Core Viewpoint - Air T, Inc. reported a decline in revenues and increased net losses for the third quarter of fiscal 2026, despite a recent acquisition aimed at expanding its market presence in the Australian regional airline sector [2][8]. Financial Performance - For the third quarter ended Dec. 31, 2025, Air T reported revenues of $71.1 million, down 8.7% from $77.9 million in the prior-year quarter [2]. - The company experienced an operating loss of $3.8 million compared to an operating income of $1.4 million a year earlier [2]. - Net loss attributable to Air T stockholders widened to $2.5 million, or $(0.91) per share, from a loss of $1.3 million, or $(0.47) per share, in the prior-year period [2]. Year-to-Date Performance - On a nine-month basis, revenue declined 8.6% to $206.2 million from $225.5 million [3]. - Net income attributable to Air T stockholders fell 69.8% to $0.3 million, or $0.10 per share, from $0.9 million, or $0.32 per share, a year earlier [3]. Segment Performance - Overnight air cargo revenue was flat at $30.6 million [4]. - Ground support equipment sales rose 7.9% to $12.8 million from $11.8 million [4]. - Commercial aircraft, engines, and parts revenue fell 42.4% to $18.8 million from $32.7 million [4]. - Digital solutions revenue increased 24.9% to $2.5 million from $1.9 million [4]. - The newly added regional airline segment contributed $5.2 million for the partial quarter following the Rex acquisition [4]. Key Business Metrics - Adjusted EBITDA for the quarter was $0.2 million, down from $2.7 million in the prior-year period [5]. - Ground support equipment generated $1.7 million in adjusted EBITDA, up from $0.2 million a year earlier [5]. - Overnight air cargo produced $1 million, down 48.6% from $1.9 million [5]. - The commercial aircraft, engines, and parts segment posted an adjusted EBITDA loss of $0.2 million against a $2.9 million profit last year [6]. - The regional airline segment reported a $0.5 million adjusted EBITDA loss for its initial 13 days of operations under Air T ownership [6]. - Order backlog in the ground support equipment segment nearly doubled to $12.9 million as of Dec. 31, 2025, from $6.2 million a year earlier [6]. Investments and Acquisitions - The equity method investments balance increased to $33.6 million as of Dec. 31, 2025, from $19 million as of March 31, 2025 [7]. - The acquisition of Rex Regional Airlines was described as a strategic entry into the Australian regional airline market, with a preliminary bargain purchase gain of $95.8 million recorded as a deferred credit on the balance sheet [8][10]. - The preliminary fair value of assets acquired from Rex totaled $164.8 million against liabilities of $57.9 million, resulting in net assets of $106.9 million [12]. Management Commentary - Management did not provide formal financial guidance for upcoming quarters, focusing instead on operational integration of Rex and execution priorities [11].

Core Insights - Cargojet Inc. operates as a specialized provider of all-cargo airline services, focusing on express logistics and dedicated airlift for Canada's time-sensitive freight markets [1][2] - The company employs a mixed model of scheduled domestic services, dedicated charters, and wet-leasing arrangements, positioning itself as a viable alternative to global integrators like FedEx and UPS [1][5] - Recent operational adjustments and capacity rebalancing have been made to enhance margin resilience amid volume cyclicality [1] Company Overview - Cargojet is headquartered in Mississauga, Canada, and offers scheduled overnight and charter air cargo services primarily across North America [2] - The operational model combines a hub-and-spoke network with on-demand charters and ACMI services, allowing rapid response to seasonal surges in e-commerce [2][3] Market Positioning - The company emphasizes three operational pillars: flexibility in fleet deployment, a hub-based scheduling system optimized for overnight connections, and a diverse client segmentation that includes e-commerce sellers and freight forwarders [3][8] - Cargojet's operational relevance is illustrated through its ability to temporarily replace capacity for larger carriers and supplement seasonal routes [3][5] Financial Information - Cargojet's market capitalization is estimated to be between CAD 1.0 billion and CAD 2.0 billion, influenced by share-price shifts and broader market trends [9][11] - Revenue patterns are driven by a mix of scheduled operations and wet-lease contracts, with a focus on separating recurring scheduled revenue from episodic charter income for better earnings modeling [10][13] Operational Attributes - The company operates a flexible fleet mix that enables both short-haul and medium-haul flights, supporting next-day delivery promises [8][20] - Cargojet's strategic partnerships with freight forwarders and big-box retailers enhance its ability to capture time-sensitive lanes [7][20] Leadership and History - Founded in the early 2000s, Cargojet has evolved from a regional operator to a public company, with significant milestones including fleet expansion and the establishment of nightly scheduled routes [21][25] - The leadership team, including CEO Ajay Virmani, emphasizes disciplined capacity deployment and strategic partnerships to navigate market cyclicality [26][29] Market Position and Index Membership - Cargojet trades on the Toronto Stock Exchange under the ticker CJT and is part of the S&P/TSX Composite market universe, positioned within the mid-cap segment of Canadian industrials [30][36] - The company's market position is shaped by its initial domestic route establishment, fleet modernization, and securing ACMI contracts during peak seasons [30][36]