Pilots strike hits ATSG revenues
27 / 01 / 2017
A fall in revenues due to a pilots’ strike has seen US-based freighter lessor Air Transport Services Group (ATSG) advise that its adjusted ebitda* from continuing operations for the fourth quarter and full year 2016 will be around $7m lower than in its prior guidance.
Said ATSG: “This reduction in guidance is due to the revenue loss resulting from a brief work stoppage in mid-November 2016 by pilots of its subsidiary ABX Air.
ATSG, which last year signed a major Boeing 767 freighter deal with stakeholder Amazon, now expects 2016 adjusted EBITDA for the fourth quarter to be approximately $56m and at $211m for the full year 2016.
Joe Hete, president and chief executive of ATSG, said: “Overall, we achieved significant gains across our businesses in 2016, including strong revenue growth and cash flow from additional 767 freighter deployments to external lease customers as well as other support services.
“The decision of the Teamster-represented pilots at ABX Air to resort to a work stoppage stemmed from a dispute over scheduling assignments and interrupted ABX Air’s operations for a short time prior to being enjoined by the US District Court.”
Hete added that ATSG will in early March 2017 provide its outlook for 2017, which will benefit from the "significant growth" in ATSG’s externally leased fleet of B767 freighter aircraft during 2016, as well as those additions planned during 2017.
Earlier this month (January), aircraft conversion firm Pemco was bought by Airborne Maintenance and Engineering Services, a subsidiary of ATSG.
The acquisition will "allow for a number of strategic benefits through combining operational strengths, expanded capabilities and cost savings related to shared services between the companies", said ATSG.
*Adjusted EBITDA from Continuing Operations is defined as earnings from continuing operations before income taxes plus depreciation and amortization expenses, net interest expense, non-service components of retiree benefit costs, amortization of lease incentive costs recorded in revenue and the write-off of debt issuance costs from a non-consolidating affiliate, less financial instrument gains and losses.