Category Archives: Atlas Air

Atlas Air’s contract with its pilots goes to arbitration

Atlas Air Pilots issued this statement:

Atlas Air pilots and the company’s management head into the final showdown on March 17 of a five-year battle for a new collective bargaining agreement. For the next two weeks, an arbitrator will listen to contract proposals from the pilots and management and then impose a contract that will decide the long-term future of the airline.


The pilots will present their case for a contract that is close to industry standards, while the company is expected to propose a contract that keeps pilot wages and benefits far below other cargo carriers. Industry insiders say that no matter what the arbitrator decides, the final outcome may have a negative long-term impact on the airline and its pilots.


“Atlas Air’s leadership team has squandered the past few years of growth, created discord with a key employee group, and has now surrendered its future to a third-party arbitrator.” said Robert Kirchner, head of the International Aviation Professionals (IAP), Teamsters Local 2750, the union that represents the pilots.


“This is a clear abdication of leadership,” said Kirchner. “We may now know the reason they provided no insights about the company’s future during the recent quarterly reporting to shareholders. They are no longer making decisions on key issues. Every stakeholder should be concerned that management is wiping their hands of responsibility.”


According to people sitting at the bargaining table, Atlas Air managers are likely to claim again that they don’t have the money to compensate their pilots adequately and that they will go bankrupt if they have to the pay wages and benefits that are comparable to what most of the industry pays. At the same time, these same Atlas executives have been making millions selling off Atlas stock that was part of their compensation packages.


“For the past five years, the company has delayed and gone to court to avoid negotiating seriously,” said Kirchner. “Atlas managers have refused to schedule more than four days per month for contract negotiations and then they have only showed up for a few hours and were disinterested and unprepared to negotiate.  All the while we have consistently offered to negotiate around the clock, any time and any place.”


“Atlas leadership has built up such frustration and anger in their most important employee group that morale is at an all-time low and attrition is extremely high, which costs Atlas millions in recruitment, training and missed flight opportunities. If we keep going in the same direction, Atlas will remain the training academy for UPS, FedEx and the rest of the airline industry,” said Kirchner.
No matter the outcome of arbitration, Atlas Air management has created a no-win situation for investors and the future of the airline. If the arbitration goes in the company’s favor, workforce discontent will soar.” said Kirchner. “You can’t grow an airline with high turnover and low morale of pilots.”


“Atlas continues to wage a battle with the people who fly planes, generate profits and make oversized executive compensation packages possible,” said Kirchner. “For five years, Atlas executives have squandered opportunities to reach a reasonable agreement through direct, good-faith negotiations and are now turning to arbitration to take responsibility for leadership out of the hands of the team that’s paid to lead.”

Atlas Air aircraft photo gallery:

Atlas Air aircraft slide show:


Atlas Air Worldwide orders four new Boeing 747-8 freighters, the last Boeing will build

Atlas Air Worldwide Holdings, Inc. announced today it has ordered four new Boeing 747-8 freighters in a transaction that furthers the company’s strategic growth plan. The aircraft will enable the company to meet strong customer demand in the airfreight market, particularly the fast-growing e-commerce and express sectors.

The company’s business model provides the flexibility to operate these new aircraft for customers or take advantage of dry-leasing opportunities through its Titan Aviation Leasing subsidiary.

The Boeing 747-8 freighter is the most capable, technologically advanced and environmentally conscious widebody freighter. The 747-8F provides 20% higher payload capacity and 16% lower fuel consumption than the very capable 747-400F, and has 25% higher capacity than the new-technology 777-200LRF. It is also the only factory-built freighter with nose-loading capability in production, which will serve the long-term needs of the airfreight market. Atlas is the world’s largest operator of Boeing 747 freighter aircraft, with a total of 53 in its current fleet, including 10 747-8Fs, 34 747-400Fs, five passenger 747-400s, and four Large Cargo Freighters (LCFs).

Atlas’ investment in these new aircraft underscores its ongoing commitment to environmental stewardship through the reduction of noise, aircraft emissions and resource consumption. The 747-8F meets or exceeds the strictest International Civil Aviation Organization (ICAO) emissions standards and meets global noise regulations with unlimited deployment. The advanced engines on the 747-8F reduce noise by approximately 30% compared to the previous generation of aircraft.

The new 747-8F order will also provide the company with enhanced flexibility to balance future capacity needs with customer demand, as a number of its legacy 747-400F aircraft leases will be up for renewal over the next several years.

The 747-8Fs are expected to be delivered from May through October 2022. These aircraft are the last four 747-8Fs that Boeing plans to produce.

Atlas Air has 53 747s in its current fleet, making it the largest 747 operator in the world.

Atlas Air aircraft photo gallery:

Atlas Air aircraft slide show:

NTSB Board Meeting: Atlas Air flight 3591 cargo plane crash

From NTSB:

The National Transportation Safety Board determined during a public board meeting held Tuesday that Atlas Air flight 3591 crashed in Trinity Bay, Texas, because of the first officer’s inappropriate response to an inadvertent activation of the airplane’s go-around mode, resulting in his spatial disorientation that led him to place the airplane in a steep descent from which the crew did not recover.

The accident happened Feb. 23, 2019, when the Atlas Air Boeing 767 cargo jet entered a rapid descent from about 6,000 feet and impacted a marshy bay about 40 miles from Houston’s George Bush Intercontinental Airport. The captain, first officer and a non-revenue, jumpseat pilot, died in the crash. The airplane – which was carrying cargo from Miami to Houston for Services LLC., and the US Postal Service – was destroyed. The first officer was the pilot flying the airplane at the time of the accident.

The NTSB also determined the captain’s failure to adequately monitor the airplane’s flightpath and to assume positive control of the airplane to effectively intervene contributed to the crash. Also cited as a contributing factor is the aviation industry’s selection and performance measurement practices that failed to address the first officer’s aptitude related deficiencies and maladaptive stress response.


The NTSB concluded the first officer likely experienced a pitch-up somatogravic illusion – a specific kind of spatial disorientation in which forward acceleration is misinterpreted as the airplane pitching up – as the airplane accelerated due to the inadvertent activation of the go-around mode, which prompted the first officer to push forward on the elevator control column. The first officer subsequently believed the airplane was stalling and continued to push the control column forward, exacerbating the airplane’s dive. However, no cues consistent with an aerodynamic stall —such as stick shaker activation, stall warning annunciations, nose-high pitch indications or low airspeed indications—were present. Additionally, the NTSB’s airplane performance study found the airplane’s airspeed and angle of attack were not consistent with having been at or near a nose-high stalled condition. The first officer’s response was contrary to standard procedures and training for responding to a stall. Graphic depicting of the descent of Atlas Air flight 3591 before final impact on Feb. 23, 2019. (Graphic depicting of the descent of Atlas Air flight 3591 before final impact on Feb. 23, 2019. NTSB Graphic)

The NTSB concluded that while the captain, as the pilot monitoring, was setting up the approach to Houston and communicating with air traffic control, his attention was diverted from monitoring the airplane’s state and verifying that the flight was proceeding as planned. This delayed his recognition of, and his response to, the first officer’s unexpected actions that placed the plane in a dive. Investigators also concluded the captain’s failure to command a positive transfer of control of the airplane as soon as he attempted to intervene on the controls enabled the first officer to continue to force the airplane into a steepening dive.

While the first officer took deliberate actions to conceal his history of performance deficiencies, Atlas’ reliance on designated agents to review pilot background records and to flag significant concerns was inappropriate and resulted in the company’s failure to evaluate the first officer’s unsuccessful attempt to upgrade to captain at his previous employer. Additionally, the NTSB found that had the FAA met the deadline and complied with the requirements for implementing the pilot records database as stated in Section 203 of the Airline Safety and Federal Aviation Administration Extension Act of 2010, the pilot records database would have provided hiring employers relevant information about the first officer’s employment history and long history of training performance deficiencies.

“The first officer in this accident deliberately concealed his history of performance deficiencies, which limited Atlas Air’s ability to fully evaluate his aptitude and competency as a pilot,” said NTSB Chairman Robert Sumwalt. “Therefore, today we are recommending that the pilot records database include all background information necessary for a complete evaluation of a pilot’s competency and proficiency.”

An abstract of the final report, which includes the findings, probable cause, and all safety recommendations, is available at Links to the accident docket and other publicly released information about this investigation are available at

The final report for the investigation of the accident is expected to post to the NTSB website in the next few weeks.

Want to fly on a Boeing 747-400? – Hurry up, your options are narrowing

Large wide body airliners (like the Airbus A380 and Boeing 747) have been hard to fill for airlines since the COVID-19 pandemic exploded around the world this spring. Many airlines have parked their Jumbos and some have moved up the planned retirement dates of the Boeing 747-400.

If you want to fly on the passenger type you better hurry. Other than governments and cargo operators, finding a passenger Boeing 747-400 flight is a challenge right now.

Some aircraft in storage will probably become active again when the passenger demand dictates the use of large wide body aircraft again. If the demand does not come back quickly it will probably mean the end of those aircraft in storage.

Above Photos: Boeing.

Below is the current situation based on the latest information for passenger airlines (corrections and additions are always welcome) (subject to change depending on returning traffic):

Air Atlanta Icelandic – The charter and ACMI specialist airline has five passenger 747-400s. Three are currently stored and two are operating on ACMI assignments.

Air Atlanta Icelandic Boeing 747-412 TF-AMI (msn 27066) LGW (Antony J. Best). Image: 928104.

Above Copyright Photo: Air Atlanta Icelandic Boeing 747-412 TF-AMI (msn 27066) LGW (Antony J. Best). Image: 928104.

Air China – Two 747-400s are operational (B-2445 and B-2447) but they stay mostly in China these days. Another aircraft (B-2472) is operated for the government. Air China also continues to operate the newer 747-800.

2 operational (B-2445 and B-2447) + 1 VIP (B-2472)

Above Copyright Photo: Air China Boeing 747-4J6 B-2445 (msn 25882) JFK (Ken Petersen). Image: 902765.

Asiana Airlines – Only one 747-400 passenger aircraft (HL7428) is active these days so the type is probably ready to be retired this year.

Passenger version being retired by Asiana, down to one aircraft (HL7428)

Above Copyright Photo: Asiana Airlines Boeing 747-48E HL7428 (msn 28552) LAX (Michael B. Ing). Image: 910887.

Atlas Air – The charter and ACMI specialist airline currently has three active passenger 747-400s (N464MC, N465MC and N480MC). Assuming charter demand continues this airline could be one of the last passenger operators.

Atlas Air Boeing 747-446 N465MC (msn 24784) LAX (Michael B. Ing). Image: 921869.

Above Copyright Photo: Atlas Air Boeing 747-446 N465MC (msn 24784) LAX (Michael B. Ing). Image: 921869.

British Airways – The former largest 747-400 passenger operator has stored all 28 aircraft pending a return of passenger demand. For now, G-CIVO operated the last revenue flight (BA9116 LOS-LHR) on May 11, 2020.

British Airways Boeing 747-436 (Tails) LHR (Dave Glendinning). Image: 908409.

Above Copyright Photo: British Airways Boeing 747-436 (Tails) LHR (Dave Glendinning). Image: 908409.

KLM Royal Dutch Airlines – As previously reported, PH-BFT operated the last regular revenue flight (KL686 MEX-AMS) on March 29, 2020. However the Jumbo was brought out of retirement to operate special medical cargo flights (along with PH-BFV and PH-BFW) during the pandemic. All 3 are expected to be re-retired again this year.

Type Retired: March 29, 2020 (flight KL686 MEX-AMS with PH-BFT)

Above Copyright Photo: KLM Royal Dutch Airlines Boeing 747-406 PH-BFT (msn 28459) (100 Years) AMS (Ton Jochems). Image: 949485.

Lufthansa – The company was originally planning to retire the 747-400 fleet in 2025. That all changed with the pandemic. All 8 that remain operational are now in storage pending a return of passenger demand. D-ABVX operated the last 747-400 passenger revenue flight (LH637 RUH-FRA) on May 8, 2020.

8 stored. For now last revenue flight: May 8, 2020: LH637 RUH-FRA with D-ABVX.

Above Copyright Photo: Lufthansa Boeing 747-430 D-ABTK (msn 29871) YYZ (TMK Photography). Image: 938088.

Rossiya Russian Airlines – The Russian carrier parked all nine of its Boeing 747-400s. EI-XLF operated the last revenue flight (FV5876 HKT-SVO) on March 29, 2020.

Rossiya Airlines Boeing 747-446 EI-XLF (msn 27645) AYT (Ton Jochems). Image: 943781.

Above Copyright Photo: Rossiya Airlines Boeing 747-446 EI-XLF (msn 27645) AYT (Ton Jochems). Image: 943781.

Wamos Air – The Spanish carrier has four active Boeing 747-400s. The carrier is planning to operate the type until 2023 but this could change with lower demand.

Wamos Air Boeing 747-412 EC-KSM (msn 27178) ARN (Stefan Sjogren). Image: 937680.

Above Copyright Photo: Wamos Air Boeing 747-412 EC-KSM (msn 27178) ARN (Stefan Sjogren). Image: 937680.

Boeing 747-400 Photo Gallery.

Recent 747-400 fleet retirements:

Air India – Four 747-400s are parked and not likely to return. VT-ESO operated the last revenue flight (AI966 HYD-BOM) on March 15, 2020.

China Airlines – Four passenger 747-400s are in storage and are not likely to return. B-18215 operated the last revenue flight (CI916 HKG-TPE) on March 15, 2020.

Corsair International – The French carrier parked its three passenger Boeing 747-400s in March and they are not likely to return. F-GTUI operated the last revenue flight (S5 927 PTP-ORY) on March 26, 2020,

El Al Israel Airlines – 4X-ELC operated the last passenger 747-400 revenue flight (LY1747 FCO-TLV) on November 3, 2019.

Iraqi Airways – The last passenger Boeing 747-400 (YI-ASA) operated the last revenue flight (IA3114, MED-BGW) on February 2, 2020.

Korean Air – HL7402 operated the last 747-400 passenger revenue flight (KE630 DPS-ICN) on February 29, 2020. Korean Air continues to operate the newer 747-800.

Mahan Air – The Iranian airline was recently again operating EP-MNB (February 2020) but it appears to be no longer flying, probably due to the embargo.

QANTAS Airways – The flag carrier decided to early retire the type due to a much lower demand. VH-OEE operated the last revenue flight (QF28 SCL-SYD) on March 29, 2020.

Thai Airways International – The flag carrier is in reorganization and is cutting costs and reducing aircraft types. HS-TGA operated the last 747-400 revenue flight (TG476 SYD-BKK) on March 26, 2020.

Virgin Atlantic Airways – G-VROS operated the last revenue flight (VS608 LAX-LHR) on March 31, 2020.

Poll. Who do you think will be the last Boeing 747-400 passenger airline operator?

Prime Air promotes Jack Ryan on Prime Video on N1049A

Promoting Jack Ryan series on Prime Video

Prime Air Boeing 767-36N ER (F) N1049A (msn 30109), operated by Atlas Air, is now promoting Tom Clancy’s Jack Ryan series on Prime Video with a special livery.

From Wikipedia:

Tom Clancy’s Jack Ryan, or simply Jack Ryan, is an American political thriller spy web televisionseries, based on characters from the fictional “Ryanverse” created by Tom Clancy, that premiered on August 31, 2018 on Prime Video. The series was created by Carlton Cuse and Graham Roland. Cuse serves as an executive producer alongside John Krasinski, Michael Bay, and Mace Neufeld, among others. Krasinski also stars in the series as the title character, making him the fifth actor to portray the character after Alec Baldwin, Harrison Ford, Ben Affleck, and Chris Pine from the film series.

In April 2018, Amazon renewed the series for its second season which premiered on October 31, 2019. In February 2019, Amazon renewed the series for a third season.

N1049A is pictured arriving at Ontario, CA.


Copyright Photo: Prime Air (Atlas Air) Boeing 767-36N ER (F) N1049A (msn 30109) (Tom Clancy’s Jack Ryan) ONT (Michael B. Ing). Image: 948661.


Atlas Air to operate two Boeing 747-8F freighters for QANTAS Freight

QANTAS Airways has made this announcement:

QANTAS Freight has welcomed a new addition to its fleet with the first of two Boeing 747-8F freighter aircraft touching down in Sydney today.

The next generation freighters will be operated by Atlas Air, on behalf of QANTAS. Each aircraft offers 20 percent more freight capacity and space for seven extra cargo pallets compared to the 747-400F.

The two freighters will operate between Australia, China and the USA with additional routes currently being explored. The second 747-8F aircraft will enter service later this week.

While the aircraft will be painted in Atlas Air livery, the QANTAS Freight logo will be displayed on either side of the nose and underneath the freighters’ nose cargo door.

The 747-8’s iconic nose door allows easier loading of oversized cargo and helps achieve faster turnaround times.

The arrival of the new aircraft follows QANTAS Freight’s announced of a new seven-year agreement with Australia Post to enhance the domestic network. The new agreement, worth more than $1 billion, also paves the way for up to three A321 passenger to freighter aircraft join the fleet from October 2020.

Atlas Air Boeing 767-300F flight 5Y 3591 with N1217A crashes on approach to Houston (IAH)

Atlas Air Boeing 767-375 ER N1217A (see below) has crashed into Trinity Bay near Houston. The freighter was en route from Miami to Houston (IAH) as flight 5Y 3591 when it went into a steep dive. The aircraft was being operated for Amazon Prime Air. There were three crew members on board. There are no survivors according to the Chambers County Sheriff.

The aircraft crashed before 12:45 pm CT according to the FAA. There was no distress call to the FAA ATC.

Human remains has now been located at the site.

Atlas Air Worldwide issued this statement:

As was previously reported Atlas Air flight 3591 was involved in an accident earlier today. Three people were on board at the time.

At this stage a search investigation is underway.  In the meantime, we are providing all possible information to the families and loved ones of those on board.

The flight from Miami to Houston was a cargo flight operated by Atlas Air on behalf of Amazon.

We have activated our emergency response plans and we will be sending a specialist team to the crash site.

Everyone within the company is deeply saddened by this event. Our main priority at this time is caring for those affected and we will ensure we do all we can to support them now and in the days and weeks to come. We  have a call center available for media inquiries the number is + 1 407 205 1814.

We are now working with the emergency services and other agencies to establish the circumstances around exactly what happened. Further updates will be available on our website.

Here is the statement from the FAA:

There was a line of thunderstorms in front of the aircraft as it approached IAH.

The Chambers County Sheriff’s Office made this announcement:

The plane has been located in Jack’s Pocket at the north end of Trinity Bay.

More from Channel 2 in Houston: CLICK HERE

More from KHOU11: CLICK HERE

Below Copyright Photo: Prime Air (Atlas Air) Boeing 767-375 ER (F) WL N1217A (msn 25865) ONT (Arnd Wolf). Image: 945755.

Crashed on approach to Houston (IAH) on February 23, 2019


Atlas Air to operate a Boeing 747-400F for SF Express

Atlas Air Boeing 747-45EF N485MC (msn 30607) HHN (Rainer Bexten). Image: 942851.

Atlas Air Worldwide Holdings, Inc. has announced that its Atlas Air, Inc. unit has entered into an aircraft transportation services agreement to operate a Boeing 747-400 Freighter for SF Express, China’s leading express service provider, to enhance operating capability between China and the United States.

Atlas Air will operate the aircraft on behalf of SF Express on key global routes across the fast-growing transpacific market, connecting China with the United States. The aircraft is an incremental unit in Atlas Air’s fleet in response to customer demand and will enter into service in October 2018.

Top Copyright Photo (all others by Atlas Air): Atlas Air Boeing 747-45EF N485MC (msn 30607) HHN (Rainer Bexten). Image: 942851.

Atlas Air aircraft slide show:


Atlas Air Worldwide announces guaranteed interview program for pilots at GoJet Airlines

Atlas Air Worldwide Holdings, Inc. today said that its Atlas Air, Inc. unit and GoJet Airlines have entered an agreement guaranteeing GoJet pilots an interview with Atlas after as little as one to two years of service. First Officers with military flying experience will be eligible to interview with Atlas after just one year of service at GoJet, while all other pilots will be eligible to interview after a minimum of two years of service.

The world’s largest operator of modern Boeing 747 all-cargo aircraft, Atlas Air Worldwide is widely recognized as a leading global provider of outsourced aircraft and aviation operating services. With a focus on express, e-commerce and fast-growing markets, the company is in an era of significant business growth and development, with opportunities to expand its cargo and passenger operations with existing customers and with new ones.

“This agreement opens the door for GoJet pilots to potentially fly the Boeing 747 or 767, among the most storied aircraft in aviation history,” added GoJet Director of Flight Operations Randy Bratcher. “The opportunity to join the Atlas team and operate big Boeings all over the world is a very attractive career move for our pilots.”

Current GoJet pilots with the requisite time in service may immediately opt-in to the Atlas guaranteed interview program, while new GoJet pilots may do so as soon as time-in-service requirements are met.

With GoJet mentoring and a guaranteed interview, pilots invited to join Atlas can look forward to advancing their careers with a growing global air carrier, the opportunity to fly wide-body Boeing aircraft, and airline transportation to and from their base.

All photos by Atlas Air and GoJet Airlines.

Atlas Air Worldwide reports record fourth quarter results, strong outlook for 2018, will add four more Boeing 747-400s

Airline Color Scheme - Introduced 2000

Atlas Air Worldwide Holdings, Inc. has announced record fourth quarter and full-year 2017 revenue, record fourth-quarter earnings and robust full-year earnings growth, and a continued strong outlook in 2018.

“2017 was an exciting year for Atlas and we expect that to continue in 2018,” said President and Chief Executive Officer William J. Flynn.

“The strategic initiatives that we have put in place over many years have transformed our company. Our focus on express, e-commerce and fast-growing Asian markets has broadened our customer base and fleet. As a result, we were well-positioned to capitalize on market dynamics and deliver fourth-quarter and full-year volumes, revenues, EBITDA and net income that grew sharply compared to the prior-year.

“In addition, our fourth quarter and full-year results benefited from the passage of the U.S. Tax Cuts and Jobs Act in late December, which generated a significant gain related to the revaluation of our net deferred tax liabilities.

“We expect the new tax legislation to have a positive impact on economic activity and corporate growth. On passage of the law, we were pleased to provide a one-time bonus of $1,000 to our global personnel in recognition of their hard work and commitment to the company’s growth.”

Turning to 2018 and beyond, Mr. Flynn stated: “We are operating in a strong airfreight environment, underpinned by global economic growth.

“We see tremendous opportunity for continued growth in the express and e-commerce markets, fueled by a bourgeoning middle class with higher levels of disposable income. Further globalization will require expansive and time-definite air networks to facilitate the international flow of goods.

“From a regional perspective, we believe Asia is key. It is an important geography to global trade, the source of 40% of global airfreight demand, and the main contributor to the expanding global middle class.

“In addition to the demand we are seeing for our aircraft and services, we are capitalizing on the quality, scale and scope of our operations to drive our revenues and earnings to greater levels. As a result, we expect our adjusted net income to grow by a mid-twenty-percent level in 2018 compared with 2017, including the benefit of a lower corporate income tax rate.

“By comparison, even without any benefit from tax reform, we would have expected our 2018 adjusted net income to grow by a teens percentage.”

Fourth-Quarter Results

Volumes in the fourth quarter of 2017 increased 18% to 71,563 block hours, with revenue growing 19% to a record $628.0 million.

Reported income from continuing operations, net of taxes, during the period totaled $209.5 million, or $6.71 per diluted share, compared with $28.7 million, or $1.12 per diluted share, in the fourth quarter of 2016. Reported results for the latest quarter included a $130.0 million benefit related to the revaluation of our deferred tax liabilities as well as an unrealized gain on outstanding warrants of $23.7 million. Results in the year-ago period included an unrealized loss of $27.9 million on outstanding warrants.

On an adjusted basis, income from continuing operations, net of taxes, in the fourth quarter of 2017 increased 13% to a record $66.6 million, or $2.43 per diluted share, from adjusted income of $59.0 million, or $2.24 per diluted share, in the year-ago quarter. EBITDA, as adjusted, increased 14% to $162.7 million.

Record ACMI segment revenues and contribution in the fourth quarter of 2017 were primarily driven by significant growth in block-hour volumes, partially offset by higher line maintenance and labor-related operational disruptions. Block-hour growth during the period reflected 747-400 flying for several new customers, 747-8 flying for Cathay Pacific Cargo, additional seasonal flying for express operators, and the ramp-up of 767-300 operations for Amazon. Five new 767-300s were placed in service for Amazon during the quarter, raising the current number to 12, in line with our expectations when we began ramping up this new service in 2016 and in line with our expectations for a total of 20 aircraft by the end of 2018.

Prime Air (Atlas Air) Boeing 767-36N ER (F) N1093A (msn 30111) ONT (Michael B. Ing). Image: 937468.

Above Copyright Photo: Prime Air (Atlas Air) Boeing 767-36N ER (F) N1093A (msn 30111) ONT (Michael B. Ing). Image: 937468.

Prime Air-Atlas Air aircraft slide show:

Higher Charter segment contribution during the period was primarily driven by an increase in commercial yields, partially offset by higher maintenance costs, the redeployment of 747-8 and 747-400 aircraft to the ACMI segment, and labor-related operational disruptions. Higher average rates during the quarter primarily reflected the impact of strong commercial yields.

In Dry Leasing, higher segment contribution primarily reflected a reduction in interest expense due to the scheduled repayment of debt related to dry leased 777 aircraft and the placement of additional 767-300 converted aircraft.

Reported earnings in the fourth quarter of 2017 also included an effective income tax benefit rate of 95.7%, due mainly to the revaluation of our deferred tax liabilities as a result of the Tax Cuts and Jobs Act. On an adjusted basis, our results reflected an effective income tax rate of 31.4%.

Full-Year Results

Volumes in 2017 increased 20% to 252,802 block hours, with revenue growing 17% to a record $2.16 billion.

For the twelve months ended December 31, 2017, our continuing operations generated income of $224.3 million, or $8.68 per diluted share, which included the $130.0 million benefit related to the revaluation of our deferred tax liabilities, partially offset by an unrealized loss on financial instruments of $12.5 million related to outstanding warrants. For the twelve months ended December 31, 2016, our income from continuing operations totaled $42.6 million, or $1.70 per diluted share, including the negative impacts of transaction-related expenses and warrant accounting totaling $25.0 million.

On an adjusted basis, income from continuing operations in 2017 increased 17% to $133.7 million, or $4.93 per diluted share, compared with $114.3 million, or $4.50 per diluted share, in 2016. EBITDA, as adjusted, rose 12% to $428.6 million.

Reported earnings in 2017 also included an effective income tax benefit rate of 56.5%, due mainly to the revaluation of our deferred tax liabilities as a result of the Tax Cuts and Jobs Act. On an adjusted basis, our results reflected an effective income tax rate of 28.4%.

Cash and Short-Term Investments

At December 31, 2017, our cash, cash equivalents, short-term investments and restricted cash totaled $305.5 million, compared with $142.6 million at December 31, 2016.

The change in position resulted from cash provided by operating and financing activities, partially offset by cash used for investing activities.

Net cash provided by financing activities during 2017 primarily reflected proceeds from our issuance of convertible notes and our financings of 767-300 aircraft, partially offset by payments on debt obligations. During the fourth quarter of 2017, we completed the financings of six additional 767-300 aircraft, which generated cash of $145.8 million.

Net cash used for investing activities during 2017 primarily related to capital expenditures and payments for flight equipment and modifications, including the acquisition of 767-300 aircraft to be converted to freighter configuration, spare engines and GEnx engine performance upgrade kits.

2018 Outlook

We expect to report strong earnings growth in 2018.

We begin 2018 with solid demand from our customers for our aircraft and services. With the essential building blocks we have set in place, we see opportunities to grow with existing customers and to add new ones.

Globally, economic activity is expanding. The airfreight market is strong, and airfreight tonnage continues to grow from record levels.

As a result, we expect significant growth in our volumes, revenue and adjusted EBITDA in 2018. We see volumes rising to around 300,000 block hours, revenue growing to approximately $2.5 billion, and adjusted EBITDA of about $500 million.

We anticipate that our full-year 2018 adjusted net income will grow by a mid-twenty-percent level compared with 2017, including the benefit of tax reform. Without tax reform, we would have expected our adjusted net income to grow by a teens percentage this year. We expect our full-year 2018 adjusted income tax rate to be approximately 17%.

Given the inherent seasonality of airfreight demand, we anticipate that results in 2018 will reflect historical patterns, with more than 70% of our adjusted net income occurring in the second half. In addition, we expect adjusted EBITDA of approximately $90 million in the first quarter of 2018, and adjusted net income to be approximately double adjusted net income of $8.3 million in the first quarter of 2017.

For the full year, we anticipate total block hours will increase approximately 19% compared with 2017, with about 75% of our hours in ACMI and the balance in Charter. To meet the anticipated increase in ACMI and Charter demand, we have entered into operating leases for six Boeing 747-400 freighter aircraft. Two of these aircraft entered service in the third quarter and fourth quarter of 2017; four will enter service throughout 2018.

Aircraft maintenance expense in 2018 is expected to total approximately $315 million, mainly reflecting an increase in daily line maintenance due to the anticipated growth in block hours. Depreciation and amortization is expected to total approximately $220 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are expected to total approximately $100 to $110 million, mainly for parts and components for our fleet.

Top Copyright Photo: Atlas Air Boeing 747-47UF N415MC (msn 32837) ANC (Michael B. Ing). Image: 925067.

Atlas Air aircraft slide show: