Atlas Air reports improved cargo demand
Atlas Air Worldwide Holdings announced adjusted net income of US$15.9 million (11.8 million euros) for Q2, compared with US$20.4 million (15.2 million euros) for Q2 of 2013.
“We are off to a good start in 2014. Airfreight demand is improving, and we are encouraged about our full-year outlook,” William J. Flynn, president and CEO, said. “Atlas is an entrepreneurial company. Our second-quarter results illustrate the positive contributions being generated by the investments we've made and the initiatives we've undertaken. In the face of an uncertain airfreight market and an anticipated decline in military cargo demand, we have diversified our business mix and are driving business resilience.”
Freighters are played a part in the results of Atlas Air, a provider of outsourced aircraft and aviation operating services.
“Results within our ACMI segment are benefiting from modern 747-8 freighters,” Flynn said. “In Dry Leasing, the investments we've made since early 2013 in attractive 777 freighters on long-term leases with strong customers are driving a significant increase in contribution from highly predictable revenue and earnings streams.”
Profitability in Atlas Air’s ACMI business reflected an increase in 747-8F revenue, but revenues were affected by a decline in block-hour volumes related to the return of three 747-8Fs from IAG Cargo in April and early May. This decline was partially offset by the placement of two of the -8Fs with DHL Express in May, the start-up of ACMI -8F flying for BST Logistics in February 2014 and Etihad in May 2013, as well as the start-up of ACMI 747-400 flying for Astral Aviation in September 2013.
In Dry Leasing, revenue and profitability grew following the addition of three 777F aircraft in January 2014 and two in July 2013, which raised Atlas Air’s 777F fleet count to six. Each of these aircraft are leased to customers on a long-term basis.
In AMC Charter, results benefited from an increase in the volume of passenger flying on higher-yielding 747-400 aircraft, partially offset by a decrease in demand for cargo flying.
For the first half of 2014, adjusted net income totaled US$27.3 million (20.3 million euros), compared with US$26.3 million (19.6 million euros) in the first half of 2013.
Atlas Air said airfreight volumes continue to improve. But airfreight yields lag behind, and there is still limited visibility into peak-season yields and demand. As a result, Atlas Air is maintaining its earnings outlook for the full year.
“Should 2014 be the inflection point when growth returns to commercial airfreight and yields improve, our business initiatives and the investments we have made have positioned Atlas to be one of the prime beneficiaries,” Atlas Air said.