There by Air

Air cargo is big business. It’s also an economic enabler and a lifeline to remote northern communities.

Globally, about $5.3 trillion in goods were transported by air in 2010, representing 35 per cent of world trade, according to the International Air Transport Association (IATA). 

Air freight is fast and reliable over great distances. However, because of the higher cost associated with this shipping mode, most of the goods flown are light, compact or perishable, and have a high value. Examples include electronic components, pharmaceuticals, and perishable products such as food and flowers.

Air cargo also supports the growth of global supply chains by facilitating the movement of time-sensitive goods for production or sale. In 2010, Canadian airlines had cargo revenues of $1.16 billion, reported Statistics Canada. The trans-border air cargo market grew 7.9 per cent in 2010 and 3.6 per cent in 2011. Northbound trans-border tonnage continued to exceed the southbound tonnage, as it has since the mid-1980s.

In the 1930s, Canadian bush pilots flew more air freight to remote regions than the rest of the world’s airlines combined, wrote aviation historian Ken Molson. The ability of aircraft to overcome vast distances, long winters and geographic isolation helped entrench air cargo as an essential part of northern Canadian life.

In November 1977, the U.S. air cargo industry was deregulated, one-year before deregulation of the American passenger airline industry. One of the main beneficiaries of deregulation south of the border was an ambitious commuter cargo airline called Federal Express, which until 1977 was restricted to operating Dassault Falcon 20s (with a 7,500-pound freight capacity) on its overnight network. 

Not surprisingly, deregulation of the U.S. airline industry forced Ottawa to follow suit with Canadian airline deregulation in 1987.

Today, the Canadian air cargo industry is comprised of three distinct domestic cargo networks, utilizing hundreds of passenger aircraft, about 120 all-freight aircraft, and about 30 combi jets and turboprops. The first air cargo network coincides with scheduled passenger service, with freight travelling in the bellies of passenger aircraft.

The second network operates dedicated cargo aircraft on local, east-west and international routes, all timed to serve express shippers.

The third air cargo network provides a lifeline to remote communities and mining sites, utilizing passenger, cargo and combi aircraft to fly fresh food and supplies into the North.

Every airliner flying passengers in Canada is also carrying cargo in its baggage compartment.

This includes Canadian airlines, but also those from some 40 countries, including the U.S., that touch down at Canadian airports weekly.

Air Canada operates Canada’s largest domestic and international network. Since 2007, all the cargo it flies has been transported on passenger aircraft.

The airline serves 178 direct destinations – 59 in Canada, 56 in the U.S. and 63 internationally – with its fleet of 205 passenger jets and 158 regional jets and turboprops flown by five partners.

Air Canada Cargo had revenues of $481 million in 2011. Domestic revenues totalled $66 million; trans-border revenues $17 million; trans-Atlantic $194 million; trans-Pacific $146 million; and other regions, $58 million.

Trans-Atlantic revenues were up 18 per cent in 2011, but trans-Pacific revenues were down 11 per cent, partially due to the impact of the Japanese earthquake and its aftermath on trade.

The delivery of six Boeing 777-200s and 12 777-300s starting in 2007 greatly increased Air Canada’s cargo capacity. Five more Boeing 777s have been ordered, and the first of 37 Boeing 787s is set to arrive in 2014. WestJet flies a growing fleet of about 100 Boeing 737-600/700/800 jets throughout North America and the Caribbean. In 2011, the airline flew 5,351 tonnes of cargo, a 3.3 per cent increase over the previous year.

Time sensitive documents and packages are the cargo equivalent of business class passengers, producing the highest yield cargo.

Since 2004, the amount of domestic air freight moving on all-cargo aircraft has grown significantly, with 57 per cent of air cargo flying on dedicated freighters in 2009, compared to 21 per cent in 1999, reported Transport Canada.

The shift is probably part of a worldwide trend noted by Boeing, which estimates that 60 per cent of all air cargo is now carried on dedicated freighters.

Monthly utilization for a cargo jet in Canada is about 100hours a month, which favours the business case for older freighters with lower capital costs. Newer, more fuel-efficient aircraft come with higher lease rates and need to be flown more to make financial sense.

Kelowna Flightcraft Air Charter (KF) is Canada’s largest cargo airline. On behalf of Purolator Courier and its parent company, Canada Post, it operates 23 aircraft nightly to 12 destinations. The association goes back to 1976, when KF started flying Purolator envelopes in an Aero Commander 680.

Today, it operates one stretched Convair 5800, three Convair 580s, and 10 Boeing 727-200s for Purolator, with two McDonnell Douglas DC-10-30s flying for Canada Post, and more aircraft held in reserve. The fleet has a 99.3 per cent on time dispatch rate.

We’re a dedicated charter carrier, explained Grant Stevens, Kelowna Flightcraft’s HR director and spokesperson. We provide aircraft to serve the needs of our two customers and also provide airport ground handling services.

In 2011, Purolator had revenues of $1.6 billion. Kelowna flies up to 900,000 pounds of cargo per night, with Purolator accounting for 400,000 pounds of air freight per night, and 100 million pounds per year.

KF’s Boeing 727-200 fleet is based in Vancouver, Calgary, Saskatoon, Hamilton, Mirabel and St. John’s, and flies east-west routes.

One Convair 580 flies nightly between Vancouver, Kamloops and Prince George, B.C., and another between Winnipeg and Thunder Bay, Ont. The stretched CV5800, with a 22,000-pound capacity, flies between Vancouver and Kelowna.

In May 2008, Canada Post announced it was shifting its domestic air cargo from passenger aircraft to Kelowna Flightcraft DC-10-30 freighters with a 154,000-pound capacity. Four and a half months later, DC-10 service began on Sept. 15, 2008. One aircraft flies a nightly round trip loop between Hamilton and Vancouver, with stops in Winnipeg and Calgary on the westbound leg only. The availability of a second DC-10-30 ensures high dispatch reliability.

Cargojet flies 12 cargo aircraft on domestic, trans-border and international cargo routes.

The Hamilton, Ont.-based airline posted revenues of $165 million in 2011, when it flew an average of 750,000 pounds of cargo per night.

In August 2001, Ajay Virmani purchased 50 per cent of Canada 3000 Cargo, three months before the travel slowdown caused by the 9/11 terrorist attacks caused partner airline Canada 3000 to collapse.

Re-launched as Cargojet in early 2002, the cargo airline flies nine Boeing 727-200 freighters. In the summer of 2008, Cargojet renewed its fleet by adding two leased Boeing 767-200s and a Boeing 757-200.

Compared to the 727-200, Cargojet says the 757-200 carries 30 per cent more payload and burns 13 per cent less fuel; with the 767-200 carrying 69 per cent more payload for a 13 per cent increase in fuel per block hour.

The 727s fly nightly transcontinental runs serving cities between St. John’s and Vancouver, with the 757 and 767 used when their capacity is required.

A Cargojet 727 also flies five days a week between Newark, NJ, and Bermuda in the mid-Atlantic, and another 727 flies between Mirabel, Que., and the DHL hub in north Kentucky.

In November 2009, Cargojet began a contract with LOT Polish Airlines, flying a Boeing 767 weekly between Hamilton and Katowice, Poland, and also flying between Chicago, Ill., and Warsaw, Poland. A 767 also links Halifax with Brussels, Belgium, and Cologne-Bonn, Germany.

Federal Express first set up ground courier service in Canada in 1981, using a Canadian licensee. Aircraft were chartered to move courier packages, and then Brooker Wheaton Aviation of Edmonton won a contract with FedEx Canada in 1990, to fly Boeing 727-100 freighters across the country. In 1992, Cessna Caravans were introduced to replace Fairchild Metros on feeder routes. Morningstar Air Express was born in 1992, when the airline changed owners.

In mid-2010, Morningstar introduced the first of five Boeing 757-200s to replace its five Boeing 727-200s. Morningstar also flies six Caravans and an ATR 42 for FedEx Canada. One hundred and sixty-two domestic FedEx Canada flights are flown each week, with the 757s flying east-west between Halifax and Vancouver.

Many of FedEx’s domestic and international packages are processed at its $45 million, 342,000-square-foot sorting facility at Toronto’s Pearson International airport. FedEx’s own aircraft (Boeing 757, Airbus A300, McDonnell Douglas DC-10 and MD-11 freighters) make about 104 transborder flights every week.

A small number of charter airlines fly nightly cargo flights that feed into cargo hubs in Halifax, Toronto, Hamilton, Calgary and Vancouver. These airlines utilize a mixed fleet of Cessna Caravans, Piper PA-31 Navajos, Fairchild Metros and Beech 1900Cs.

More than two dozen airlines are actively transporting cargo into remote northern communities and mining sites. (For Yellowknife, the opening of the 1.1 kilometre Deh Cho Bridge across the Mackenzie River on Nov. 30, 2012, effectively eliminates the need to airlift food into the city during the river’s freeze-up and break-up periods, when ferries and trucks could not be used in the past.)

Many northern cargo aircraft are bulk loaded, a concept now understood by the millions of viewers of Ice Pilots NWT, the reality TV show featuring Buffalo Airways. One of the biggest challenges is that northbound flights usually depart with more cargo than passengers, and southbound flights usually carry only passengers. That’s why combi aircraft are preferred over pure passenger or cargo aircraft.

On April 1, 2011, the federal government replaced the Canada Post Food Mail program with a new program called Nutrition North Canada, which provides subsidies directly to northern retailers and southern suppliers who ship nutritious food to the North.

Nutrition North provided $54.1 million in subsidy during its first year of operations, supporting the air transport of 26 million kilograms of nutritious perishable and non-perishable food to more than 100 remote communities.

The previous Canada Post Food Mail program provided $250 million in subsidies to airlines on five-year contracts, making it one of the largest and most bitterly contested federal government contracts awarded in the North. 

Canadian North was founded as a subsidiary of Canadian Airlines in 1989, and purchased in 1998 by Norterra, which is jointly owned by the Inuvialuit people of the western Canadian Arctic, and the Inuit people of Nunavut.

Today, the airline flies four Dash 8-100s, five Boeing 737-200C combi aircraft, and five passenger jets (three 737-200s and four 737-300s). 

Elimination of the former food mail program by the federal government and the establishment of the Government of Canada’s Nutrition North program has allowed opportunities for Canadian North to work directly with the retailers in the communities and provide a viable competitive option, said Tracy Medve, president of Canadian North.

In 2007, Canadian North expanded eastward to serve four communities in the Kitikmeot region, and in 2008 began serving seven communities in the Qikiqtaaluk Region (Baffin Region). Cargo capacity has increased with the introduction of re-configurable Dash 8-100s.

The addition of the Dash 8 combi has allowed us to increase our network into smaller northern communities that we previously served with our Boeing 737 combi fleet. We have expanded into markets with existing cargo service and have been able to provide an additional competitive option, said Medve.

The nature of our combi aircraft allow us to provide flexibility and a mix of passengers and cargo to our existing charter clients, she concluded. 

Makivik Corp., owned by the Inuit of Nunavik (northern Quebec) owns Air Inuit and First Air. 

Air Inuit is the largest airline serving Nunavik. Its fleet includes two Boeing 737-200C combis, four Hawker Siddeley HS748 combis, two de Havilland Dash 8-100s, eight Dash 8-300s and eight de Havilland Twin Otters. It also flies Hydro Quebec’s fleet of Dash 8s and Q400s.

The two Boeing 737-200 combi aircraft were introduced in 2007 and 2010. They fly between Montreal, LaGrande Rivière, Que., and Puvirnituq, Que., where cargo is transferred to smaller aircraft for distribution along the Hudson Bay Coast. The 737s were introduced after improvements were made to Puvirnituq airport.

First Air is the largest passenger and cargo carrier operating in the NWT and Nunavut. It serves 30 destinations in Nunavik, Nunavut and the NWT. Three of those communities are served with year-round roads, two are served with winter roads, and 25 have no road access whatsoever.

The First Air fleet includes one Boeing 767F and two Lockheed L382 Hercules freighters, 13 combi aircraft (three Boeing 737-200C, nine ATR 42-300s, and one ATR 72) and four Boeing 737-200 passenger aircraft. The ATRs are flown as combis 90 per cent of the time. A second ATR 72 combi with a large freight door entered service in December.

A 767-200 freighter was introduced in mid-2009 to reduce the cost of freight to Iqaluit, Nunavut, and Kuujjuaq, Que., which both saw an increased volume of goods travelling, as a result of 737-200C aircraft becoming more scarce, said a First Air spokesperson.

First Air operates from four main southern bases – Ottawa, Montreal, Winnipeg, and Edmonton – with jet service to Iqaluit, Rankin Inlet, Nunavut, and Yellowknife, N.W.T., where its turboprop fleet is based.

About 70 per cent of First Air’s cargo movements meets the day-to-day needs of northern communities, and about 30 per cent supports industry clients.

Two Lockheed Hercules fly fresh supplies and time sensitive equipment to N.W.T. diamond mines on a daily schedule, support exploration camps, and haul fuel to remote military sites. These aircraft are the only two civilian-owned and -operated Hercules aircraft in Canada.

Provincial Airlines (PAL) of St. John’s, N.L., has seen cargo volumes double on routes to Labrador and Eastern Quebec in the past three to four years, as a result of new mining developments.

We offer one-stop shopping when it comes to cargo movements, said Trevor Casell, director of operations. In addition to our aircraft, we have a ground cargo operation with vehicles that can do pickups and deliveries in many communities such as Goose Bay and Wabush.

Scheduled services are provided in three Saab 340Bs, three Dash 8-100s and two Dash 8-300s.

The Dash 8-100s are flown as combi aircraft, utilizing a movable bulkhead to change the passenger/cargo mix. Northbound flights are consistently full, so PAL uses a Fairchild Metro freighter to carry the additional cargo. The airline also expects its passenger and cargo loads to increase with the Nov. 30, 2012, announcement that the federal government is guaranteeing the loans for the $7.4 billion Muskrat Falls hydro-electric project on the Lower Churchill River in Labrador.

In addition to moving its own freight, PAL carries packages for Canada Post, Purolator, FedEx, UPS, Cargojet and freight forwarders through its network.

Innu Mikun Airlines, a joint venture with the Innu peoples of Nitassinan, Labrador, flies DHC-6 Twin Otters from a base in Goose Bay to remote communities on the Labrador coast, including the Voisey’s Bay mine. 

The Canadian air cargo industry operates in a diverse landscape of multiple operators and aircraft types. Air cargo service in this country is a necessity, not a luxury. Operators bring fresh, nutritious food to the North, and move urgent packages and other goods along the east-west corridor from St. John’s, N.L., to Victoria, B.C. From its earliest days, there’s no doubt that air cargo has played a starring role in the story of Canadian aviation.