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Cargojet to provide air transportation services to DHL under long-term strategic partnership

DHL Network Operations (USA) has contracted Cargojet to provide air transportation services for a term of five years with a renewal option for an additional two years.

Under the agreement, Cargojet will provide ACMI, CMI, charter and aircraft dry lease services to support DHL’s international requirements for Europe and North, South, Central and Latin America, as well as Asia.

Cargojet utilises 12 freighters to service DHL’s current requirements. DHL intends to add five 767 freighters during the 2022-23 timeframe to fulfil anticipated network requirements. Additionally, DHL intends to be Cargojet’s launch customer for the 777 widebody long-range cargo aircraft, which is expected to be deployed in late 2023 or early 2024.

DHL Network Operations (USA) is an affiliate of Deutsche Post DHL Group.

“Earning the trust and confidence of Deutsche Post DHL Group is a remarkable milestone in Cargojet’s journey,” said Cargojet’s chief executive officer Dr. Ajay Virmani. “We are even more excited about the opportunity to add value and earn the right to be a long-term strategic partner each and every day. This strategic partnership is a real tribute to our people who have worked extremely hard all through the pandemic while maintaining the industry best on-time performance and flexibility that has allowed us to earn this business”.

DHL Express’ EVP, global network operations & aviation Travis Cobb commented: “DHL’s international aviation network is a true competitive differentiator and an enabler of growth for our customers. Cargojet’s ‘customer first’ culture has added flexibility and resilience to our network. A longer-term strategic alignment with Cargojet will bring additional capacity and allow us to continue delivering the highest levels of service quality to the market.”

DHL Express Americas’ CEO Mike Parra said: “Cargojet is an important aviation partner of DHL in North America and we see this expansion of our relationship further strengthening intra-regional and intercontinental links to and from this region. Its versatile cargo fleet and high on-time reliability positions us well to further capitalise on the dynamically growing e-commerce market, in particular. This step builds on the significant investments we have made in DHL’s aviation capacity and capabilities over the last two years in the Americas.”

In addition, to align interests and strengthen the long-term strategic relationship, Cargojet will issue to DHL warrants to acquire up to 9.5 per cent of Cargojet’s outstanding voting shares (on a non-diluted basis as of the date hereof) at a price of C$158.92 per share (based on the 20-day volume weighted average trading price immediately prior to the date hereof) over a period of seven years, with vesting tied to the delivery by DHL of up to C$2.3 billion in business volume during the same term.

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