WestJet halves cargo operation due to ‘market conditions’

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WestJet has halved its small fleet of cargo plans due to “market conditions,” the latest chapter in the Calgary-based airline’s brief foray into the cargo space.

The decision follows cutbacks by several airlines in the freighter business, with the easing of a pandemic-fuelled frenzy for air cargo driven at the time by heightened demand for goods and supply chain bottlenecks.

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In early 2024, WestJet decided to trim its four-aircraft cargo fleet to two “due to market conditions,” it said in a statement to Postmedia. No further cutbacks are planned. The news was first reported by FreightWaves.

WestJet initiated its entry into cargo transportation in 2022, converting four passenger jets into what the airline called Boeing Converted Freighters (BCFs). It is also continuing to transport cargo in the bellies of its passenger aircraft.

WestJet’s pivot into all-cargo operations was spurred by the remarkable downturn in passenger demand during the COVID-19 pandemic as travel ground to a halt — a period that also featured surging demand for goods and subsequent supply bottlenecks in ocean freight delivery. Early on, as airlines recognized the demand for cargo, some stacked boxed onto seats to fit goods into their planes.

“It was a worldwide phenomenon,” Barry Prentice, head of the University of Manitoba’s transport institute, said of the speed at which airlines got into the cargo business.

In April 2022, WestJet announced it had hired longtime cargo airline executive Kirsten de Bruijn to head up the airline’s cargo division. Her previous experience included senior roles with Qatar Airways’ and Emirates Sky Cargo’s cargo divisions.

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Pivot to cargo might have been too little, too late: expert

The shift into cargo was swift, according to a recent paper co-authored by Prentice and colleagues at the University of Manitoba, shown in a timeline that includes Air Canada’s decision in November 2020 to convert several of its planes over to cargo.

WestJet’s 2022 call to move into the space was perhaps too little, too late, Prentice said, partly because the pandemic had officially ended before it was able to clear the regulatory requirements to begin cargo operations. By May 2023, Air Canada’s cargo sales had sunk 40 per cent, FedEx opted to shut down 29 aircraft and Cargojet — one of Canada’s eminent air cargo companies — paused several conversions and sold off new freighters amid shrinking demand for air cargo.

But just as the shift into cargo was swift, the rebound of passenger air travel was equally quick, Prentice’s paper says, and profits in the air cargo sector “began to erode.”

“It was pretty inevitable that when the COVID problem ended, it was like musical chairs — people were standing around when the music stopped. That seems to be what happened, certainly for WetJet.”

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Air Canada, in its recent second-quarter earnings call, said two of its cargo aircraft have been grounded due to low demand.

In its statement to Postmedia, WestJet said the past two months “have been the best in WestJet Cargo’s history, with our strongest performance being on routes currently served by the cargo bellies in our passenger fleet.” The airline did not say which metrics it used to measure its success and did not immediately respond to follow-up questions.

Air cargo is known for its boom-bust cycles and for being an expensive business — particularly when freight rates are low, said John Gradek, aviation expert and lecturer at McGill University. But even while WestJet arrived at a difficult time, the Calgary airline wasn’t a lone actor in the rush to get into the business.

“I think they were really looking at this being a trend that would have long legs, and it just wasn’t there,” Gradek said.

He and Prentice both said it’s unlikely WestJet will consider reviving its cargo fleet should demand for the service surge again.

Prentice said he has doubts about the long-term viability of air cargo, particularly given the high costs associated with the business — even despite a looming railway strike in Canada.

“In North America, trucking works very well … there’s competitors to air cargo that are quite acceptable competitors,” he said. “You start crossing oceans, your choices are marine or air; one’s really cheap and slow and the other is really fast and really expensive.”

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