Atlas Air revenues driven up by higher rates and volumes in Q2

Freighter operator Atlas Air Worldwide has achieved increased revenues and net income in the second quarter of this year – due to higher rates and the “significantly improved” performance of its Airline Operations division.

In its second-quarter 2021 results, the freighter operator recorded a 20% year-on-year increase in revenues to $990.4m. Net income increased 35.7% to $107.1m.

Adjusted ebitda for the second quarter was $243.7m — 1.3% lower than what was achieved in the same period of 2020.

Volumes in the second quarter amounted to 93,190 block hours in second quarter 2020 — a 9.7% year-on-year increase.

Atlas Air Worldwide president and chief executive John Dietrich, commented: “Our strong performance continued in the second quarter, with revenue and earnings exceeding our already high expectations. These positive results were driven by our team executing our strategy, increasing the utilisation of our aircraft and delivering safe, high-quality service for our customers.

“Our performance continued to benefit from operating the four B747 freighters and one B777 freighter we reintroduced to our fleet throughout 2020. This capacity, along with a tremendous team effort, contributed to our ability to enter into and extend long-term agreements with strategic customers, as well as to capitalise on lucrative short-term opportunities in the strong global airfreight market.”

He added that economic and supply chain conditions remain “favourable” for air cargo and Atlas’ freighter fleet.

Favourable conditions include: “Global airfreight volumes exceeding pre-pandemic levels, an acceleration of e-commerce and express growth, low inventory levels, positive Purchasing Managers’ Index readings, as well as congestion, long lead times and elevated pricing for ocean freight.

“Demand also continues to exceed available supply, particularly on long-haul international routes, as belly capacity on a significant number of widebody passenger aircraft remains out of the market.”

Looking at the Atlas Air Worldwide’s divisional results for the second quarter, Airline Operations achieved increased year-on-year revenues of 21% to $955.9m.

The division’s direct contribution increased by 15.6% year on year to $231.8m.

Airline Operations’ cargo volumes in the second quarter amounted to 87,675 block hours in second quarter 2020 — a 9% year-on-year increase.

The freighter operator noted: “Higher Airline Operations revenue primarily reflected an increase in flying and a higher average rate per block hour. Block-hour volume growth during the period was driven by our ability to increase aircraft utilization as demand for our commercial cargo Charter and CMI services increased.”

The carrier’s Dry Leasing division saw revenues decrease by 1.2% year on year to $40.4m, while direct contribution climbed 10.7% to $10.8m.

“Higher segment contribution was primarily due to lower interest expense related to the scheduled repayment of debt,” the company said.

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Year-to-date, the company achieved a 26% year-on-year in revenues to $1.8bn. Net income climbed 92.7% to $197m, while adjusted ebitda increased 15.4% to $425m.

The Airline Operations division posted revenues of $1.8bn for the first six months of this year — a 27.7% year-on-year increase on a year earlier. Direct contribution climbed to $400.1m – 32% higher than the same period in 2020.

The Dry Leasing segment posted a 2.5% decline in revenues in the first six months of this year — down to $80.8m. Direct contribution increased 4.5% year on year to $21.3m.

Looking forward, Dietrich said: “I would like to thank all our employees for safely supporting our customers and the global supply chain during this time of continued need. While the operating environment remains challenging due to the ongoing pandemic, the market dynamics we are seeing in the third quarter remain strong.

 “As a result, we expect revenue of nearly $1bn and adjusted ebitda of about $250m from flying more than 90,000 block hours in the third quarter of 2021. In addition, we anticipate adjusted net income to grow approximately 50% compared with adjusted net income of $82.7m in the third quarter of 2020.”