Atlas sees record volumes in third quarter

US-based freighter lessor Atlas Air Worldwide Holdings saw record volumes in the third-quarter driven by ongoing market strength, customer demand and the development of its core business.
Volumes in the third quarter of 2018 increased 14% to 73,672 block hours, with revenue growing 23% to $656.6m.
Commenting on the results, Atlas Air Worldwide Holdings president and chief executive Bill Flynn said: “We continue to leverage the scale and scope of our enterprise and our leadership in global aviation outsourcing.
“Secular trends are driving opportunities and growth in airfreight. And our focus is on express, e-commerce and fast-growing regions where efficient, time-definite, freighter networks are essential to meet the growing demands of businesses and consumers,” he added.
The company’s ACMI business saw a 13% rise in block hours, reflecting increased Boeing 767 flights for Amazon (it has 18 77-300s now in service for the e-commerce giant) and the start-up of 747-400 flights for several new customers (including Asiana Cargo). At $288.6m, operating revenue for this segment was higher than the same quarter of 2017 when it totalled $258.1m.
An increase in widebody Boeing 747-400F ACMI operations was accompanied by a rise in smaller-gauge B767 CMI flights, causing revenue per block hour to remain steady.
On the charter side of things, Atlas said an increase in military and commercial cargo demand, plus higher yields (excluding fuel), drove performance. Operating revenue for this segment climbed year on year from $243.6m to $322.8m for the quarter.
Dry leasing performance reflected the placement of additional B767-300 converted freighter aircraft throughout the second half of 2017 and first three quarters of 2018, as well as the placement of one Boeing 777-200 freighter in February 2018 and a second one in July 2018. Operating revenue rose from $30.8m to $44.5m.
Flynn added: “Looking to the full year, we continue to expect our revenue to exceed $2.6bn. We project adjusted earnings before interest, taxes, depreciation and amortization to increase to more than $525m. And we anticipate our full-year adjusted net income to grow near or above 50% compared with 2017.”
The outlook is based on expectations of solid peak-season yields and volumes, including the additional seasonal flying Atlas does for express and e-commerce operators, Flynn said. The company is anticipating record fourth-quarter block hours, revenue, adjusted EBITDA and adjusted net income.
He continued: “The fourth quarter will also benefit from our second 747-400 freighter for Asiana Cargo, which began flying in September, and our first 747-400 freighter for SF Express, China’s leading express operator, which began service in October.
“In addition, we expect to add two more 767-300 converted freighters for Amazon before Thanksgiving, which will bring us to 20 aircraft in line with the schedule we announced in May 2016.”
Flynn concluded: “While tariffs and trade are important topics, neither we nor our customers, with whom we are in close contact, have seen a material impact on airfreight demand. Airfreight tonnage continues to grow from record levels, and airfreight demand is growing in line with its longer-term rate of about four percent per year, with express and e-commerce growing much more than that.”