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Monday, June 17, 2024
Logistics

Bad luck hampers start of WestJet freighter operations

Canadian passenger airline WestJet is finally on the precipice of activating its first cargo jets after nearly a year of costly regulatory delay. Before the new venture can be realized, the company must endure one more false start and Boeing’s late delivery of one aircraft.

WestJet Cargo, which until now managed shipments on passenger planes, said Monday that Transport Canada has certified its four Boeing 737-800 converted freighters and that it will deploy them in commercial service beginning April 22, 10 months behind schedule.

The airline declared late last year that it would start all-cargo service on March 26 after postponing a planned launch last summer, but the schedule slipped again after Transport Canada took longer than expected to approve the new freighter configuration. 

FreightWaves reported in November that WestJet mistakenly assumed Canadian aviation regulators would quickly rubber-stamp a U.S. Federal Aviation Administration endorsement and approve Boeing’s design for changing used 737-800 passenger aircraft into dedicated cargo jets. Instead, Transport Canada conducted an exhaustive certification process in the wake of two deadly crashes, multiple manufacturing snafus and allegations that Boeing officials had misled regulators about several issues related to safety. With trust in Boeing at an all-time low, Transport Canada opted to conduct its own technical analysis rather than accept U.S. or Boeing decisions at face value.

The slow certification process has been a major setback for WestJet, which originally planned to launch service with two freighters last June and add the other two in the second half of 2022. Compounding the lost revenue opportunity is that WestJet has had to pay for parking and other fees at Calgary International Airport after receiving three of the converted aircraft from its lessor last year.

Transport Canada’s approval of the 737-800 structural modifications, which include installation of a wide cargo door in the fuselage and reinforced flooring to support containers, allows WestJet to add the aircraft to its air operators certificate. But it still needs time to familiarize itself with the plane in operation, and complete technical acceptance and validation.

WestJet said in a news release that three of the converted freighters will be deployed next month while the fourth is expected to join the fleet later this year after completing its conversion.

WestJet spokeswoman Madison Kruger said the fourth aircraft is not ready because it has experienced production delays during the conversion process. She did not provide details about the nature of the problem.

It is unclear whether WestJet is making lease payments to BBAM Aircraft Leasing & Management while the jets are commercially inoperable. 

Finding a niche

WestJet is expanding its cargo footprint as the airfreight shipping market sinks from its 2021 peak and 16 months after Air Canada launched its stand-alone freighter division. But WestJet and its partner, GTA Group, say there is strong interest in more air cargo choices in Canada. 

The decision to go deeper into cargo was influenced by the extraordinary growth in e-commerce, which is driving more volume to the air cargo sector and creating a need for more aircraft that can quickly shuttle packages to cities for delivery to businesses and consumers. 

The airlines say there will be enough business because they are targeting different markets. 

WestJet has narrowbody freighters and will focus on domestic and regional markets that can be served more efficiently by smaller aircraft. Air Canada (OTCUS: ACDVF) operates a small but growing fleet of Boeing 767 medium widebody freighters on international routes to the U.S. Southeast and Latin America, as well as to Europe, and eventually to Asia. Cargojet (TSX: CJT) is a pure point-to-point cargo carrier that operates as a surrogate for express carriers, like Amazon (NASDAQ: AMZN) and DHL in Canada, with a large fleet of 767s that are also used for charter operations. Cracking Cargojet’s dominant position in the domestic, overnight delivery market will be difficult.

WestJet’s dedicated freighters will initially connect the Canadian cities of Calgary, Halifax, Toronto and Vancouver, with routes from Toronto to Miami and Los Angeles. 

“We thank Transport Canada for its dedication to certifying these aircraft, which will serve to better support Canada’s national transportation supply chain through increased competition and capacity within Canada’s air cargo market,” said Kirsten de Bruijn, executive vice president for cargo. 

The passenger network gives WestJet Cargo more reach into other destinations with the ability to feed the freighters, which provide reliable capacity on high-demand lanes.

GTA Group will provide ground handling support for WestJet’s freighters at its Toronto hub and market their space to shippers. GTA is a joint venture with Dnata, the airport services subsidiary of Dubai-based Emirates Group, which also owns a global airline by the same name. GTA provides ramp, passenger and cargo handling services to nearly 20 airlines in Toronto and expanded Canadian operations to Vancouver in 2021.

GTA Chairman Mario D’Urso said on LinkedIn Tuesday that the company will launch a new trucking service between Toronto and Montreal on May 1, with more routes to come. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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