ATSG sees no diminished demand for leased freighters
05 / 05 / 2023
Rich Corrado, chief executive officer and president of ATSG. Photo: ATSG
Lessor ATSG hasn’t seen a dip in demand for freighters despite a difficult first quarter on account of “operating headwinds”.
The Wilmington, Ohio-headquartered firm said its aircraft leasing business Cargo Aircraft Management (CAM) “has seen no reduction in demand for its desirable leased freighters, and continues to invest with the expectation of delivering attractive returns for the midsize freighter aircraft we expect to lease during the rest of 2023 and into 2024”.
Results from the CAM segment show aircraft leasing and related revenues from external customers in the first quarter of 2023 were up 8% compared to the first quarter of 2022.
This primarily reflected “the benefit of eight newly converted Boeing 767-300 freighters leased since the beginning of the first quarter of 2022, offset by lower revenues from engine pooling arrangements for customers leasing 767-200 freighters”.
CAM deployed two 767-300 freighters to an external customer during the quarter. One 767-200 freighter was returned upon lease expiration.
92 CAM-owned 767 freighter aircraft were leased to external customers at the end of the quarter, six more than a year ago.
CAM intends to deploy 18 more freighters in 2023, including 12 767s and six Airbus A321s. 27 CAM-owned aircraft were in or awaiting conversion to freighters, 12 more than a year ago. The quarter-end total includes nine A321 aircraft and 18 767s.
In a cargo outlook for the rest of 2023, Rich Corrado, president and chief executive officer of ATSG, said that e-commerce and sustainability will drive midsize freighter demand.
He said demand for ATSG’s freighter aircraft remains very strong, including its 767s, the narrowbody A321s, and the A330 freighters the company will begin to deploy next year.
CAM is expected to generate more than $70m in 2024 revenues from freighters it expects to lease this year.
“Our customers remain eager to lease the freighter aircraft we intend to deliver,” he said. “The persistent growth in online commerce throughout the world, and the need to replace older, less efficient aircraft types, means that midsize freighters will remain essential to global economic growth.”
The overall business recorded revenues of $501m, up 3% compared to the same quarter last year, but adjusted EBITDA was down $20m to $138m.
Corrado said: “These results, while disappointing, do reflect the operating headwinds we talked about in February, including lower 2023 results at our airlines.
“The first quarter Adjusted EBITDA reflected lower than expected passenger airline revenues, and the continued impact of inflation at our airlines.”
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