Air Canada leases surplus Boeing 767 freighter aircraft to Ethiopian Airlines

December 9, 2024

Air Canada has leased out two lightly used Boeing 767-300 freighter aircraft to Ethiopian Airlines, the largest passenger carrier in Africa and a rising player in the air cargo market with 17 dedicated freighters, FreightWaves has learned.

Air Canada (TSX: AC) pulled the factory-built Boeing 767 cargo jets, which are 2 years old, from its fleet in the second quarter because it didn’t have enough business to operate them economically. They have been at an airframe services and maintenance facility in Kansas City, Missouri, for several months for unspecified upgrades.

The cargo division of Ethiopian Airlines recently agreed to lease the newbuild, medium freighters, Matthieu Casey, managing director, commercial, at Air Canada Cargo, said in an email message on Sunday. Management had previously not discussed its intentions for the aircraft. Casey declined to provide the length of the lease.

Data on aircraft tracking site Flightradar24 shows one of the 767-300s departed Kansas City on Thursday and arrived in Addis Ababa on Friday.

Air Canada Cargo currently operates six older 767-300 aircraft that were converted from passenger to cargo configuration, mostly in the Americas and to Europe. Freighters allow the airline to provide consistent capacity for shippers on key trade lanes versus passenger aircraft, which also carry freight but are subject to schedule and route changes based on travel demand.

Canada’s flag carrier launched a freighter division in early 2022 to capitalize on record demand for airfreight during the COVID crisis but scaled back fleet plans when the market experienced a 16-month downturn that lasted through much of last year. Early this year, Air Canada took a one-time charge of $14.5 million for backing out of a deal for the conversion of two additional 767s. In September 2023, it canceled an order with Boeing for two 777-200 production freighters.

The decision to shut down the two newbuild freighters within a year of delivery was made in the midst of a remarkable recovery for the air cargo market that began last fall. Demand has grown year over year for 15 consecutive months and has remained about 12% higher for the entire year so far compared to the same period in 2023. Canada’s limited population and all-cargo carrier Cargojet’s dominant position in the Canadian market has made it more difficult for Air Canada to grow its cargo business, analysts say.

“Our current operating fleet size of six freighters is a well-tailored and strategic fit to our overall network and fits very well within our geographical strengths of connecting the Americas and our growing global network. The fine tuning of our fleet size and network that has taken place over the past year has proven successful and we’re pleased with the stability this network provides,” Casey said in the message.

Ethiopian Cargo focuses on Africa market

Ethiopian Airlines is ranked No. 21 in the world by volume carried and is the largest cargo-network carrier in Africa. The company has set a goal for cargo to be a stand-alone profit center by next decade. It currently operates 10 Boeing 777 long-haul freighters, four standard-size 737-800 converted freighters and three leased 767-300 converted freighters, one of which has been grounded for more than three months. Four additional 777 production freighters are scheduled for delivery next year, but the schedule could be pushed back because of a recent strike at Boeing and other factory problems. The airline also has a tentative agreement with Boeing for the purchase of five 777-8 freighters, a next-generation aircraft that is still in the testing phase.

Ethiopian Cargo last year completed a large warehouse at its Addis Ababa hub that is dedicated to e-commerce shipments.

Ethiopian Airlines didn’t respond to a message seeking details about the Air Canada transaction.

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