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briboy
Topic Author
Posts: 268
Joined: Fri Jul 27, 2001 1:47 am

Changes To The Air Cargo Market In Canada

Wed Feb 19, 2014 1:30 pm

Big changes actually. Kelowna Flightcraft has lost the Purolator / Canada Post contract to Canjet.

Expect a major divesture of K.F. aircraft (mostly 727's and a couple DC-10F) and an uptake of fleet by Cargojet.

http://www.newswire.ca/en/story/1308...ir-cargo-network-services-contract

"Cargojet will provide comprehensive Canada-wide air cargo services for the Group of Companies, including Purolator's national air cargo network. Cargojet's domestic overnight network will be expanded and enhanced significantly to handle the additional volumes and provide a virtual dedicated Air Cargo Network to the Canada Post Group of Companies."

[Edited 2014-02-19 06:13:37]
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Steelhead
Posts: 283
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RE: Changes To The Air Cargo Market In Canada

Wed Feb 19, 2014 1:50 pm

Please change - it's not CanJet - it's CargoJet getting the Purolator contract!
 
briboy
Topic Author
Posts: 268
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RE: Changes To The Air Cargo Market In Canada

Wed Feb 19, 2014 2:14 pm

Edited. Correct, CargoJet.
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fly_yhm
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RE: Changes To The Air Cargo Market In Canada

Wed Feb 19, 2014 9:45 pm

This is huge for Cargojet and a massive slow for Kelowna Flightcraft. It would explain why Cargojet has be buying up 757
as of late. They had said it was to replace the 727 but this now makes even more sense. I wonder is this will mean of few additional aircraft even larger then the 757 or the 762s they have.
I wonder this only because if you look at existing flights specifically from YHM there is a lot of mail already filling a 762 or DC-10 for example there is a Cargojet 762 flight from YVR that arrives at
330am then a Kelowna Flightcraft DC-10 flight from YVR to YHM which arrives 530. we could assume that becomes
one single flight but then does that still fit into a 762. that's just one example.

I am not saying that Cargojet goes out and buys a 747 but perhaps something as large as an MD-11?

Also not sure if anyone here might know and answer to this but does Kelowna Flightcraft own the ramp behind the
Purolator sort facility or does Purolator or YHM Airport Authority?
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Steelhead
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RE: Changes To The Air Cargo Market In Canada

Thu Feb 20, 2014 1:59 pm

Additional information is, that the new contract will come into effect April 1th., 2015. Plenty of time for CargoJet to get ready and get additional planes. Acc. to my information the will have a total of 6 B-757's at the end of the year.
The 757/767 combination is perfect - same crews etc. They might need something smaller in the future, if all 727's will still go away. And may be a real nice feeder freighter like ATR-42 etc.

The whole makes a lot of sense - no more duplication of flights. But on the other side there might be no more competition
in the overnight cargo market (beside of FedEx/Morningstar). Perhaps someone else will give it a try.

The ramp at YHM is not owned by Kelowna Flightcraft - for sure the PUROLATOR facility will stay and I can see CargoJet
using the ramp behind. Question is, whether KF will stay at all at YHM with their maintenance hangar. They are doing some limited work for other airlines (CanJet) at the moment, but without the Purolator operation there is not much left.
Time will tell!
 
blueflyer
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RE: Changes To The Air Cargo Market In Canada

Thu Feb 20, 2014 3:21 pm

Quoting steelhead (Reply 4):
But on the other side there might be no more competition in the overnight cargo market

The market could evidently handle two competitors with Kelowna holding the Purolator contract. Why would it be any different now, or did CargoJet grab all the non-Purolator business already, leaving Kelowna with nothing to fall back on?
 
SpaceshipDC10
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RE: Changes To The Air Cargo Market In Canada

Thu Feb 20, 2014 4:04 pm

This is indeed quite a change. I guess this means the end of both the 727F and DC-10F in Canada, unless Kelowna finds a way to keep some busy through other ways.
 
Steelhead
Posts: 283
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RE: Changes To The Air Cargo Market In Canada

Thu Feb 20, 2014 5:38 pm

At the moment the situation is:
KF does Purolator
Morningstar does FedEx
CargoJet does UPS/DHL and all the other smaller independent companies.

After loosing Purolator there is nothing left for KF - I never see them doing any other charter work.

For sure that's the end for the DC-10's (only 2 active at the moment). Regarding the 727's it will depend how fast CargoJet can bring in more capacity.
 
rampbro
Posts: 551
Joined: Wed Nov 28, 2012 4:00 am

RE: Changes To The Air Cargo Market In Canada

Thu Feb 20, 2014 5:48 pm

OMFG does this mean we will get 757s at YYJ??

           
 
fly_yhm
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RE: Changes To The Air Cargo Market In Canada

Fri Feb 21, 2014 1:29 am

I was also wondering about KF at YHM. it would be sad to see them leave. they are one of the longest tenants at yhm.

I'm also going to have to make a point for getting out to yhm to try and grab lots of shots of those DC-10s on there 440pm departure.

I really hope this will open up greater opportunities for Cargo at YHM especially with the new cargo facility planned
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YVRLTN
Posts: 2348
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RE: Changes To The Air Cargo Market In Canada

Sat Feb 22, 2014 5:01 am

Quoting steelhead (Reply 4):
And may be a real nice feeder freighter like ATR-42 etc.

Sadly the end of the road likely for their CV-580 too, so good to see two land 10 mins apart at YVR. Hopefully Conair or Nolinor will pick them up.

Quoting steelhead (Reply 7):
Regarding the 727's it will depend how fast CargoJet can bring in more capacity.

They will need them short term so can see some anyway going over, unless of course the 757 acquisition was for this as suggested.

Quoting fly_yhm (Reply 3):
massive slow for Kelowna Flightcraft.

Understatement. I dont believe they have any other work for the 727, Convair & DC10 fleet. All they have left is Flair. This is a huge blow to the crews and I am sure there will be a lot of people out of work, both crew, mx and in the office. Those crews who can transition over to CJT will probably get a real raw deal as they lose seniority and after all, this had to be all about the $$$ and CJT low balling as usual, life will not be so good for them after working hard to get to where they are.

Quoting steelhead (Reply 4):
The ramp at YHM is not owned by Kelowna Flightcraft - for sure the PUROLATOR facility will stay and I can see CargoJet
using the ramp behind

How about YVR? They have quite a sizeable chunk of ramp and the CJT ramp is not connected (AC & Jazz in between).

Quoting steelhead (Reply 4):
Question is, whether KF will stay at all at YHM with their maintenance hangar

There wont be any reason for them to be in YHM or the east at all unless they pick up some new work or go it alone as an independent like CJT   I can see them retreating to YLW.

Quoting rampbro (Reply 8):
OMFG does this mean we will get 757s at YYJ??

Surely you are not more excited to see (and hear) a 757 than a 727?!    I know its always cool to get a new type, but please have a think for all those probable unemployed KFC folks before you post too many more spinning smilies  
Quoting SpaceshipDC10 (Reply 6):
unless Kelowna finds a way to keep some busy through other ways.
Quoting steelhead (Reply 4):
But on the other side there might be no more competition
in the overnight cargo market

I wonder if KFC have enough time to refocus and start up a small standalone competition to CJT on trunk routes. Many feel the CJT service sucks and it will only get worse with no competition. If they can make a name for themselves for good customer service and reliability they could win some business. The 727 is actually a pretty ideal aircraft for keeping costs down due to the fact they are so depreciated more than balancing out their higher running costs due to the low utilization rate and I understand the dispatch reliability is still to this day greater than far newer narrowbodies.
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jjsilver
Posts: 26
Joined: Thu Aug 04, 2011 12:13 am

RE: Changes To The Air Cargo Market In Canada

Sat Feb 22, 2014 5:28 am

As a cargo jet customer this worries me. KFC has a lot of lift and unless cargo jet really ramps up capacity they will be unable to handle the current long term customers.

If KFC can hang on for several months after the transition they should be able to set up a standalone and essentially switch places with cargo jet. Shippers who are competing with purolator and canada post will be very open to flying on an independent.

Part of me wonders if KFC may have not bid this aggressively as they have a lot of older aircraft and knew they needed to replace them during the next term of the contract. The contract rates may not afford them that option and if they knew a competitor would bid aggressively that would leave a hole in the market they could fill.

On the flip side maybe cargo jet is planning to run additional frequencies and offer their customers even more options. Increase the utilization of the current fleet.

I see a lot of possibilities.

I will def miss the DC 10 flying over my head every day just before 6 pm into YWG.
 
User avatar
yyz717
Posts: 15778
Joined: Mon Sep 10, 2001 12:26 pm

RE: Changes To The Air Cargo Market In Canada

Sun Feb 23, 2014 8:05 pm

Quoting fly_yhm (Reply 3):
This is huge for Cargojet and a massive slow for Kelowna Flightcraft.

Agreed. This is big. This is surprising as the relationship between KFC and Purolator was very tight: the owner of KFC was also the 2nd largest shareholder of Purolator 7%, after CPC's 91%. Sounds like the CJT bid was lower AND KFC was unable to match it AND perhaps a strategic relationship breakdown between Puro and KFC. I wonder if Barry LaPointe (owner KFC) will maintain his 7% share in CPC?

Quoting steelhead (Reply 4):
Acc. to my information the will have a total of 6 B-757's at the end of the year.

I thought this was all to replace the existing CJT fleet of 10 722's? It does sound like the D10F and 722F fleet of KFC will be retired though. Perhaps ALL 722F ops in Canada will be gone in 2-3 years now.

On another note, the CJT stock jumped up to $18 this week! I looked at this stock last fall when it traded at $8 (plus qtrly dividend). Stockholders have done well, although the divident yield has just dropped by half and they may need to cut the dividend to fund new aircraft purchases.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
rampbro
Posts: 551
Joined: Wed Nov 28, 2012 4:00 am

RE: Changes To The Air Cargo Market In Canada

Mon Feb 24, 2014 8:15 pm

Quoting YVRLTN (Reply 10):
Surely you are not more excited to see (and hear) a 757 than a 727?! I know its always cool to get a new type, but please have a think for all those probable unemployed KFC folks before you post too many more spinning smilies

Folks I know lost their jobs at YYJ when KFC changed their ground handler. It works both ways.

And yes, while I will probably miss the noise and smoke of the 727, nothing compares to the grace and poise of the 757.
 
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yyz717
Posts: 15778
Joined: Mon Sep 10, 2001 12:26 pm

RE: Changes To The Air Cargo Market In Canada

Tue Feb 25, 2014 6:16 pm

aerotransport.org is reporting 2 recent changes to the KFC fleet:
1. One of the long reported to-be-acquired DC-10-30F acquisitions (MSN 196) has now been cancelled. Another D10F MSN 166 remains noted as "to be acquired" but presumably this will not proceed. They are still reporting 4 D10's in service (C-GKFA/B/D/T) but it has been reported on this forum that 2 of these have not flown recently and are in storage at YHM.
2. Kelowna has acquired a pax 733 C-GOKF which is currently in storage. Last operator PrecisionAir. No indication if it will be converted to cargo.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
cyeg66
Posts: 179
Joined: Sat Feb 19, 2011 4:33 pm

RE: Changes To The Air Cargo Market In Canada

Tue Feb 25, 2014 7:03 pm

Quoting rampbro (Reply 13):

And yes, while I will probably miss the noise and smoke of the 727, nothing compares to the grace and poise of the 757.

IMO, the 727 is much more graceful than the 767's special needs little brother. The '57 looks muscular but in terms of looks, is kinda fugly. The 727 whisper jet (lol), on the other hand, squat, sleek, with its high T-tail, looks like it's cruising at M.82 while sitting on the ramp. I'll also miss my gratis 5 am wake-up call. It saved me a few times when I forgot to set the alarm.  
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doug_or
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Joined: Sat Mar 18, 2000 9:55 am

RE: Changes To The Air Cargo Market In Canada

Wed Feb 26, 2014 5:43 am

OK, I'm sorry, but is this the same Purolator that makes oil filters? Seems like a really weird diversification.
When in doubt, one B pump off
 
blueflyer
Posts: 4352
Joined: Tue Jan 31, 2006 4:17 am

RE: Changes To The Air Cargo Market In Canada

Wed Feb 26, 2014 7:04 am

Quoting doug_Or (Reply 16):
OK, I'm sorry, but is this the same Purolator that makes oil filters? Seems like a really weird diversification.

For about 20 years, it was strangely enough, but then the two activities were split, each keeping the original Purolator name though. Nowadays, Canada's Purolator is majority-owned by Canada Post and has nothing, other than the name, in common with Mann Hummel's Purolator Filters.

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