Inuit-owned Arctic airline signs 10-year freight deal with Cargojet

Cargojet will carry freight to Iqaluit and other northern centres for another 10 years, thanks to a deal with First Air that extends to 2025. (FILE PHOTO)

First Air, a major air carrier in Nunavut, Nunavik and the Northwest Territories, has turned its recent short-time hookup with Cargojet into a 10-year marriage, the two companies announced June 30.

The two air carriers announced they’ve signed a commercial co-operation agreement that will keep them together until 2025.

Cash-strapped First Air, owned by Nunavik’s Makivik Corp. has been rejigging its northern operations ever since a potential merger deal with Canadian North fell through in October 2014.

Company officials now say the Cargojet agreement offers First Air a chance to achieve profitability in cargo operations and better serve its customers.

“Our goal with this agreement is two-fold. It is intended to create financially viable cargo operations in the North and to expedite service to our customers,” First Air CEO Brock Friesen said in a news release.

Cargojet is big national air freight carrier with facilities in 14 Canadian cities, as well as Bermuda and Newark, N.J.

The company’s shares, which trade on the Toronto Stock Exchange, rose by $1.20 to $27.80 by the close of trading June 30, for a 4.5 per cent one-day gain.

First Air initially teamed up with Cargojet in June 2014, when First Air turned over the remaining portion of its lease on a Boeing 767-200 freighter to Cargojet.

Cargojet still uses that aircraft to ship freight from Winnipeg to Iqaluit for clients like the North West Co.

First Air has also unloaded its two C-130 Hercules aircraft, which at one time were the only privately-owned commercial Herks in Canada.

In 2013, Arctic Co-ops Ltd. had made its own deal with Cargojet to ship freight out of Winnipeg in partnership with Canadian North and Calm Air.

Cargojet says its deal with First Air now gives them access to all of Canada.

“We are excited to expand service to the entire Canadian domestic market, including key communities in Northern Canada,” Ajay K. Virmani, the president and CEO of Cargojet, said in the news release.