Cargojet Inc.

Hello and welcome to CargoJet conference call third quarter 2022. My name is Priscilla and I'll be your coordinator for today's event. Please note this call is being recorded and your lines will be on listen only. However, you will have the opportunity to ask questions at the end during the Q&A session. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand over you to your host, Ms. Pauline Dillon, to begin today's conference. Thank you.

Good morning, everyone, and thank you for joining us on this call today. Our apologies for the slight delay. The service provider was having a few technical issues. With me on the call today are A.J. Vermani, our President and Chief Executive Officer, Jamie Porteus, our Chief Strategy Officer, Scott Calver, our Chief Financial Officer, and Sanjeev Mani, our Vice President of Finance. After opening remarks about the corridor, we will open the call for questions. I would like to point out that certain statements made on this call, such as those relating to our forecasted revenues, costs, and strategic plans, are forward-looking within the meaning of the applicable securities laws. This call also includes references to non-GAAP measures, like adjusted EBITDA and adjusted earnings per share and return on invested capital. Please refer to our most recent press release and MD&A for important assumptions and cautionary statements relating to forward-looking information. and for reconciliations of gap and measures to gap income. I will turn the call over to A.J. Vermani.

A.J. Thank you, Pauline. Good morning, everyone, and thank you for joining us this morning for the third quarter earnings call. I'd like to thank all those who attended our inaugural investor day on September 27th. One of the objectives of this event was to showcase the passion for the entire CargoJet team. we were successful in demonstrating our culture, our leadership team, and how our various functions come together each business day, each business night, to deliver excellence to our customers. Despite the risks and volatility expressed in the business news, Cargadget continues to demonstrate growth of revenue, our ability to manage costs, and the continued high level of customer service as measured by our industry-leading on-time performance. Forkajet has lived through two down cycles. We lived preparing for a downside scenario back in January 2021 when we strengthened our balance sheet with the $365 million equity issue. And it was not just the balance sheet. We also focused on strengthening our business model. We diversified our business model with a significant expansion of our ACMI and CMI business that is underwritten by strong customer contracts that provide certainty revenue with incentives for additional growth. We have a strong balance with several risk mitigation opportunities to manage revenue, operating costs, and capital expenditures. An example of how we manage our CapEx would be the most recent decision to exercise an option to defer the last of our Boeing 777 that was planned for 2026 and until most likely 2027. If things change over the next 12 to 18 months, we believe that CargoJet will still be in a position to acquire the 8777 as originally planned in late 2026. CargoJet is not immune to softness in consumer spending should a recessionary scenario become real. However, it is worth noting that Cargadget has evolved its business model that is increasingly based on strategic partnership with its customers. By aligning our long-term commercial interests, we expect a greater stickiness of volumes with our strategic customers, even if global volumes soften during the recessionary period. Therefore, we remain cautiously optimistic that the strength of our business model would allow us to manage the volatility better. One of the concerns that we often hear is what happens to air cargo when the passenger aircraft belly capacity returns to pre-COVID levels. Concerns that shippers will revert to usually using belly space as opposed to dedicated air freighters. Recent data in the U.S. shows that TSA checkpoint numbers are approximately 5% of pre-pandemic levels. European flights are within approximately 10% of the pre-pandemic levels. As I explained at our investor day, there are many more factors that will determine the utilization of belly space than simple return of flights. Many airlines are bringing narrow-body aircraft instead of cargo-friendly wide bodies. The route's predictability and the speed of service all play a role in decision-making. Therefore, despite the capacity created by the return of the belly space in passenger aircraft, shippers continue to move their freight in the dedicated air cargo freighters because they can depend on the service. We are pleased to report that in third quarter, cargo jets domestic revenue increased 21% compared to previous years, and our ACMI revenue increased by 47% compared to last year. We remain confident in our business model and the ability of our leadership team to continue to navigate expected volatile times, and we remain squarely focused on our long-term strategy. I will now pass on the call to our CFO, Scott Calver, for an update on the business.