The company issued this statement:
Atlas Air Worldwide Holdings, Inc., a leading global provider of outsourced aircraft and aviation operating services, announced adjusted net income attributable to common stockholders of $15.9 million, or $0.63 per diluted share, for the three months ended June 30, 2014, compared with $20.4 million, or $0.79 per diluted share, for the three months ended June 30, 2013.
On a reported basis, net income attributable to common stockholders in the second quarter of 2014 totaled $29.6 million, or $1.17 per diluted share, compared with $20.1 million, or $0.78 per diluted share, in the year-ago quarter.
“We are off to a good start in 2014. Airfreight demand is improving, and we are encouraged about our full-year outlook,” said William J. Flynn, President and Chief Executive Officer. “As we continue to gather additional insight into second-half yields, demand and military requirements, we are maintaining our full-year earnings framework.”
Mr. Flynn added: “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.
“Results within our ACMI segment are benefiting from modern 747-8 freighters as well as an increase in flying for our CMI customers. 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.
“In addition, the expansion of our 767 platform and our growth into military and commercial passenger charter operations are providing added strength, complementing the improvement in airfreight demand.
“Led by the strength of our brand, our global market leadership in outsourced aircraft assets and services, and our ability to work closely with our customers as they enhance their route networks and grow their businesses, we are well-positioned to take advantage of market opportunities and improvement – and to continue our focus on longer-term business growth.”
Adjusted earnings in the second quarter of 2014 exclude an income tax benefit of $24.0 million, or $0.95 per diluted share, due to beneficial tax planning related to the tax treatment of extraterritorial income. This was partly offset by a noncash loss of $9.4 million after tax, or $0.37 per diluted share, resulting from the trade-in of used spare engines for new engines under the company’s engine-acquisition program, as well as additional charges totaling $1.0 million after tax, or $0.04 per diluted share, which were primarily related to the company’s U.K. affiliate, Global Supply Systems Limited.
Adjusted earnings in the second quarter of 2013 exclude an after-tax loss of $0.6 million, or $0.02 per diluted share, on the early extinguishment of debt, partly offset by an after-tax gain of $0.3 million, or $0.01 per diluted share, on the disposal of aircraft.
Profitability in our ACMI business during the second quarter reflected an increase in 747-8F revenue and an increase in CMI flying, offset by higher maintenance expense for aircraft operating in this segment.
ACMI revenues benefited from an increase in our average rate per block hour driven by our 747-8Fs, but were impacted by a decline in block-hour volumes related to the return of three 8Fs from British Airways 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. Block-hour volumes during the second quarter also reflected an increase in CMI Dreamlifter flying for Boeing and the initiation of CMI 767-200 passenger aircraft service for MLW Air during the third quarter of 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 our 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. Segment results in Commercial Charter reflected a decrease in market rates and increases in maintenance and crewmember travel expense, partially offset by an increase in block-hour volumes.
Reported earnings for the period reflected an effective income tax rate benefit of 461.0%, driven by tax-planning efforts regarding a federal income tax benefit related to the treatment of extraterritorial income from the offshore leasing of certain of our aircraft.
For the six months ended June 30, 2014, adjusted net income attributable to common stockholders totaled $27.3 million, or $1.08 per diluted share, compared with $26.3 million, or $1.01 per diluted share, for the six months ended June 30, 2013.
On a reported basis, first-half 2014 net income attributable to common stockholders totaled $37.5 million, or $1.49 per diluted share, compared with $40.1 million, or $1.54 per diluted share, in the first half of 2013.
Cash and Short-Term Investments
At June 30, 2014, our cash, cash equivalents, short-term investments and restricted cash totaled $299.2 million, compared with $339.2 million at December 31, 2013.
The change in position reflected cash provided by operating and financing activities offset by cash used for investing activities.
Net cash used for investing activities during the first half of 2014 primarily related to the purchase of three 777F aircraft for our Dry Leasing business.
Net cash provided by financing activities primarily reflected proceeds from the issuance of debt in connection with the acquisitions of these aircraft. Those proceeds were partially offset by payments on debt obligations and debt issuance costs.
We are encouraged by our performance in the first half of 2014 and the positive direction of market trends so far this year.
Airfreight volumes continue to improve, and recent forecasts suggest that airfreight demand may grow by several percentage points in 2014 – the first real growth after three essentially flat years. Airfreight yields continue to lag behind, however, and there is still limited visibility into peak-season yields, demand and second-half military requirements. As a result, we are maintaining our earnings outlook for the full year.
On a sequential basis, per-share earnings in the third quarter of this year should improve over our adjusted second-quarter results by an increment similar to the increase between our first- and second-quarter adjusted earnings.
For the full year, we expect total block hours to be comparable to 2013, with more than 70% in ACMI, approximately 10% in AMC Charter, and the balance in Commercial Charter. Our Dry Leasing segment should show dramatic growth compared with 2013. While our share of military flying, mainly in passenger service, has increased due to a reduction in the number of carriers serving the market and our ability to capitalize on additional flying opportunities, we continue to expect an overall decline in military demand, primarily in cargo, compared with 2013.
We also expect aircraft maintenance expense to total approximately $180 million in 2014, with depreciation of approximately $120 to $125 million. Core capital expenditures this year are expected to total approximately $45 to $50 million, mainly for spare parts for our expanded fleet.
We remain confident in the resilience of our business model, as well as our ability to adapt to the market and to leverage the scale and efficiencies in our operations. The business initiatives we have undertaken and the investments we have made have enabled the company to deliver meaningful earnings in any environment.
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 Worldwide is the parent company of Atlas Air, Inc. (Atlas) and Titan Aviation Leasing (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar). Through Atlas and Polar, Atlas Air Worldwide operates the world’s largest fleet of Boeing 747 freighter aircraft.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 747-87UF N852GT (msn 37571) of Atlas Air taxies at Anchorage, AK.
AirBridgeCargo-ABC (Moscow), part of Volga-Dnepr Group and Russia’s largest cargo airline, recently celebrated the delivery of the airline’s fifth 747-8 Freighter (VQ-BRJ, msn 37670) on December 27, 2013.
With delivery of the fifth 747-8 Freighter, AirBridgeCargo continues to follow its long-term fleet modernization strategy to further improve the quality of its product. The new aircraft will be used on ABC’s existing route network linking Europe, Asia and the United States via the airline’s hub in Moscow.
At present AirBridgeCargo’s fleet consists of 12 Boeing 747s, including five Boeing 747-400ERFs (Extended Range Freighters), three Boeing 747-400 Freighters and five Boeing 747-8 Freighters.
The carrier achieved a 5% growth in cargo tonnage in 2013, with its highest ever volume of 340,000 tons across its network linking Europe, Russia, Asia and North America.
The airline reported volume growth on all of its major routes and this was matched by a 5% improvement in revenue. AirBridgeCargo’s Freight Ton-Kilometers (FTK) rose 15% in 2013, while its average load factor of 72% show a marginal 1.7% gain over the previous year.
Despite challenging market conditions in 2013, ABC continued with its long-term fleet modernisation strategy and took delivery of two more new generation freighters Boeing 747-8F. With the delivery of its fifth Boeing 747-8F in December 2013, AirBridgeCargo completed its fleet renewal plan which began two years ago. This investment has reduced the average age of its aircraft fleet from nine years at the end of 2011 to three years at the end of 2013. At present, ABC’s fleet is one of the youngest in the air cargo industry.
AirBridgeCargo took delivery of its first Boeing 747-8F (VQ-BLQ) (see above) in January 2012, with the second and third aircraft joining its fleet in March and December 2012. The fourth new generation freighter entered service with ABC in September last year. As part of the modernization program, ABC removed four older aircraft from its fleet; two Boeing 747-200F, one Boeing 747-300F and a Boeing 747-400ERF. A further 747-400ERF will leave its fleet in 2014.
In 2013, AirBridgeCargo joined the Olympic movement with the delivery of 126 tons of broadcasting equipment as well as 214 tons of sports and lighting equipment for the 2014 Winter Olympics taking place in the Russia City of Sochi in February. The flights were performed using Boeing 747 and Boeing 737 cargo aircraft.
Copyright Photo: Bernhard Ross/AirlinersGallery.com. The first, Boeing 747-8HVF VQ-BLQ (msn 37581) taxies at Frankfurt.
Silk Way Airlines (Baku, Azerbaijan) and Boeing today announced an order for two Boeing 747-8 Freighters valued at $704 million at current list prices.
Silk Way Airlines currently operates Boeing 747-400 Freighters (see above) and 767-300 Freighters. It is considered as one of the leading cargo airlines in Central Asia providing full-fledged services to Europe and the United Kingdom and the Middle East, as well as the Far East including Korea, China and Hong Kong. In addition, it also serves international destinations through a network of alliances.
Copyright Photo: OSDU/AirlinersGallery.com. Boeing 747-4R7F 4K-800 (msn 29729) prepares to land at Moscow (Shereyetyevo).
Boeing (Chicago) will deliver the first 747-800F Freighter to launch customer Cargolux Airlines International (Luxembourg) on September 19, 2011 at Paine Field in Everett. Cargolux will fly the airplane away that morning and put the airplane into revenue service. Boeing will celebrate the first delivery with Cargolux, employees and other stakeholders the following day at the Everett factory. Cargolux will take delivery of the second 747-8 Freighter on September 21. The carrier has a total of 13 of the airplanes on order.
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Copyright Photo: Nick Dean. Please click on the photo for additional information.
Boeing receives the type certificate for the new Boeing 747-800F freighter, Cargolux to take delivery next month
Boeing (Chicago) today received U.S. Federal Aviation Administration (FAA) and European Aviation Safety Agency (EASA) certification Friday for the new 747-8 Freighter, passing two of the final landmarks on the airplane’s journey to entry into service. The FAA granted Boeing an Amended Type Certificate (ATC) and an Amended Production Certificate for the 747-8 Freighter, while the EASA also granted the company an ATC for the airplane.
With these certificates, the program is in the final stages of preparing to deliver the first 747-8 Freighter to launch customer Cargolux in early September 2011.
The Amended Type Certificate acknowledges that the FAA and EASA have certified that the design of the 747-8 Freighter is compliant with all aviation regulatory requirements and will produce a safe and reliable airplane. The airplane logged more than 3,400 hours of flight testing and many thousands more of ground, part, component, materials and other testing on the road to certification.
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Boeing 747-8R7F N747EX (msn 35808) SBD (Michael B. Ing), originally uploaded by Airliners Gallery.
Boeing (Chicago) yesterday announced the 747-8 Freighter successfully completed its certification flight test program Tuesday, with two airplanes landing at Paine Field in Everett, Washington. Flight test airplane RC522 completed testing of the flight management computer (FMC) and RC523 completed function & reliability (F&R) testing.
The first 747-8 Freighter is scheduled to be delivered to launch customer Cargolux in September after certification from the U.S. Federal Aviation Administration (FAA).
The 747-8 Freighter has flown more than 1,200 flights and 3,400 hours since its first flight February 8, 2010. During that time, the five-airplane test fleet was used to gather data for more than 1,700 FAA certification requirements. Boeing tested the capabilities of these airplanes far beyond what they are expected to encounter in normal service. Tests concluded with F&R testing, a final phase in which an airplane must accrue 300 FAA-approved flight hours in its final delivery configuration.
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Boeing (Chicago, Seattle, Wichita and Charleston) today announced a schedule change for the 747-8 Freighter with the first delivery now expected to be in mid-year 2011. The company also announced steps it is taking to support the new schedule, including adding a fifth airplane to the flight-test fleet.
Boeing previously indicated that, following recent flight-test discoveries, there was a high probability the first 747-8 Freighter delivery would move into 2011. According to Boeing the new delivery schedule follows a thorough assessment of the expected cumulative impact of these discoveries, which include a low-frequency vibration in certain flight conditions and an underperforming aileron actuator. While neither issue requires structural changes to the airplane, they have led to disruptions to certification testing, which the program was unable to offset within the prior schedule.
Copyright Photo: Nick Dean. Boeing 747-8R7F N5573S will become LX-VCC (msn 35807) for launch customer Cargolux Airlines International.
Atlas Air Worldwide Holdings (New York-JFK) confirmed that its 49%-owned UK subsidiary, Global Supply Systems Limited (GSS) (London-Stansted), has signed a five-year wet leasing agreement with British Airways Plc to operate three Boeing 747-8 freighters on behalf of British Airways starting in 2011.
Under this long-term aircraft, crew, maintenance and insurance (ACMI) outsourcing contract, GSS will provide a turnkey solution for British Airways’ cargo division, British Airways World Cargo (BAWC). GSS will lease the 747-8F aircraft that it will operate for BAWC from AAWW’s Atlas Air unit, which expects to take delivery of the aircraft from Boeing in early 2011.
Boeing 747-8KZF N5017Q (msn 36136) PAE (Nick Dean) (3rd 747-8F test aircraft), originally uploaded by Airliners Gallery.
Boeing (Chicago, Seattle, Wichita and Charleston) reported a second quarter net profit of $787 million, down from $998 million in the same quarter a year ago.
For the full report:
Copyright Photo: Nick Dean. While the 787 Dreamliner captures most of the headlines, the new 747-8 continues to move ahead too. Third test aircraft, 747-8KZF N5017Q (msn 36136) is pictured on the ramp at Everett (Paine Field).
Boeing 747-8KZF N5017Q (msn 36136) PAE (Nick Dean) (3rd 747-8F test aircraft), originally uploaded by Airliners Gallery.
Boeing (Chicago, Seattle, Wichita and Charleston) received expanded type inspection authorization (TIA) from the U.S. Federal Aviation Administration (FAA) for the 747-8 Freighter on June 11. This authorization clears the way for FAA personnel to participate in test flights and collect required data.
With the issuance of TIA, the 747 program is beginning expanded certification testing. During this phase of testing, the extremes of the flight envelope are explored. Testing conditions include operations in hot and cold weather as well as takeoffs and landings at high-altitude airports. In addition, over-speed conditions, hard landings and engine-out conditions are tested.
The entire flight-test program calls for a total of about 3,700 hours of ground and air testing. The first 747-8 Freighter delivery is planned for the fourth quarter of this year. The first customer is Cargolux.
Copyright Photo: Nick Dean. The third 747-8F test aircraft, Boeing 747-8KZF N5017Q (msn 36136) is seen at Everett (Paine Field).
Cargolux Airlines International (Luxembourg) is introducing a new livery with the delivery of the first new Boeing 747-8F. The cargo airline is the launch customer for the new type. The first Boeing 747-8 Freighter painted in Cargolux’s livery emerged from the Boeing paint hangar in Everett, WA on June 7. The cargo operator has a total of 13 Boeing 747-8 Freighters on order.
Boeing delivered the last Cargolux 747-400 Freighter with a unique transition paint scheme featuring fading stripes. The new livery on Cargolux’s 747-8 Freighter is an evolution from the current design and marks the start into a new era for the company.
“The design stands for continuity and commitment while confirming the fundamental principles that made Cargolux successful. The red, white and blue stripes symbolize the company’s roots in Luxembourg, its hub and home base,” said Ulrich Ogiermann, CEO of Cargolux. The new livery features a distinctive new red tail and an additional logo on the belly further promotes the brand.
Boeing will deliver the first 747-8 Freighter to Cargolux in the fourth quarter of this year.
Boeing 747-8KZF N5017Q (msn 36136) BFI (Joe G. Walker), originally uploaded by Airliners Gallery.
Boeing (Chicago, Seattle, Wichita and Charleston) has placed the second Boeing 747-8 Freighter, RC521, the pictured 747-8KZF N5017Q (msn 36136), landed in Palmdale, CA yesterday (April 19), marking the beginning of a planned transition of 747-8 Freighter testing to Southern California. The more than four-hour flight from Boeing Field in Seattle included testing on avionics and cruise performance.
The airplane will be stationed in Palmdale for the majority of its scheduled flight-test program. The crew will conduct several tests on the airplane with fuel-mileage and engine-performance testing as key focus areas.
A contingent of employees has been stationed at Palmdale for the testing, including flight-test engineers and the support personnel who prepare the airplane for each day’s flights. In the coming weeks, the two other 747-8 airplanes in the flight-test fleet will join RC521 in Southern California.
The entire flight-test program calls for the three airplanes to perform a total of about 3,700 hours of ground and air testing. The first 747-8 Freighter delivery to Cargolux is planned for the fourth quarter of this year.
Copyright Photo: Joe G. Walker. N5017Q is pictured at Seattle (Boeing Field-King County) prior to the departure to Palmdale.
Boeing’s (Chicago, Seattle, Wichita and Charleston) third 747-8 Freighter, RC 521 (N5017Q), successfully completed its first flight on March 17. It is the final test airplane scheduled to participate in the flight-test program for the 747-8 Freighter.
Piloted by Captains Paul Stemer and Keith Otsuka, with Ralph Chaffin serving as systems operator, RC 521 took off from Paine Field in Everett, WA, completed a two-and-a-half-hour flight and landed at Boeing Field in Seattle. The airplane reached an altitude of 30,000 feet (9,144 m) and an airspeed of 245 knots, or about 282 miles (454 km) per hour. It took off at 3:27 p.m. PDT and landed at 5:58 p.m.
RC 521 has several tests scheduled in the test program, including fuel-mileage testing. The 747-8 Freighter flight-test program calls for all three airplanes to perform approximately 3,700 hours of testing both on the ground and in the air. The first 747-8 Freighter delivery is planned for the fourth quarter of this year.
Boeing (Chicago, Seattle, Wichita and Charleston) has placed a second 747-8 Freighter, designated internally as RC 522, successfully completed its first flight on Sunday evening (March 14). The airplane took off from Paine Field in Everett, WA, for a two-and-a-half-hour flight and landed at King County-Boeing Field in Seattle.
Captain Kirk Vining was at the controls for the flight, with Rick Braun operating as co-pilot and Joel Conard serving as systems operator. The airplane reached an altitude of 27,000 feet (8,230 m) and an airspeed of 240 knots, or about 276 miles (444 km) per hour. It took off at 3:57 p.m. (1557) PDT and landed at 6:25 p.m (1825) PDT.