WestJet has abandoned its scheduled freighter operation and put two of four Boeing 737-800 aircraft in storage one year after launching the business venture, according to the executive in charge of the airline’s cargo operations.
The development is a tacit acknowledgement by WestJet that it can’t compete in the challenging Canadian cargo market. Air Canada last week disclosed it has parked two new factory-built 767-300 freighter aircraft because of insufficient demand.
Two 737-800 converted freighters are in long-term storage, and the other two are operating daily charter service for Cargojet between Newark International Airport in New Jersey and Bermuda, said Kristen de Bruijn, WestJet’s executive vice president of cargo, in an email message.
Cargojet, Canada’s largest all-cargo airline, previously provided Bermuda charter service for several customers with a Boeing 757 freighter. WestJet is now leasing Cargojet the smaller 737-800 cargo aircraft and providing the crew to operate the route.
Cargojet is allowed to operate from the U.S. to Bermuda because it has authority to operate from Bermuda’s civil aviation regulator, which negotiated the route with the U.S. Department of Transportation.
The aircraft are based in Newark and periodically return to Toronto for scheduled maintenance. WestJet sells space for the Newark-Toronto leg based on demand, de Bruijn explained. It also operates scheduled service from Toronto to Havana every other week, based on demand.
The two aircraft are parked at Halifax Stanfield International Airport in Nova Scotia, according to WestJet’s cargo chief. FlightAware, a site that tracks aircraft movements, shows the freighters have been out of service since February and March.
“WestJet has adjusted its air cargo strategy in response to market conditions. It was determined that the freighters would be better optimized for charters, partnerships, and operating specific routes on an ad hoc basis,” de Bruijn told FreightWaves. “Consequently, we have shifted away from regular network flying with the 737-800 converted freighter between Canadian and U.S. cities.”
Canada’s second-largest passenger airline has also suspended its contract flying for Mexico-based startup airline Awesome Cargo. Under the arrangement that began in December, WestJet freighters carried two-way traffic between Los Angeles and Awesome’s terminal outside Mexico City where it could be transferred to and from A330 freighters operating across Latin America. Awesome Cargo remains WestJet’s U.S. general sales agent, marketing export capacity on WestJet passenger aircraft, primarily out of Los Angeles, according to de Bruijn.
WestJet Cargo has not reduced or reassigned staff because of the strategic shift and is striving to generate new opportunities, she added.
The airline leases the 737-800 freighters from BBAM Aircraft Leasing and Management. De Bruijn said a permanent decision about what to do with the aircraft has not been made.
WestJet Cargo will evaluate these options based on market conditions and strategic priorities to determine the most effective path forward for our freighters. Decisions on whether to sell or transition to an ACMI operation will be made accordingly,” she said.
Changing cargo strategy
WestJet introduced commercial freighter operations with a single aircraft in April 2023 after a 10-month delay getting approval from Transport Canada for the structural modifications required to convert the used 737-800s into all-cargo aircraft. WestJet didn’t have all four cargo jets operating until September 2023.
The initial network consisted of daily routes between Toronto and Miami, and Vancouver, British Columbia, and Los Angeles, with intra-Canada connections to Calgary, Alberta, and Halifax. Later, WestJet mixed in three flights per week between Los Angeles and Guadalajara, Mexico, and between Los Angeles and Calgary.
The investment in four long-term leases for 737-800 passenger-to-freighter aircraft and the hiring of de Bruijn from Qatar Airways to build up the cargo business gives an idea of how seriously WestJet took the idea of becoming a significant player in airfreight. Operating all-cargo jets involves different processes than moving cargo in the lower deck of passenger aircraft. Other startup costs included developing training manuals, equipment and capabilities, recruiting air cargo managers from other airlines and incorporating IT systems to become a full cargo organization.
WestJet’s freighter division opened for business just as the airfreight market rapidly cooled from the hot demand during the COVID crisis and fell into a prolonged recession.
WestJet’s strategy was for high-frequency shuttles in a tight network serving freight forwarders and other businesses. The company determined that the air cargo market in Canada was underserved and that it could fit a niche between overnight express delivery and international long-haul service. Booming e-commerce demand during the pandemic influenced the decision to start a stand-alone freighter operation.
Air cargo experts and WestJet critics, speaking on condition of anonymity so as not to jeopardize business opportunities, say WestJet Cargo had a difficult business case. Boeing 737-800 freighters are best suited for express delivery and postal services, or integrated logistics companies that use aircraft along with ground operations for time-definite delivery.
And WestJet faced the same problem as Air Canada’s new freighter operation: too much competition in a modest-size market. Cargojet is the dominant cargo carrier in Canada with 41 freighters doing domestic express delivery, contract flying for other network carriers and cross-border charter service. Cargojet and Air Canada operate larger aircraft, such as the Boeing 767, that many consider better for regional air cargo operations than a 737-800.
De Bruijn in a November 2022 interview expressed confidence that there was plenty of cargo business for WestJet in the Canadian market despite the entrenched position of Cargojet and the rise of Air Canada Cargo.
“We see quite some demand. Canada is twice the size of the European Union. You need freighters [especially with] a lot of hiccups in the supply chain,” said de Bruijn. “And more widebody capacity that used to be positioned inter-Canada is now going international. So domestically you’re seeing a reduction in capacity because of that shift as the markets are opening again. That gives more room for business.”