Atlas Air flies high on charters

[caption id="attachment_87815" align="alignright" width="500"] Atlas Air allocated more resources to handle charter demand in the second quarter. (Photo: Atlas Air)[/caption] On the back of what President and Chief Executive John Dietrich called “an exceptional quarter,” Atlas Air Worldwide Holdings reported an adjusted net income of $123.2 million for the three months ended June 30, 2020, compared to $4.5 million for the same period in 2019. The charter segment was a significant contributor to the second-quarter performance. Cargo charter block hours increased by 62.0% year over year, and revenue from cargo charters for commercial customers soared by 196% YoY to $394 million. According to Dietrich, Atlas Air had entered into new long-term charter agreements with large shippers and forwarders, including: HP, DHL, Apex Logistics, DB Schenker, Flexport and Geodis. In June, Atlas also began a charter operation for Cainiao between Asia and South America . Spencer Schwartz, executive vice president and chief financial officer, noted that some of these contracts extended into late 2021, and some even into the second half of 2022, making them “ACMI-like” in nature. To that end, Atlas reactivated three converted 747-400Fs in April and redeployed other 747-400Fs from ACMI flying to charters. Consequently, ACMI revenue in the second quarter was 5% lower than in 2019 because of a 3.9% reduction in block hours, but this was partially offset by higher 747, 777 and 737 CMI flying. Atlas also put into service a 777F from its Titan Aviation dry-leasing business. Dietrich also confirmed a report from our sister site Cargo Facts that subsidiary Southern Air will be expanding its 737-800F operations , saying that the carrier will be flying “a few more” 737-800BCFs on a CMI basis for Amazon. At the same time, he said that in ensuring “resources are allocated to the opportunities that generate the best returns,” Atlas had decided to exit Southern’s unprofitable 737-400F operations for DHL. While the “vast majority” of earnings are traditionally generated in the second half of any given year, Schwartz said that due to the strength of the first half, 2020’s full-year adjusted net income will be more evenly spread. In particular, in the third quarter, usually a much quieter period, adjusted net income will account for approximately 20% of that of the full year, more than six times higher than the performance in the third quarter of 2019. Overall, Atlas expects to fly more than 330,000 block hours in 2020, with about 70% of them on ACMI services and the rest on charters. Even with recent peak-like conditions, Atlas is confident about the conventional yearend peak, given that expectations of the resumption of belly capacity have slowed dramatically and passenger flights are not being brought back as quickly as many had hoped. “That plays well for our business, quite frankly,” Dietrich said. “Coupled with a lot of the secured agreements that we have in place, as well as the demand we’re seeing — not just for PPE but manufactured goods — we believe yields will continue to be very strong for the weeks and months to come, and certainly through peak.”

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Atlas Air flies high on charters

E-commerce strengthens Cargojet’s Q2 results

Cathay Pacific reinstates top cargo-dedicated role

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