Atlas Air 2020 results “exceed expectations” due to historic volumes

Atlas Air Worldwide said its full-year 2020 operating results “exceeded expectations”, thanks to “historic volumes” driven by e-commerce growth, as well as the requirements of businesses and communities during the pandemic.

In its full-year 2020 results, the freighter operator achieved a 17.2% year-on-year increase in revenues — from $2.7bn in 2019 to $3.2bn this year. Net income increased to $360.3m.

Adjusted Ebitda for 2020 was $844.2m – 67.3% higher than the $504.8m achieved in 2019.

Volumes during 2020 amounted to 344,821 block hours, compared with 321,140 in 2019 — a 7.4% year-on-year increase.

Looking at the Atlas Air Worldwide’s divisional results for full-year 2020, the charter division achieved increased year-on-year revenues of 42%, from $1.3bn to $1.9bn.

The charter division’s direct contribution increased by 274.7% year on year, from $149.3m in 2019 to $559.7m last year.

Revenues in the company’s ACMI division decreased by 2.9% year on year, from $1.24bn to $1.21bn.

The ACMI division’s direct contribution declined by 17.6% — from £218.5m to $180m.

Atlas Air Worldwide’s dry leasing division saw revenues decrease by 17.7% year on year, from $200.8m to $165.2m.

The dry leasing division also reported a 41.7% year-on-year decline in direct contributions last year — from $70.4m to $41m.

John Dietrich president and chief executive at Atlas Air Worldwide, commented: “We finished this unprecedented year on a strong note, with financial and operating results that exceeded our expectations. I’d like to thank everyone at Atlas for stepping up to deliver an extraordinary peak season and full year for our business and our customers.”

He added: “In the face of unrelenting operational complexities driven by the Covid-19 pandemic, we added widebody capacity, increased aircraft utilisation and grew block hours to carry historic volumes, including essential goods that businesses, communities and individuals require as well as holiday e-commerce packages.

“We are leveraging our unrivaled portfolio of assets and the scale of our global network. We are also continuing to diversify our customer base and have entered into numerous long-term charter agreements with strategic customers, such as Cainiao, Flexport and HP Inc. These agreements will provide reliable and attractive revenue streams for the years ahead.”

In the fourth quarter of 2020, Atlas Air Worldwide experienced a 24.9% year-on-year increase in revenues, from $747m to $932.5m. Net income increased to $184m.

Adjusted Ebitda in Q4 2020 was $279.7m – 36.7% higher than the $204.7m achieved in the fourth quarter of 2019.

Volumes in the fourth quarter of 2020 increased by 13.7% year on year to 96,079 block hours.

Divisionally, the charter division in Q4 last year achieved revenues of $559.2m — a 54.9% year-on-year increase on a year earlier.

Direct contribution for the charter division in Q4 last year was $186.3m — a 166.8% year-on-year increase on the same period in 2019.

“Higher charter segment revenue during the quarter was primarily due to an increase in flying, partially offset by a slight decrease in the average revenue per block hour due to lower fuel costs,” the company explained.

Revenues for the ACMI division in Q4 decreased by 2.1% year on year, from $345m to $337.8m.

The ACMI division’s direct contribution in Q4 last year declined by 32.7%, from £104.4m to $70.3m.

“ACMI segment revenue during the period primarily reflected lower levels of flying driven by the redeployment of Boeing 747-400 aircraft to the charter segment to support long-term charter programs with customers seeking to secure committed cargo capacity,” the company said. “This was partially offset by an increase in aircraft utilisation and higher CMI flying.”

Meanwhile, the dry leasing division achieved revenues of $41.6m in Q4 last year — a 4.2% decline on the same period in 2019.

At $11m, the dry leasing division’s direct contribution in Q4 2020 was 6.1% less than a year earlier.

“Lower segment revenue and contribution in the fourth quarter of 2020 primarily related to changes in leases and the disposition of certain non-essential dry leased aircraft during the first quarter of 2020,” the company explained.

Dietrich said: “Providing our customers with modern, fuel-efficient aircraft has been a longstanding priority at Atlas, and we were excited to announce that we ordered four new 747-8Fs from Boeing. This acquisition underscores that commitment and also demonstrates our focus on environmental stewardship through the reduction of aircraft noise, emissions and fuel consumption. The 747-8F provides 20% higher payload capacity and 16% lower fuel consumption than the very capable 747-400F, and has 25% higher capacity than the new-technology 777-200LRF. In addition, the advanced engines on the 747-8F reduce noise by approximately 30% compared to the previous generation of aircraft.

“As the world’s largest 747 freighter operator, the -8F is core to our business, and complements our diverse fleet of 747-400s, 777s, 767s and 737s. We are expecting delivery of these new aircraft from May through October 2022, and they will play a key role in advancing Atlas’ strategic growth plans for decades to come.”

Looking forward, the company said it expects to fly approximately 85,000 block hours in the first quarter of 2021, with revenue of approximately $820m, and adjusted Ebitda of about $150m.

“In addition, we expect first-quarter 2021 adjusted net income to grow approximately 60% to 65% compared with adjusted net income of $29.9m in the first quarter of 2020,” said Dietrich.

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