Tag Archives: Atlas Air

Atlas Air takes delivery of first of four new Boeing 747-8 Freighters

Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc., has announced it has taken delivery of a Boeing 747-8 freighter, which will operate on behalf of its customer Cainiao, the logistics arm of Alibaba Group, as part of a previously announced long-term agreement.

The aircraft will increase capacity on routes between China and the Americas. This aircraft is the first of four new 747-8 freighters that Atlas expects to receive from Boeing this year.

The addition of this 747-8F expands service for Cainiao between China, the United States, Brazil and Chile aboard the most capable, technologically advanced and environmentally-friendly widebody freighter, providing 20% higher payload capacity and 16% lower fuel consumption than the very capable 747-400F.

As previously announced, Atlas’s investment in these new aircraft underscores its commitment to environmental stewardship through the reduction of aircraft emissions, resource consumption and noise. The iconic Boeing 747 program has been in operation for over 50 years and will continue to play a critical role in keeping global supply chains moving for decades to come. The 747-8 is the only factory-built freighter with nose-loading capability in production, which will serve the long-term needs of the airfreight market.

Atlas Air aircraft photo gallery:

Atlas Air Worldwide Holdings reports first quarter net income of $81.5 million

Atlas Air Worldwide Holdings, Inc. (Atlas Air) today announced first quarter 2022 net income of $81.5 million, or $2.38 per diluted share, compared with  $89.9 million, or $3.05 per diluted share, in 2021 (which included $40.9 million, $31.9 million after tax, of CARES Act grant income).

On an adjusted basis, EBITDA totaled $202.8 million in the first quarter of 2022 compared with $181.3 million in the prior-year period. For the three months ended March 31, 2022, adjusted net income totaled $88.8 million, or $2.99 per diluted share, compared with $72.2 million, or $2.45 per diluted share, in 2021.

“We are off to an excellent start in 2022. We delivered strong earnings, despite the pandemic-related operational challenges we continue to navigate,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich. “I would like to thank the entire Atlas team for their ongoing commitment to deliver this great performance.”

He added: “Atlas continues to demonstrate the value of airfreight as a vital component of the global supply chain. We are seeing a sustaining shift in long-term customer demand for Atlas’ dedicated aircraft, and the speed and reliability airfreight provides. During the first quarter, our customers continued to enter and enhance long-term contracts with Atlas for dedicated freighter capacity.

“We are expanding and diversifying our customer base, and increasing flying under long-term contracts with attractive rates and guaranteed levels of flying. To meet customer demand, we are also investing in our world-class fleet by adding four new 747-8F and four new 777 freighter aircraft.

All four of our new 747-8Fs have been placed with customers under long-term contracts, and we have strong interest for the new 777Fs as well.”

Mr. Dietrich concluded: “We are very well positioned for the years ahead. We have significantly strengthened our balance sheet and have a healthy cash balance. This provides us the financial flexibility to opportunistically deploy capital, including investing in our business and returning capital to shareholders.”

First-Quarter Results

Revenue grew to $1.0 billion in the first quarter of 2022 compared with $861.3 million in the prior-year quarter. Volumes in the first quarter of 2022 totaled 82,626 block hours compared with 88,523 in the first quarter of 2021.

For the three months ended March 31, 2022, our reported net income totaled $81.5 million, or $2.38 per diluted share, compared with net income of $89.9 million, or $3.05 per diluted share, in the first quarter of 2021 (which included $40.9 million, $31.9 million after tax, of CARES Act grant income).

On an adjusted basis, EBITDA was $202.8 million in the first quarter this year compared with $181.3 million in the first quarter of 2021. Adjusted net income in the first quarter of 2022 totaled $88.8 million, or $2.99 per diluted share, compared with $72.2 million, or $2.45 per diluted share, in the prior-year period.

Reported earnings also included an effective income tax rate of 22.8%. On an adjusted basis, our results reflected an effective income tax rate of 22.3%.

Higher Airline Operations revenue primarily reflected an increase in the average rate per block hour, partially offset by a reduction in block hours. The higher average rate per block hour was primarily due to higher yields (net of fuel), including the impact of new and extended long-term contracts, as well as higher fuel prices. Block-hour volumes reflected a reduction in less profitable smaller gauge CMI service flying as well as operational disruptions due to the spike in Omicron cases globally.

Higher Airline Operations segment contribution in the first quarter of 2022 was primarily driven by higher yields (net of fuel), including the impact of new and extended long-term contracts. These improvements were partially offset by increased pilot costs related to our new collective bargaining agreement (CBA) and higher premium pay for pilots operating in certain areas significantly impacted by COVID-19.

In Dry Leasing, segment revenue and contribution increased from the prior-year period primarily due to $5.0 million of revenue received from maintenance payments related to the scheduled return of an aircraft, which was subsequently sold during the quarter. Dry Leasing contribution also benefited from lower interest expense related to the scheduled repayment of debt.

Unallocated income and expenses, net, increased during the quarter, primarily due to $40.9 million in CARES Act grant income recognized in 2021 (which was excluded from our adjusted results).

Share Repurchases

As previously announced in February 2022, our Board of Directors approved a share repurchase program authorizing up to $200.0 million of our common stock, which we began by entering into a $100.0 million accelerated share repurchase program (ASR). In total, we repurchased 1,234,144 shares under the ASR, which was completed in April.

Additional purchases may be made at our discretion in the form of open market repurchase programs, ASRs, privately negotiated transactions, or a combination of these methods.

Fleet

As previously disclosed, we are purchasing five of our existing 747-400Fs at the end of their leases during the course of this year, one of which was acquired in March. We expect to complete the remaining four aircraft acquisitions between May and December 2022.

Acquiring these widebody freighters underscores our confidence in the demand for international airfreight capacity, particularly in express, e-Commerce and fast-growing global markets. Keeping these aircraft in our fleet ensures continuity of capacity for our customers, which will drive strong returns for Atlas in the years ahead.

Cash

At March 31, 2022, our cash, including cash equivalents and restricted cash, totaled $740.9 million compared with $921.0 million at December 31, 2021.

The change in position resulted from cash used for investing and financing activities, including $115.0 million for pre-delivery payments for our new aircraft and $100.0 million for our ASR, partially offset by cash provided by operating activities.

Net cash used for investing activities during the first quarter of 2022 primarily related to payments for flight equipment and modifications, including aircraft pre-delivery payments, as well as capital expenditures and spare engines.

Net cash used for financing activities during the period primarily related to payments on debt obligations and the ASR.

2022 Outlook*

For the second quarter of 2022, we expect revenue to exceed $1.1 billion from flying more than 85,000 block hours. We also anticipate adjusted EBITDA of approximately $215.0 million, and adjusted net income to grow by a high-single-digit percentage compared with adjusted net income of $88.8 million in the first quarter of 2022.

For the full year, we expect to fly more than 350,000 block hours, with revenue of approximately $4.6 billion, and adjusted EBITDA of about $1.0 billion. In addition, we anticipate adjusted net income in the second half of 2022 to improve approximately 60% compared with adjusted net income in the first half of this year.

We expect aircraft maintenance expense in 2022 to be similar to 2021, and depreciation and amortization to total about $300 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are projected to total approximately $135 to $145 million, mainly for parts and components for our fleet.

We also expect our full-year 2022 adjusted effective tax rate will be approximately 23.0%.

This outlook includes the contribution from numerous new or enhanced long-term customer contracts, as well as higher pilot costs from our new CBA. We also expect second-quarter results to continue to be impacted by premium pay for pilots operating in certain locations significantly impacted by COVID-19.

Other than with regard to revenue, we provide guidance on an adjusted basis because we are unable to predict with reasonable certainty and without unreasonable effort the effects on future gains and losses on asset sales, special charges and other unanticipated items that could be material to our reported results.*

Atlas Air airfcraft photo gallery:

Atlas Air and Cainiao expand partnership with the addition of a new Boeing 747-8 freighter linking China and the Americas

Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc. and Cainiao Network, the logistics arm of Alibaba Group, today announced the expansion of their strategic partnership by adding a new Boeing 747-8 Freighter under a long-term agreement to increase capacity on routes between China and the Americas.

This expansion builds upon Atlas Air’s partnership with Cainiao, and the new aircraft will enter service for Cainiao in the second quarter of 2022, linking China with the United States, Brazil and Chile.

This 747-8F aircraft is among the last 747s ever to be produced by Boeing. As previously announced, Atlas ordered the last four 747 production aircraft to capitalize on strong demand and deliver value for its customers, while also bolstering its commitment to environmental stewardship through the reduction of aircraft emissions, resource consumption and noise.  The iconic Boeing 747 program has been in operation for over 50 years and will continue to play a critical role in keeping global supply chains moving for decades to come.

The Boeing 747-8 Freighter is the most capable, technologically advanced and environmentally friendly widebody freighter. The 747-8F provides 20% higher payload capacity and 16% lower fuel consumption than the very capable 747-400F.

In November 2021, Cainiao expanded its partnership with Atlas Air to include daily charter flights operated between China and Latin America in response to the growth of cross-border trade between China and Latin America.

Atlas Air aircraft photo gallery:

 

Atlas Air enters into long-term agreement with Kuehne+Nagel for two Boeing 747-8F freighters

Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc., today announced it has entered into a long-term, dedicated charter agreement to operate two of its new incoming Boeing 747-8 freighters on a global basis for Kuehne+Nagel, one of the world’s largest freight forwarders.

Atlas Air will commence operation of these aircraft for Kuehne+Nagel following their delivery from Boeing, with one expected in the third quarter and the second in the fourth quarter of 2022. Atlas Air operates one of the world’s largest fleets of 747-8Fs, the most capable freighter aircraft in the world. These two aircraft placed with Kuehne+Nagel are the last 747s Boeing will produce.

As previously announced, Atlas ordered the last four 747 production aircraft to capitalize on strong demand and deliver value for its customers, while also bolstering its commitment to environmental stewardship through the reduction of aircraft emissions, resource consumption and noise.  This legendary aircraft has been in production for over 50 years and will continue to serve the needs of our global supply chains for decades into the future.

“We are delighted to expand our partnership with Kuehne+Nagel by providing dedicated capacity for their growing global airfreight network,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich. “The Boeing 747-8F serves an incredibly important role in global airfreight, with advanced technology that allows for lower fuel consumption, higher capacity and unique nose-loading capability. We look forward to taking delivery of these two 747s and operating them for Kuehne+Nagel to support their network for years to come.”

Yngve Ruud, Member of the Management Board of Kuehne+Nagel, responsible for Air Logistics, commented: “As a market leader in airfreight, Kuehne+Nagel further expands its dedicated charter network to support customers with solutions for long-term planning and high-quality service. We are proud to partner with Atlas Air and include these two new Boeing 747-8Fs in our already extensive global capacity offering.”

The 747-8F provides 20% higher payload capacity and 16% lower fuel consumption than the very capable 747-400F.

About Kuehne+Nagel

With more than 76,000 employees at 1,400 locations in over 100 countries, the Kuehne+Nagel Group is one of the world’s leading logistics companies. Its strong market position lies in Sea Logistics, Air Logistics, Road Logistics and Contract Logistics, with a clear focus on integrated logistics solutions.

Atlas Air aircraft slide show:

Atlas Air aircraft photo gallery:

Atlas Air Worldwide reports record 2021 results

Atlas Air Worldwide Holdings, Inc. has announced record 2021 results, including revenue that rose to $4.0 billion, and net income that increased to $493.3 million, or $16.16 per diluted share, compared with $3.2 billion in revenue, and net income of $360.3 million, or $13.50 per diluted share, in 2020.

On an adjusted basis, EBITDA increased to a record $1.1 billion in 2021 compared with $844.2 million in 2020. For the twelve months ended December 31, 2021, adjusted net income rose to a record $551.0 million, or $18.51 per diluted share, compared with $379.0 million, or $13.67 per diluted share, in 2020.

“2021 was another outstanding year with excellent financial and operating performance. Our greatest strength is our people and I’d like to thank everyone at Atlas for working together to deliver these very strong results. We are also very pleased to have achieved a long-term labor agreement with our pilots that recognizes their significant contributions to Atlas. With the strength, flexibility and resiliency of our global business model, our experienced and dedicated team delivered high-quality service to our customers in an operating environment with persistent pandemic-related obstacles,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich.

“We are leveraging our world-class fleet and global operating capabilities to increase aircraft utilization and capitalize on strong demand for our services and dedicated freighters, as well as on higher airfreight yields.”

He continued: “We have now placed our new 747-8Fs under long-term agreements, enhanced numerous long-term contracts with strategic customers and further diversified our customer base. In 2021, we deepened relationships with valued customers, including Cainiao, CEVA Logistics, DB Schenker, DHL, DSV, FedEx, Flexport, Geodis, HP Inc., Icelandair, JAS, Kuehne+Nagel, SF Group and UPS.

“We take a disciplined and balanced approach to capital allocation. We have strengthened our balance sheet, made significant investments in our fleet, including new 747-8 and 777 freighter aircraft, and are returning capital to our shareholders. Consistent with our balanced capital allocation approach, our Board has authorized a new $200 million share repurchase program, and we are starting by implementing $100 million in accelerated repurchases.

“Atlas is very well positioned for the future. We have a dedicated and talented team of employees, a strong balance sheet, a formidable fleet of aircraft, an unparalleled network of customers and unrivaled global operating capabilities. We also have a strong position and look forward to growing our Titan dry leasing business. And our strategic focus on express, e-Commerce and fast-growing markets will continue to drive our business forward.”

Mr. Dietrich added: “We expect strong performance in the first quarter of 2022, with adjusted EBITDA and adjusted net income similar to the first quarter of 2021. We also anticipate revenue of about $1.0 billion from flying approximately 85,000 block hours.

“This outlook reflects higher yields, including the contribution from numerous new or enhanced long-term customer contracts, as well as higher pilot costs from our new joint collective bargaining agreement that went into effect in September 2021.

“Due to the uncertainty related to the pandemic, ongoing supply chain disruptions and other factors, we are not providing additional guidance at this time.”

Full-Year Results

Volumes in 2021 grew to 364,061 block hours compared with 344,821 in 2020, with revenue increasing to $4.0 billion in 2021 from $3.2 billion in 2020.

For the twelve months ended December 31, 2021, our reported net income rose to $493.3 million, or $16.16 per diluted share, compared with $360.3 million, or $13.50 per diluted share, in 2020.

On an adjusted basis, EBITDA grew to $1.1 billion in 2021 compared with $844.2 million in 2020. For the twelve months ended December 31, 2021, adjusted net income increased to $551.0 million, or $18.51 per diluted share, compared with $379.0 million, or $13.67 per diluted share, in 2020.

Reported results in 2021 included an effective income tax rate of 23.8%. On an adjusted basis, our results reflected an effective income tax rate of 22.0%.

Fourth-Quarter Results

Volumes in the fourth quarter of 2021 totaled 91,985 block hours compared with 96,079 in the fourth quarter of 2020, with revenue rising to $1.2 billion compared with $932.5 million in the prior-year quarter.

For the three months ended December 31, 2021, our reported net income totaled $176.7 million, or $5.55 per diluted share, compared with net income of $184.0 million, or $6.15 per diluted share, in the fourth quarter of 2020.

On an adjusted basis, EBITDA was $361.8 million in the fourth quarter this year compared with $279.7 million in the fourth quarter of 2020. Adjusted net income in the fourth quarter of 2021 totaled $211.6 million, or $7.05 per diluted share, compared with $143.2 million, or $4.83 per diluted share, in the prior-year period.

Reported earnings in the fourth quarter of 2021 also included an effective income tax rate of 24.3%. On an adjusted basis, our results reflected an effective income tax rate of 21.7%.

Higher Airline Operations revenue primarily reflected an increase in the average rate per block hour. The higher average rate per block hour was primarily due to an increased proportion of higher-yielding flying, including the impact of new and extended long-term contracts, the ongoing reduction of available cargo capacity in the market, the continued disruption of global supply chains, as well as higher fuel costs. Block-hour volumes during the period reflected a reduction in less profitable smaller gauge CMI service flying, partially offset by our ability to increase the utilization of our current fleet to meet strong customer demand. Block-hour volumes benefited from the operation of a 747-400 freighter we reactivated during the fourth quarter of 2020.

Higher Airline Operations segment contribution in the fourth quarter of 2021 was primarily driven by the positive factors benefiting segment revenue mentioned above as well as lower heavy maintenance expense. These improvements were partially offset by higher pilot costs related to our new joint collective bargaining agreement (JCBA).

In Dry Leasing, segment revenue and contribution in the fourth quarter of 2021 were relatively unchanged compared with the prior-year period.

Unallocated income and expenses, net, increased during the quarter, primarily due to $67.2 million in CARES Act grant income in 2020 and a $14.1 million increase related to adjustments to paid time-off benefits in our new JCBA in 2021 (both of which were excluded from our adjusted results), as well as a $6.6 million reduction in refunds of aircraft rent paid in previous years.

 

Fleet Management

We have now placed all four of our new and incoming 747-8Fs under long-term agreements. We expect delivery of these aircraft between May and October this year.

In addition, we look forward to the deliveries and placements of the four new 777-200LRFs we recently announced, for which there is very strong demand. We expect one to be delivered late in the fourth quarter of this year and three more throughout 2023.

As previously disclosed, we purchased six of our existing 747-400Fs during 2021 that were formerly on lease to us. We are also purchasing another five of our other 747-400Fs at the end of their leases during the course of this year, which range from February to December.

Acquiring these widebody freighters underscores our confidence in the demand for dedicated international airfreight capacity, particularly in express, e-Commerce and fast-growing global markets. These investments are consistent with our long-term strategic growth plan and will provide customers with modern and environmentally-efficient aircraft, which will drive strong returns for Atlas in the years ahead.

Cash

At December 31, 2021, our cash, including cash equivalents and restricted cash, totaled $921.0 million compared with $856.3 million at December 31, 2020.

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

Net cash used for investing activities during 2021 primarily related to payments for flight equipment and modifications, including all pre-delivery payments for 747-8F aircraft, as well as capital expenditures, spare engines and GEnx performance upgrade kits.

Net cash used for financing activities during the period primarily related to payments on debt obligations, partially offset by proceeds from debt issuance.

Share Repurchases

In February 2022, our Board of Directors approved the establishment of a new share repurchase program authorizing up to $200.0 million of our common stock. Purchases may be made at our discretion in the form of accelerated share repurchase programs, open market repurchase programs, privately negotiated transactions, or a combination of these methods.

As part of the share repurchase program, the company will enter into a $100.0 million accelerated share repurchase program (ASR). Purchases under the ASR are expected to be completed by the end of the second quarter.

Outlook*

We expect strong performance in the first quarter of 2022, with adjusted EBITDA and adjusted net income similar to the first quarter of 2021. We anticipate revenue of about $1.0 billion from flying approximately 85,000 block hours.

This outlook reflects higher yields, including the contribution from numerous new or enhanced long-term customer contracts, as well as higher pilot costs from our new JCBA.

We expect first-quarter results to continue to be impacted by ongoing pandemic-related expenses, including premium pay for employees flying into locations significantly impacted by COVID-19 and other operational costs, including for regulatory compliance and providing a safe working environment for our employees.

For the full year in 2022, we expect aircraft maintenance expense to be similar to 2021, and depreciation and amortization to total about $300 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are projected to total approximately $135 to $145 million, mainly for parts and components for our fleet.

Due to the uncertainty related to the pandemic, ongoing supply chain disruptions and other factors, we are not providing additional guidance at this time.

Other than with regard to revenue, we provide guidance on an adjusted basis because we are unable to predict with reasonable certainty and without unreasonable effort the effects on future gains and losses on asset sales, special charges and other unanticipated items that could be material to our reported results.*

Atlas Air aircraft photo Gallery:

Atlas Air and Flexport expand their partnership with a third Boeing 747 freighter

Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW), today announced an agreement to expand its partnership with Flexport, the technology platform for global logistics, to add a third Boeing 747-400 freighter to its existing fleet beginning in September 2022.  This long-term charter agreement reflects the strong customer demand for Atlas’ services and dedicated international widebody airfreight capacity.

The agreement between Flexport and Atlas Air will broaden Flexport’s network of dedicated freighters to include service from Asia to Los Angeles (LAX), Miami (MIA) and soon, Chicago (ORD).  The additional freighter will increase Flexport’s dedicated airfreight capacity from Atlas Air by 50% and allow for enhanced schedule flexibility as new origins and destinations are added in 2022 and beyond.  The move eastward across the United States will improve airfreight accessibility for global shippers and enable them to design airfreight networks that best serve their interests as part of strong, resilient multi-modal supply chain strategies.

Atlas Air aircraft photo gallery:

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Atlas Air extends long-term agreement with SF Group

SF Airlines Boeing 747-4EVF ER B-2422 (msn 35173) LGG (Ton Jochems). Image: 951326.

Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc., today announced the extension of a long-term aircraft transportation services agreement to operate a Boeing 747-400 Freighter for SF Group (SF Airlines), China’s leading express service provider, between China and the United States.

The agreement, which has been in place since 2018, enhances the operating capability of SF and extends its fast-growing global network.

SF, based in Shenzhen, Guangdong, is one of the world’s largest express providers and one of China’s leading couriers.

Top Copyright Photo: SF Airlines Boeing 747-4EVF ER B-2422 (msn 35173) LGG (Ton Jochems). Image: 951326.

SF Airlines aircraft slide show:

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Atlas Air Worldwide orders four new Boeing 777F freighters

Atlas Air Worldwide Holdings, Inc. announced today it has ordered four new Boeing 777F freighters in response to strong customer demand for dedicated international wide-body airfreight capacity, particularly in the fast-growing e-Commerce and Express markets.

The first of the four new 777-200LRFs is expected to be delivered in November 2022 with the other three expected to be delivered throughout 2023. This investment will bolster Atlas’ 777F fleet, which currently includes 14 freighters that the company operates or provides to customers on a dry-lease basis through its Titan Aviation Leasing subsidiary.

In addition to its 777F fleet, Atlas is the world’s largest operator of Boeing 747 freighter aircraft, with 49 in its current fleet. As previously announced, the company will take delivery of four new 747-8 freighters during 2022, with the first delivery expected in May. These aircraft are the last four 747 freighters Boeing will produce. The company also operates and leases sizable fleets of 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.

Atlas Air extends its agreement with DB Schenker

Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc., has announced an extension of its partnership with Schenker Flight Services GmbH (DB Schenker), one of the world’s largest integrated logistics service providers, to provide transpacific service.

Atlas Air’s relationship with DB Schenker includes supporting its global network by providing charter capacity service.

The new arrangement builds on an agreement Atlas Air reached with DB Schenker in 2020, and extends the dedicated capacity, which Atlas Air provides on multiple flights every week.

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Southern Air is merged into Atlas Air, the end of an era

Southern Air is officially merged into Atlas Air.

Atlas Air Worldwide Holdings, Inc. on November 17 announced that the transition to bring operations of Southern Air, Inc. under a Single Operating Certificate (SOC) with Atlas Air, Inc. is now complete.

With the addition of Southern Air, Atlas Air was able to add 777 and 737 aircraft operating platforms, resulting in a more diversified company offering customers access to a wider range of aircraft, a broader array of services, greater scale and an expanded global footprint.

Southern Air was established on March 5, 1999, by James Neff from the assets of original Southern Air Transport (SAT) and commenced operations in November 1999.

Atlas Air Worldwide is now composed of three companies.

Southern Air aircraft slide show:

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