Category Archives: Air Transport Services Group

ATSG reports 1Q net earnings of $8.5 million

Air Transport Services Group, Inc. (ATSG) (Wilmington, OH), the parent of ABX Air (Wilmington, OH) and ATI-Air Transport International (Little Rock and Wilmington, OH) reported consolidated financial results for the quarter ended March 31, 2013.

“We made a major investment in our combi business with the U.S. military, placed more of our Boeing 767 and 757 freighters with DHL, and completed the merger of two of our airlines during the first quarter,” said Joe Hete, President and Chief Executive Officer of ATSG. “The results were significant increases in our net income and in our Adjusted EBITDA, compared with the year-earlier quarter. Our baseline business remains solid, and we are moving quickly to capture the rest of the $5 to $6 million in merger synergies we projected a few months ago.”

For the first quarter of 2013, compared with first quarter 2012:

  • Revenues were $143.3 million, a decrease of 1.5%.
  • Total operating expenses were $126.9 million, down 3.7%, including a $3.8 million reduction in salaries, wages and benefits expense due in large part to reductions in airline related costs prior to the merger of Air Transport International and Capital Cargo International Airlines in March 2013.
  • Pre-tax income was $13.6 million, an increase of 26.5%.
  • Net earnings from continuing operations increased 27.6% to $8.5 million, or $0.13 per fully diluted share. Net earnings include a non-cash federal income tax provision. The company does not expect to pay significant federal income taxes until 2015.
  • First-quarter Adjusted EBITDA was $37.3 million, a 9.5% increase from $34.1 million in the same period of the prior year. This non-GAAP financial measure is defined and reconciled to comparable GAAP results in a table at the end of this release.
  • Capital expenditures totaled $59.4 million for the quarter, including the purchase of two 757-200 combi aircraft.

Segment Results

CAM (Aircraft Leasing)

CAM First Quarter
($ in thousands) 2013 2012 % Chg.
Revenues $ 38,969 $ 37,851 3.0
Pre-Tax Earnings 16,873 16,818 0.3

Fleet Developments:

  • On March 31, 2013, ATSG owned 47 aircraft in serviceable condition – 20 leased to external customers and 27 leased to ATSG affiliate airlines.
    • The in-service fleet consisted of forty-one 767 freighters, three 757 freighters and three DC-8 combis. A table reflecting aircraft in service is included at the end of this release.
  • On March 31, 2012, CAM owned 51 in-service aircraft, including thirty-nine 767s, three 757s, six DC-8s (two freighters, four combis) and three 727 freighters. All of the 727 and DC-8 freighters, one DC-8 combi and one 767 passenger aircraft have since been removed from service.
  • Three other aircraft – two 767-300s and one 757-200 – were undergoing passenger-to-freighter conversion as of March 31, 2013.
  • Four 757-200 combi aircraft, including one modified in 2012, one purchased in December 2012 and two purchased in January 2013, are completing certification requirements. They will enter service for the U.S. military as replacements for the three remaining DC-8 combis starting later this quarter.

ACMI Services

ACMI Services First Quarter
($ in thousands) 2013 2012 % Chg.
Revenues
Airline services $ 94,892 $ 96,342 (1.5)
Reimbursables 18,159 16,853 7.7
Total ACMI Services Revenues 113,051 113,195 (0.1)
Pre-Tax Loss (5,404 ) (8,215 ) 34.2

Significant Developments:

  • Signed agreements with DHL in January for four additional freighters, including one 757 and three 767s, to replace the 727 freighters the company operated in DHL’s U.S. domestic network.
  • Extended agreements for three 767s operating in DHL’s network in the Mideast.
  • Airline-related headcount in the first quarter decreased approximately 26% compared with the beginning of 2012, principally as a result of combining ATI and CCIA operations prior to their merger in March.
  • Four 767 freighters leased from CAM were underutilized during the quarter.

Other Activities

Other Activities First Quarter
($ in thousands) 2013 2012 % Chg.
Revenues $ 26,254 $ 28,421 (7.6 )
Pre-Tax Earnings 2,181 2,001 9.0
  • Improved first quarter pre-tax earnings were driven by greater efficiencies and higher volumes at the U.S. Postal Service facilities we operate.

Copyright Photo: Tony Storck. The three remaining McDonnell Douglas DC-8s in service have been delayed in their retirements until later this year as newer aircraft come on line. A fine study of DC-8-62 (F) N41CX (msn 46129) arriving at Baltimore/Washington.

ABX Air: AG Slide Show

ATI: AG Slide Show

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Air Transport Services Group adds more contracts and aircraft

Air Transport Services Group, Inc. (Wilmington, OH) today reported the launch of new freighter service within Asia, across the Atlantic, and within North America, along with customer commitments for more Boeing 767 widebody freighters, including advanced 767-300s.

Additional air cargo service for ATSG customers includes the following:

On November 1, ABX Air flight crews began operating one of the company’s Boeing 767-200 freighters in Asia for JAL-Japan Airlines (Tokyo) under an ACMI agreement that requires the reimbursement of ABX Air’s costs if cancelled within the first two years. This Aircraft, Crew, Maintenance and Insurance (ACMI) agreement is related to JAL’s support of DHL customers in Asia.

On November 1, ATI-Air Transport International (Little Rock) began new DC-8 freighter service for BAX Global between the U.S. and several destinations in Mexico.

Also this week, Capital Cargo International Airlines (Orlando) added a Boeing 727 freighter to BAX Global’s U.S. network.

Later this month, ABX Air will begin daily transatlantic ACMI service for DHL between the United Kingdom and the U.S., via a Boeing 767-300 freighter that ABX Air has leased from a third party under a 45-month agreement.

Last month, ABX Air flight crews began operating the first of up to four additional Boeing 767-200 freighters in DHL’s U.S. network under terms of the existing Crew, Maintenance and Insurance (CMI) agreement between DHL and ABX Air. These DHL-owned aircraft are in addition to 13 767-200s that DHL has committed to lease from ATSG’s Cargo Aircraft Management (CAM), and which will also be operated in the U.S. by ABX Air crews under the CMI agreement.

Amerijet today exercised the first of three options for a 767-200 for a seven-year dry lease, to be effective in January 2011. Amerijet currently leases two 767-200 aircraft from CAM.

Copyright Photo: Bruce Drum. Please click on the photo for additional details.