The Air Transport Services Group (ATSG) continued its strategy of diversification with the acquisition, through its Airborne Maintenance and Engineering Services, Inc. (AMES) subsidiary, of PEMCO World Air Services, Inc. (PEMCO), a Tampa-based maintenance, repair and overhaul (MRO) company.
ATSG plans to concentrate its heavy maintenance and modifications in multiple locations, including Wilmington and Tampa, while continuing PEMCO’s conversion activity in Tampa, Central America and Asia.
In addition to its MRO work, PEMCO does brisk business doing 737-300 passenger-to-freighter conversions for carriers in China. PEMCO-converted aircraft make up more than 70 percent of China-based 737-300F and -400F fleets in service. The company has redelivered more than 50 freighter-converted 737-300Fs and 737-400Fs to Chinese operators since 2006, and redelivered the first 737-300F aircraft in China.
ATSG President and CEO Joe Hete said that the acquisition “will expand access to maintenance service for customers of ATSG’s expanding fleet of Boeing 767 cargo aircraft. It is consistent with our goal to diversify ATSG’s revenue and earnings, for an investment in the same price range as our planned and completed stakes in cargo airlines in China and Europe. The combination of PEMCO’s conversion and MRO sales of both Airbus and Boeing products with AMES’ existing offerings will create a sustained, growth-oriented aircraft maintenance product and services portfolio.”
Hete added that, based on ATSG’s current estimates and outlook, the PEMCO acquisition is expected to be accretive to ATSG’s earnings starting in 2017.