Category Archives: Prime Air

Amazon Air is now operating to Miami

Miami International Airport is now part of Amazon Air’s (Prime Air) cargo flight operations. The company has launched double-daily freighter service at MIA to destinations across the U.S. The new cargo service is being operated by Atlas Air Worldwide with Boeing 767-300F aircraft, and includes an onsite facility to sort packages bound for their next destination.

Amazon already operates four warehouses in Miami-Dade County, all within 12 miles of MIA – the largest of which is a new 885,000-square-foot fulfillment center at Miami-Opa locka Executive Airport just completed this year.

Amazon Air’s launch comes nine months after Miami-Dade Aviation Department (MDAD) officials hosted its first e-Commerce strategy workshop with more than 30 local air cargo industry stakeholders, with the goal of establishing Miami-Dade County as one of the world’s leading e-commerce hubs. Market research firm eMarketer forecasts Latin America to be a strong e-commerce growth region during that span, with a projected doubling of annual sales from $47.4 billion in 2015 to $84.8 billion in 2019. MIA is America’s busiest airport for international freight and handles more freight to Latin America and the Caribbean than any other U.S. airport.

Amazon Air will operate two daily flights.

Photo: MIA.

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“Go Gold” special livery introduced on ATI’s N313AZ to fight childhood cancer

ATI (Air Transport International), which operates for Amazon Prime Air, has adorned its Boeing 767-338 ER (F) N313AZ (msn 24930) in a special “Go Gold” livery (left side only) to promote childhood cancer awareness.

2018 "go gold" special markings to promote awareness of childhood cancer

This special livery is a vinyl wrap that was applied at ATI’s hub in Wilmington, OH.  The aircraft was flown to SeaTac on Sunday for finishing touches and then flown to BFI on Labor Day.

The special livery is expected to survive for about 30 days.

Copyright Photos: Prime Air (ATI) Boeing 767-338 ER (F) N313AZ (msn 24930) (go gold) BFI (Joe G. Walker). Image: 943407.

ATI-Prime Air aircraft slide show:

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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:

Prime Air becomes Amazon Air, fleet grows to 32 aircraft, headed to 40

Prime Air (ATI) Boeing 767-338 ER (F) N307AZ (msn 28725) ONT (Michael B. Ing). Image: 937302.

Prime Air (Seattle) is shortening its name to Amazon Air. In its holiday season recap report, Amazon announced it “celebrated its biggest holiday season” in 2017.

The growing dedicated fleet of Boeing 767-300s helped the company deliver a new record of packages this past holiday.

Amazon also announed Amazon Prime Air is now called Amazon Air. The fleet is now expected to take on new titles.

Amazon also announced the dedicated fleet had grown from 25 Boeing 767-300 freighters in July 2017 to 32 for this past holiday season. Amazon expects this number to grow to 40 by the end of this year.

Atlas Air and ATI (above) are the two main operators of the Amazon Air fleet of dedicated 767s.

Amazon is building a new cargo hub at Cincinnati/Northern Kentucky International Airport to handle the growing fleet. The companies flying the aircraft will need more pilots to fly the packages.

Top Copyright Photo: Prime Air (ATI) Boeing 767-338 ER (F) N307AZ (msn 28725) ONT (Michael B. Ing). Image: 937302.

Prime Air – ATI aircraft slide show:

However this growth is also leading to some labor issues especially with the pilots assigned to fly the deliveries. One union representing air cargo pilots has established a new website called canamazondeliver.com.

The union also issued this video:

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Atlas Air and Polar Air Cargo are granted an injunction against its pilots

Prime Air (Atlas Air) Boeing 767-306 ER (F) N1321A (msn 27957) ONT (Michael B. Ing). Image: 939323.

Atlas Air has issued this statement:

Atlas Air, Inc. and Polar Air Cargo Worldwide, Inc., subsidiaries of Atlas Air Worldwide Holdings, have learned that their request for a preliminary injunction against the International Brotherhood of Teamsters, the International Brotherhood of Teamsters, Airline Division, and Local Union No. 1224 has been granted.

The decision by the U.S. District Court for the District of Columbia requires the IBT to meet its obligations under the Railway Labor Act and stop its illegal and intentional work slowdown.

In granting the Company’s request, the Court further ordered the IBT to take affirmative action to prevent and to refrain from continuing any form of interference with the Company’s operations or any other concerted refusal to perform normal pilot operations consistent with the status quo, in violation of the RLA.

The Company continues to negotiate with the IBT for a joint contract for Atlas and Southern Air crewmembers in connection with the pending merger. The Company remains committed to completing the bargaining process in a timely manner and in the best interests of all parties.

Copyright Photo: Atlas Air is operating for Amazon’s Prime Air. Prime Air (Atlas Air) Boeing 767-306 ER (F) N1321A (msn 27957) ONT (Michael B. Ing). Image: 939323.

Prime Air:

Prime Air is unveiled in Seattle on August 5, 2016

Prime Air is unveiled in Seattle on August 5, 2016

On August 5, 2016 Amazon.com Inc. CEO Jeff Bezos unveiled the first Prime Air-branded Boeing 767 at Seattle (Boeing Field) operated by Atlas Air (“1997” is a prime number).

Amazon previously announced in May 2016 it would lease 20 Boeing 767s from Atlas Air. This followed a previous deal announced in March 2016 to lease up to 20 767s from Air Transport Services Group.

Amazon also utilizes FedEx and UPS for its Prime deliveries.

Amazon issued this statement:

Amazon on August 5, 2016 is showcasing its first ever branded air cargo plane during Seafair’s Air Show, an annual community celebration taking place in Amazon’s hometown of Seattle. The Boeing 767-300, operated by Amazon’s air cargo provider Atlas Air, is flying in the Seafair Air Show to thousands of Seattle residents and Amazon employees.

“Creating an air transportation network is expanding our capacity to ensure great delivery speeds for our Prime members for years to come,” said Dave Clark, Amazon’s senior vice president of worldwide operations. “I cannot imagine a better way to celebrate the inaugural flight than in our hometown at Seafair alongside Amazon employees and Seattle residents.”

The airplane, named Amazon One, is one of 40 that Amazon has agreed to lease through air cargo partners Atlas Air and ATSG. There are currently 11 dedicated airplanes flying for Amazon as of today with additional airplanes rolling out over time. In an ode to its Prime members, Amazon’s first airplane in its dedicated fleet features a tail number made up of a Prime number.

In the last year, Amazon has launched several initiatives to ensure great delivery speeds and supply chain capacity for its customers, including Amazon Flex, the company’s mobile application that allows individuals to sign-up, be vetted and begin delivering for Amazon, a dedicated network of 4,000 trailers to increase trucking capacity and, now, the network of air cargo planes. These efforts join Amazon’s robust worldwide network of more than 125 fulfillment centers and over 20 sortation centers where the company uses high-end algorithms, robotics, machine learning and other technological innovations to increase delivery speeds for customers. Amazon is now bringing the same technological expertise to efforts in the transportation space to increase shipping capacity for its customers.

Copyright Photo: Prime Air (Atlas Air) Boeing 767-33A ER (F) N1997A (msn 27310) BFI (Steve Bailey). Image: 934097.

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