Air Transport Services Group, Inc. (NASDAQ:ATSG) today announced that its Cargo Aircraft Management, Inc. subsidiary has agreed to purchase two Boeing 767-300ER aircraft from Air Canada of Montreal, convert them from passenger to freighter configuration, and lease them back to Air Canada. This is the first sale-leaseback agreement between ATSG and Air Canada.
The first aircraft will be inducted for conversion in March 2021. Both are expected to be redelivered to Air Canada by the end of 2021.
In November 2020, Air Canada announced the next steps in its strategic plan to use converted freighters to grow its cargo business across the global supply chain in response to evolving opportunities in the air freight market.
“Getting these two 767 freighters into our operation in 2021 is aligned with our announcement in November,” said Jason Berry, vice-president of cargo at Air Canada. “We are excited to be in a position to capture the market opportunities that currently present themselves. Delivering on our commitments is critically important to all of us at Air Canada.”
ATSG has substantial experience in managing the passenger-to-freighter conversion process, which requires extensive engineering modifications such as reinforcing the floor beams to support heavy cargo, installing a main-deck cargo door, and installing a rigid metal barrier behind the cockpit to protect against sliding loads. The aircraft will be converted by Israel Aerospace Industries (IAI) of Tel Aviv, Israel.
“It is always a great feeling to gain a new lease customer, and we are proud to be able to again support a great airline like Air Canada,” said Mike Berger, chief commercial officer of ATSG. “We are looking forward to delivering these airplanes and extending our special partnership with Air Canada. We continue to see growth outside of the United States, and ATSG continues to enable great companies to take advantage of growing global e-commerce and mobile-commerce trends.”