Tag Archives: DHL

Ethiopian and DHL Global Forwarding to partner

DHL Global Forwarding, the leading international provider of air, sea and road freight services, and Ethiopian Airlines, the largest aviation group in Africa, have signed a new agreement to form a joint venture company – DHL-Ethiopian Airlines Logistics Services Ltd., to build the Leading Cargo Logistics provider JV company in Africa; the company will be based in Ethiopia and do business in the entire continent of Africa, enhancing Ethiopia’s logistics infrastructure and connections.

Ethiopian Airlines, which assumes a majority stake in this joint venture, will provide regulatory and operational support as DHL Global Forwarding establishes air, ocean, and road freight connections between Ethiopia’s main trade hubs and the rest of the world. Pramod Bagalwadi, a DHL veteran with over two decades of experience in management roles within the logistics industry, has been appointed to lead the new organization. This will be an additional portfolio for Pramod, who currently leads the Industrial Projects Team for DHL in Sub-Saharan Africa and a strategic business partner for the company in the region.

DHL Global Forwarding, the leading international provider of air, sea and road freight services, and Ethiopian Airlines, the largest aviation group in Africa, today signed a new agreement to form a joint venture company – DHL-Ethiopian Airlines Logistics Services Ltd., to build the Leading Cargo Logistics provider JV company in Africa; the company will be based in Ethiopia and do business in the entire continent of Africa, enhancing Ethiopia’s logistics infrastructure and connections.

Ethiopian Airlines, which assumes a majority stake in this joint venture, will provide regulatory and operational support as DHL Global Forwarding establishes air, ocean, and road freight connections between Ethiopia’s main trade hubs and the rest of the world. Pramod Bagalwadi, a DHL veteran with over two decades of experience in management roles within the logistics industry, has been appointed to lead the new organization. This will be an additional portfolio for Pramod, who currently leads the Industrial Projects Team for DHL in Sub-Saharan Africa and a strategic business partner for the company in the region.

Photo: Ethiopian Airlines.

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Atlas Air Worldwide acquires two ex-LATAM Boeing 777 freighters for ACMI service for DHL Express

Atlas Air Worldwide Holdings, Inc. acquires Southern Air and Florida West

Atlas Air Worldwide Holdings, Inc. has announced the acquisition of two Boeing 777F Freighters from LATAM Airlines.

Both 777 aircraft will operate in ACMI (aircraft, crew, maintenance and insurance) service for DHL Express through Atlas’ Southern Air subsidiary, with the first starting service this month and the second expected to begin service at the end of the second quarter of 2018.

The first of the two aircraft was previously operated on a CMI (crew, maintenance and insurance) basis for DHL Express by Southern Air. The second aircraft will increase the number of 777 freighters owned or operated by the company to 12.

The expected financial and operating impacts of the two 777 freighters in 2018 were incorporated in the company’s earnings growth framework announced on February 22, 2018. As indicated, the company anticipates that its full-year 2018 adjusted net income will grow by a mid-twenty-percent level compared with 2017.

Copyright Photo: Southern Air (2nd)-DHL Boeing 777-FZB N775SA (msn 37987) ANC (Michael B. Ing). Image: 920329.

DHL-Southern Air aircraft slide show:

 

Atlas Air Worldwide reports second quarter adjusted net income of $29.4 million

Atlas Air Worldwide Holdings, Inc. (Atlas Air and Polar Air Cargo) (New York) today announced adjusted net income attributable to common stockholders of $29.4 million, or $1.17 per diluted share, for the three months ended June 30, 2015, compared with $15.9 million, or $0.63 per diluted share, for the three months ended June 30, 2014.

Atlas Air Worldwide logo

On a reported basis, net income attributable to common stockholders in the second quarter of 2015 totaled $28.4 million, or $1.13 per diluted share, compared with $29.6 million, or $1.17 per diluted share, in the year-ago quarter.

Free cash flow of $68.5 million in the second quarter of 2015 compared with $59.2 million in the second quarter of 2014.

“Earnings in the second quarter were driven by contribution and margin strength in ACMI, Charter and Dry Leasing,” said William J. Flynn, President and Chief Executive Officer.

“We are seeing good demand for our aircraft and services as we enter the second half of 2015, as many of our customers are outperforming the overall market. We are working closely with our customers to provide them with the most efficient aircraft and effective operating services for their needs.

“As we gather additional insight into second-half demand, yields and military requirements, we continue to look forward to a strong year and a significant increase in earnings compared with 2014.”

Responding to market demand and customer requirements, we are implementing several previously announced fleet initiatives that are incorporated in our framework outlook for the year: placing an additional 747-400 freighter in ACMI service with DHL Express at the start of the third quarter; acquiring a new 747-8 freighter scheduled to be delivered to us in November; returning an owned, unencumbered 747-400 converted freighter to active service to meet additional Charter demand; securing a short-term operating lease on a second 747-400 converted freighter in Charter with more favorable terms; and expanding our Titan Dry Leasing portfolio by acquiring and converting two 767 passenger aircraft into freighter configuration. The freighters will be leased to DHL on a long-term basis when they are delivered in the fourth quarter.

 

Second-Quarter Results

Revenue and direct contribution in ACMI in the second quarter benefited from an increase in block hour volumes, driven by the start-up of four additional 767 CMI aircraft and an improvement in 747 cargo aircraft utilization. Segment contribution also benefited from lower heavy maintenance expense. These were partially offset by a reduction in revenue per block hour, which reflected the impact of payments received from a customer in 2014 in connection with the return of an aircraft as well as an increase in CMI flying in 2015.

In Charter, significantly higher segment revenues reflected an increase in commercial cargo demand and improvements in military passenger and cargo demand. In addition, segment contribution benefited from those higher flying levels and a reduction in heavy maintenance expense. The decrease in revenue per block hour was primarily driven by the impact of lower fuel prices.

In Dry Leasing, revenue and profitability grew as we realized revenue from maintenance payments related to the scheduled return of a 757-200 cargo aircraft in April. This aircraft was subsequently leased to DHL Express on a long-term basis during the quarter.

Reported earnings for the second quarter of 2015 included an effective income tax rate of 31.0%, which reflected our continued reinvestment of the net earnings of certain foreign subsidiaries outside of the U.S.

Half-Year Results

For the six months ended June 30, 2015, adjusted net income attributable to common stockholders totaled $55.2 million, or $2.20 per diluted share, compared with $27.1 million, or $1.07 per diluted share, for the six months ended June 30, 2014.

On a reported basis, first-half 2015 net income attributable to common stockholders totaled $57.6 million, or $2.29 per diluted share, compared with $37.5 million, or $1.49 per diluted share, in the first half of 2014.

Free cash flow totaled $148.8 million in the first six months of 2015 compared with $96.1 million in the first six months of 2014.

Liquidity and Capital Resources

At June 30, 2015, our cash, cash equivalents, restricted cash and short-term investments totaled $554.9 million, compared with $330.7 million at December 31, 2014.

The change in position reflected net cash of $171.1 million provided by operating activities; net cash of $104.4 million provided by financing activities, which included $99.1 million of debt payments; and net cash of $59.4 million used for investing activities.

In June 2015, we issued $224.5 million of convertible senior notes due June 2022 with a cash coupon of 2.25%. We used a portion of the approximately $218 million of net proceeds from the offering in June to fund the $16.6 million net cost of convertible note hedges and warrants related to the notes. These transactions are intended to offset any actual dilution from the conversion of the notes and to effectively increase the overall conversion price from $74.05 to $95.01 per share.

During the third quarter of 2015, we expect to use approximately $113 million of the net proceeds to retire higher-rate Enhanced Equipment Trust Certificates (EETCs) related to five of our 747-400 freighter aircraft. The redemption amount gives effect to the company’s ownership interests in the EETCs being retired, which have an average cash coupon of 8.1%.

We expect to use the remaining net proceeds from the convertible note issuance for working capital and capital expenditures, repayment or refinancing of debt, and general corporate purposes.

Outlook

We are encouraged by our strong first-half performance. We are seeing good demand for our aircraft and services this quarter and for the remainder of the year. And we continue to anticipate significant growth in adjusted diluted earnings per share in 2015.

On a sequential basis, we expect earnings per share in the third quarter of 2015 to be slightly better than our second-quarter 2015 adjusted earnings, followed by further earnings improvement in the fourth quarter.

Taking our first-half 2015 earnings strength into account, we continue to expect approximately 55% of our earnings to occur in the second half.

In addition, we anticipate that block-hour volumes this year will increase approximately 10% compared with 2014, including the impact of the 747-8 freighter scheduled to be delivered in November and 747-400BCF that we returned to service at the end of the second quarter. More than 70% of our total block hours should be in ACMI and the balance in Charter. Our ACMI outlook reflects expected growth in both 747 freighter operations as well as CMI flying. Our Charter outlook reflects our strong presence in the global charter market and military demand that is holding up well compared with 2014 levels.

In Dry Leasing, our portfolio is expected to include our recent acquisition and subsequent conversion of two 767 passenger aircraft to freighter configuration. Following their conversion, which should be completed during the fourth quarter of this year, the aircraft will be leased to DHL Express.

Given the flying levels that we anticipate, we continue to expect that aircraft maintenance expense in 2015 should total approximately $190 million. In addition, depreciation should be approximately $125 million. We also anticipate an effective income tax rate of approximately 30%. Core capital expenditures, excluding aircraft and engine purchases, are expected to total approximately $45 million, mainly for spare parts for our fleet. Expenditures for additional aircraft and engines should total approximately $240 million.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Polar Air Cargo’s Boeing 747-46NF N454PA (msn 30812) in DHL colors departs from scenic Anchorage, Alaska.

Atlas Air aircraft slide show: AG Airline Slide Show

Polar Air Cargo aircraft slide show: AG Airline Slide Show

DHL-Polar Air Cargo aircraft slide show: AG Airline Slide Show

AG Prints-6 Sizes

DHL delivers the first A321 aircraft components for Airbus to Mobile, Alabama

DHL transport first A320 to Mobile

DHL Global Forwarding, Americas, has issued this statement:

DHL logo (LRW)

DHL Global Forwarding, the specialist for air and ocean freight at Deutsche Post DHL Group, shipped the first aircraft components to the newly built U.S. assembly plant in Mobile, Alabama from the Hamburg Finkenwerder Airbus plant in Germany. DHL Industrial Projects developed a multimodal transport concept for the European aircraft manufacturer. From the beginning of June 2015, large components of A320 family as well as 1,000 sea freight containers and additional air freight shipments, also including hazardous goods, crossed the Atlantic. Arriving into port on June 17, DHL transported the aircraft components within a total transit time of 29 days which was of critical importance since configuration and control of the final assembly processes at Airbus depended upon it.Airbus logo (large)

“Our Industrial Projects team created a plan, developed a concept and helped Airbus transport their aircraft components efficiently, effectively, and with no issues.”

“In order to successfully transport highly sensitive cargo, especially across great distances, it is critical to have a solutions-driven team of experts in place,” said Brian Lindholm, global head of business development, DHL Global Forwarding Industrial Projects. “Our Industrial Projects team created a plan, developed a concept and helped Airbus transport their aircraft components efficiently, effectively, and with no issues.”

The five different aircraft components with a maximum weight of thirty tonnes per section were transported on board a chartered ship using special sea transport frames and secured on roll trailers with twist locks. After arriving at the Port of Mobile and clearing Customs, the aircraft components were then loaded onto heavy-duty trailers with special cranes which will be transported a few miles to the new Airbus U.S. assembly plant in Mobile on Sunday, June 21.

For air freight shipments, both LD3 containers and consolidated shipments were used. Special legally required procedures were used for securing and transporting hazardous goods.

After the aircraft components are delivered, the sea transport frames and the air freight containers will be prepared for their return to Finkenwerder.

This is the first time DHL transports major components for Airbus.

DHL is part of Deutsche Post DHL Group.

Top Photo: DHL/Business Wire. The fuselage component for new Airbus A321-231 (msn 6512) for JetBlue Airways was delivered to Mobile, Alabama from Hamburg, Germany. Members of DHL Global Forwarding, Airbus, the International Longshoremen’s Association (Local 14010) and AMP Terminal employees pose in front of the fuselage of the first Airbus A320 aircraft to be assembled at the Airbus U.S. Manufacturing Facility in Mobile, Alabama.

DHL announces a major expansion at its Cincinnati cargo hub

DHL Express (Plantation, Florida) has made this announcement about its expanding CVG cargo hub:

DHL logo (LRW)

DHL, the world’s leading logistics company, announced today it is investing $108 million to expand its Americas hub facility at the Cincinnati-Northern Kentucky airport (CVG) to meet the demands of continued growth in international e-commerce and global trade. The expansion will provide more gates to accommodate additional aircraft, warehouse space and new equipment to provide more capacity for sorting shipments as well as unloading and reloading planes.

The CVG hub, one of three DHL global hubs, connects the United States to the DHL global network spanning Asia, Europe and the Americas. Processing approximately 46 million international shipments annually, the CVG hub handles shipments bound for the U.S., Canada, Mexico and Latin America. It also connects nearly 100 service centers nearly 100 service centers, gateways in Los Angeles and New York, and a hub in Miami to more than 220 countries and territories around the world. DHL’s two other global hubs are in Leipzig, Germany and Hong Kong.

DHL has applied to the Kentucky Economic Development Finance Authority for several tax incentives as part of this project. Today DHL received approval from the development authority for a sales and use tax credit on construction costs, building fixtures, electronic processing equipment as well as equipment used in research and development. The state of Kentucky provides the tax incentives to encourage companies to invest and expand their operations in the state.

With this new investment, DHL will have invested $280 million in the CVG hub since establishing its U.S. international operations center at the Cincinnati/Northern Kentucky airport in 2009. Staffing has also grown, from 1,600 in late 2009 to approximately 2,000 currently.

DHL has invested significantly in its global express network in recent years, in order to reinforce its leading position in international time definite delivery. In the last 18 months, the company has announced major investments, including $200 million to double its European hub in Leipzig, $85 million in a new South East Asia Hub in Singapore, and $177 million expansion program in the Middle East and North Africa. DHL is also modernizing its air fleet, introducing more efficient freighter aircraft with increased capacity to bolster connectivity for its global customer base.

The various expansion and equipment projects covered by this latest investment in the Cincinnati hub should be completed in late 2016.

All images by DHL.

Photo by PL Rogers

Photo by PL Rogers

Southern Air eliminates all of its long-term debt with a debt-for-equity exchange

Southern Air (2nd) (DHL) (Cincinnati) has issued this statement about its restructuring process:

Southern Air Holdings, Inc. (SAHI) has completed a debt-to-equity exchange that eliminates all of the company’s long-term debt, enabling SAHI to significantly enhance its strategic position and growth plans.

The consensual secured debt-to-preferred equity exchange satisfies approximately $90 million in senior secured term debt by issuing to its former term lenders a new class of preferred stock and warrants. The newly issued preferred stock is non-voting and non-convertible, and provides for an annual stated yield accruing in kind (not in cash), and a liquidation preference over common shares. The exchange transaction was approved by the United States Department of Transportation and by 100% of the participating term loan lenders. In addition to the debt-for-preferred equity exchange, SAHI’s lenders agreed to renew and increase to $20 million a working capital line of credit in favor of various SAHI affiliates.

“The completion of this debt-for-equity exchange sets a new stage for growth in our air cargo platforms,” said SAHI and Worldwide CEO Dan McHugh. “Southern Air now has a clean balance sheet and no long term debt. With positive cash flow, we are poised to grow our existing 777 and 737 programs with global logistics leader DHL Express and other global customers, and in view of the closing of our acquisition of 767 carrier Florida West International Airways (Florida West), Worldwide is strengthening and expanding its highly reliable, cost efficient and customer-oriented ACMI, CMI and other air cargo services.”

Worldwide recently announced its plans to acquire Miami-based Florida West, a U.S. all cargo carrier operating 767 aircraft.

McHugh added, “Our lenders’ willingness to convert all of their term debt to preferred equity demonstrates a firm commitment to SAHI’s management vision, strategic positioning and growth plans, and we greatly appreciate their support in this debt conversion process.”

SAHI was advised in the transaction by the investment banking firm Imperial Capital and the law firm Berger Singerman.

Southern Air currently operates four Boeing 777-200 freighters on an around-the-world basis for the leading global express delivery provider DHL. Southern Air also operates five Boeing 737 aircraft for DHL, flying key routes to support DHL’s North American air networks.

All Boeing 747s have been retired.

 

Copyright Photo: Chris Sands/AirlinersGallery.com. Southern Air now operates five Boeing 737-400 freighters in DHL colors including ex-LOT 737-45D N495SA (msn 27157) at Calgary.

DHL-Southern Air aircraft slide show: AG Airline Slide Show

Southern Air aircraft slide show: AG Airline Slide Show

AG Designed by photographers

Atlas Air Worldwide Holdings reports adjusted net income of $27.4 million for the third quarter

Atlas Air Worldwide Holdings, Inc. (Atlas Air and Polar Air Cargo) (New York) has issued this financial statement for the third quarter:

Atlas Air Worldwide Holdings, Inc. announced adjusted net income attributable to common stockholders of $27.4 million, or $1.09 per diluted share, for the three months ended September 30, 2014, compared with $28.6 million, or $1.13 per diluted share, for the three months ended September 30, 2013.

On a reported basis, net income attributable to common stockholders in the third quarter of 2014 totaled $27.6 million, or $1.10 per diluted share, compared with $23.7 million, or $0.94 per diluted share, in the year-ago quarter.

AAWH recently placed three incremental Boeing 747 freighters, a 747-8F and two 747-400Fs, into ACMI service for the benefit of DHL Express and Etihad Cargo, the fast-growing freight division of Etihad Airways. The placements increase the number of our aircraft in ACMI to 22 from 19.

In addition, AAWH recently announced the expansion of our 767 CMI service in North America for DHL Express. This expansion covers four incremental 767-200 freighter aircraft owned by DHL that we expect to begin flying during the first quarter of 2015.

Adjusted earnings in the third quarter of 2014 excluded a tax adjustment of $0.1 million, or $0.01 per diluted share, related to the company’s Global Supply Systems Limited subsidiary. Adjusted earnings in the third quarter of 2013 excluded an after-tax loss of $4.5 million, or $0.18 per diluted share, on the early extinguishment of debt, and a loss of $0.3 million, or $0.01 per diluted share, on the disposal of aircraft.

Third-Quarter Results

Profitability in our ACMI business during the third quarter reflected an increase in 747-8F revenue and an increase in CMI flying, offset by an increase in maintenance expense on our -8F aircraft and lower 747-400 flying by certain ACMI customers.

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.

Results in AMC Charter benefited from an increase in block hours and aircraft utilization, partially offset by a decrease in revenue per block hour due to a reduction of the average “pegged” fuel price set by the AMC. Stronger than expected demand for cargo flying and incremental passenger flying as a result of former competitors exiting the AMC Charter market drove contribution growth in the third quarter.

Profitability in Commercial Charter primarily reflected an increase in volumes and improvement in aircraft utilization compared with the third quarter of 2013. Charter operations during the quarter benefited from the broad-based uptick in demand, partially offset by additional travel and ground handling expenses from flying to high-cost locations.

Reported earnings for the period included an effective income tax rate of 29.1%, reflecting the ongoing beneficial impact of lower taxes for certain foreign subsidiaries in our Dry Leasing business.

Nine-Month Results

For the nine months ended September 30, 2014, adjusted net income attributable to common stockholders totaled $54.7 million, or $2.17 per diluted share, compared with $54.9 million, or $2.13 per diluted share, for the nine months ended September 30, 2013.

On a reported basis, nine-month 2014 net income attributable to common stockholders totaled $65.1 million, or $2.59 per diluted share, compared with $63.9 million, or $2.48 per diluted share, in the first nine months of 2013.

Cash and Short-Term Investments

At September 30, 2014, our cash, cash equivalents, short-term investments and restricted cash totaled $287.7 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 nine months 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.

Share Repurchases

During the third quarter, we repurchased 458,937 shares of our common stock for $15.0 million, or 1.8% of our outstanding common stock at June 30, 2014.

Future repurchases under our remaining $45.0 million authority may be made at our discretion, and the actual timing, form and amount will depend on company and market conditions.

Outlook

Airfreight volumes continue to improve, and recent industry reports suggest that airfreight demand will grow by several percentage points in 2014 – outpacing supply and driving the first real growth since 2010. We are seeing a general increase in demand across all regions, with the greatest growth in the transpacific market. An increase in online shopping and several new high-tech product launches during peak season also continue to favor airfreight.

As a result, AAWH anticipates adjusted and reported fully diluted earnings per share of approximately $1.33 to $1.43 in the fourth quarter. AAWH is also raising its full-year 2014 adjusted earnings outlook to approximately $3.50 to $3.60 per diluted share, and our reported earnings outlook to approximately $3.92 to $4.02.

For the full year, the company expects to fly approximately 160,000 block hours, with more than 70% in ACMI, approximately 10% in AMC Charter, and the balance in Commercial Charter. The Dry Leasing segment should show dramatic growth compared with 2013. While our share of military flying, mainly in passenger service, has increased due to our ability to capitalize on additional flying opportunities and a reduction in the number of carriers serving the market, we expect an overall decline in military demand in the fourth quarter of 2014 compared with 2013.

The company also expects aircraft maintenance expense to total approximately $190 to $195 million in 2014, primarily due to performing several conditions-based engine overhauls for our 747-400 fleet during the fourth quarter. Depreciation this year is anticipated to total approximately $120 million, and core capital expenditures are expected to total about $30 to $35 million, mainly for spare parts for our expanded fleet.

Copyright Photo: The relationship with DHL continues to expand. Polar Air Cargo’s Boeing 747-47UF N416MC (msn 32838) taxies at Los Angeles.

Atlas Air: AG Slide Show

Polar Air Cargo: AG Slide Show

DHL-Polar Air Cargo: AG Slide Show