ATSG merges airlines

A US COMPANY, which owns an aircraft leasing service and three airlines, is set to merge two of its carriers after losing air cargo business from a German logistics company.
Air Transport Services Group (ATSG) is merging Air Transport International and Capital Cargo International Airlines after Schenker phased-out the cargo network the group managed in Toledo, in the state of Ohio (US), last December. 
Schenker has since transferred its operations to DHL’s air hub at Cincinnati/Northern Kentucky International Airport, based in the southern state of Kentucky.
ATSG’s business with Schenker, including eight Boeing 727 and eight DC-8 freighters, accounted for 26 per cent of the company’s 2011 consolidated revenue, according to its annual report in March.
Since Schenker began its phase-out programme in September, ATSG – which employs 2,010 people – has reduced its payroll costs at the two airlines by about US$800,000 a month.
However, it is understood a ‘tentative’ agreement has been reached with flight crew and the company expects to have a deal finalised by the end of the year.
“We have been strengthening our business by restructuring our airlines to reduce overheads, and by training crews from our DC-8s and 727s to fly our newer 767s and 757s,” Joseph Hete, the firm’s chief executive officer, states in ATSG’s annual report. 
“The net effect has been an overall reduction of our flight crews this year, and a reduction of about 35 per cent of the staff of two of our airlines.”
As a result of the loss of business, ATSG’s revenue for the first quarter ending 31 March, dropped nearly 17 per cent to $145.5m compared with $175.1m a year ago. 
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