Cargojet Enters into a Partnership with SkyLink Express to extend its Regional Brand
July 17, 2009
Cargojet Income Fund (the "Fund") (TSX: CJT.UN), Canada's leading domestic premium overnight air cargo network operator, announced today that it has entered into a partnership with SkyLink Express Inc. ("SL Express") to combine their regional air cargo feeder aircraft network. The new partnership will operate under the trade name "Cargojet Regional" (the "Partnership") and will be owned 55% by Cargojet's subsidiary Prince Edward Air Ltd. ("PEAL") and 45% by SL Express. Consideration for Cargojet's interest in the Partnership includes the transfer of Cargojet's existing regional contracts valued at $3.9 million.
Cargojet launched its own regional business in October 2007 to extend the reach and coverage of its national cargo network. In May 2008, Cargojet acquired a controlling interest in PEAL, a privately owned regional operator of cargo aircraft based in Atlantic Canada. The new partnership between PEAL and SL Express will create a regional business with annual combined revenues of over $26 million. Cargojet Regional will operate twenty-eight aircraft and employ over 160 people primarily in Central and Atlantic Canada.
"This partnership is part of Cargojet's strategic plan to expand its regional air cargo business. This transaction is the logical next step in Cargojet's investment and growth in the regional air cargo business in Canada. Cargojet Regional will give us a stable platform to continue our growth into secondary markets across Canada. We are very excited and enthusiastic about the opportunities that the Cargojet Regional brand will provide for our customers, our employees and our unitholders as we continue to grow this business well into the future," said Ajay Virmani, President and CEO of Cargojet. Cargojet is Canada's leading provider of time sensitive overnight air cargo services. Cargojet operates its network across North America, transporting over 750,000 pounds of time sensitive air cargo each business night, utilizing a fleet of forty-one all cargo aircraft.