Forwarder and shipper charter deals propel Atlas Air in Q2
06 / 08 / 2020
Atlas Air Boeing 747-400F
Atlas Air Worldwide Holdings saw its operating revenues and income increase during the second quarter of the year as forwarders and shippers looked to secure freighter capacity through charter deals with the firm.
The New York-headquartered lessor reported second quarter operating revenues of $825.2m — up 24.3% on year earlier — while operating income improved by more than 1000% to $120.6m.
The company said it benefited from higher demand for its services because of the grounding of bellyhold operations.
The company has re-activated three B747Fs that it had put into storage and has won new contracts with forwarders and shippers.
Chief executive John Dietrich said: “These positive results were primarily driven by the team capitalising on strong demand and higher yields in our commercial charter and South America businesses.
“We also continued to provide the US military with essential services and our ACMI customers flew well above their minimum guarantees.
“We continued to execute on very favorable business opportunities in a challenging operating environment, with the safety of our employees as our top priority.
“We leveraged the scale of our world-class fleet, the scope of our global operations and the flexibility of our business model to capitalize on market dynamics.
“To serve this increased demand, we reactivated three of our 747-400 converted freighters and operationalized a 777 freighter from our Dry Leasing business.
“This enabled us to serve the strong and profitable shorter-term demand, while also entering into numerous new long-term charter programmes at attractive yields.
“We expanded our long-term charter business to include new agreements with manufacturers such as HP Inc., and large freight forwarders like DHL Global Forwarding, APEX Logistics, DB Schenker, Flexport and Geodis, all that wanted to secure committed capacity from us.”
Net income was down by 9.2% to $78.9m as the company recorded higher heavy maintenance expense, including additional engine overhauls and other maintenance performed to take advantage of slot availability and opportunities for vendor pricing discounts.
It also registered higher pilot costs related to a 10% increase in pay rates resulting from our recent interim agreement with our pilots and premium pay for pilots operating in certain areas outside of the US significantly impacted by Covid-19.
Its ACMI revenues for the period decreased by 5% year on year as it re-allocated B747 aircraft to its charter business to take advantage of market demand. Its charter business saw revenues grow by 57.6% to $497.5m. Its dry leasing business recorded a revenue decrease of 6% to $40.9m as a B777F was sent over to charter.
Yesterday, Air Cargo News reported on the rapid increase in Atlas’ share price since the start of the year. Since then prices have continued to rise and now stand at $59.50.