, Executive Chairman, Pauline Dhillon, Chief Executive Officer, Aaron McKay, Chief Financial Officer, Sanjeev Maini, VP Finance, and Rémi Tremblay, General Counsel and Corporate Secretary. After opening remarks about the quarter, we will open the call for questions.
I'd like to point out that certain statements made on this call, such as those relating to our forecasted revenues, costs, and strategic plans, are forward-looking within the meaning of applicable securities laws. This call also includes references to non-GAAP measures like Adjusted EBITDA, Adjusted Earnings Per Share, and Return on Invested Capital. Please refer to our most recent press release in MD&A
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