Cargojet Inc (TSX: CJT) reported second-quarter fiscal 2026 revenue of $275.8 million and adjusted EBITDA of $87.3 million. The airline generated free cash flow of $56.2 million, reversing a prior-year outflow.

Financial Performance

Revenue excluding fuel surcharges rose 5% year over year to $250.1 million. Adjusted EBITDA margin stood at 31.7%, with management noting a 260 basis point compression due to fuel price increases. The leverage ratio fell to 2.6 times at quarter end.

Segment Highlights

The domestic overnight network generated $104.9 million in revenue net of fuel pass-throughs, a 3% year-over-year increase. Charter business revenue surged 37% to $54.7 million, driven by Liege-Tel Aviv services and UPS support flying. Hybrid ACMI revenue declined 12% year over year to $54.7 million as route transitions continued.

What the Numbers Show

Free cash flow generation improved significantly, swinging from a $72.5 million outflow in the prior year period to a $56.2 million inflow. This operational cash efficiency directly supported deleveraging efforts, reducing the leverage ratio to 2.6 times and enabling share repurchases of 121,390 units during the quarter.

Operational Updates

Cargojet finalized a five-year pilot agreement effective July 1, 2026, featuring a 26% wage increase and productivity improvements moving baseline workdays from 15 to 16 per month. Management indicated plans to pass these costs through to customers as contracts renew. The company maintained an on-time performance rate of 99.2%.

Cargojet Inc. announced the launch of a new Wednesday air cargo service to Liège, Belgium, beginning September 23, 2026. The addition increases capacity on its Canada-Europe route.

The new frequency builds on the company's existing weekend operations. It aims to provide greater flexibility for customers shipping between North America and Central or Western Europe.

Route Details

The service will operate using a Boeing 767 freighter. The flight path connects Hamilton (YHM) in Ontario with Halifax (YHZ) in Nova Scotia before reaching Liège (LGG). The aircraft returns directly from Liège to Hamilton.

This schedule complements Cargojet's current weekend flights. It integrates with the carrier's domestic overnight network across Canada. Customers gain access to expanded connectivity through international operations.

Strategic Context

Pauline Dhillon, Chief Executive Officer of Cargojet, stated that growing demand drove the expansion. She noted that customers sought a more seamless solution connecting Canada, Europe, and other regions.

The move advances Cargojet's One Network strategy. This approach links domestic overnight services with ACMI and charter operations. The company operates a fleet of 42 aircraft and carries over 25,000,000 pounds of cargo weekly.