Rising costs cut Atlas Air Worldwide's US$10.5 million first quarter profit

ATLAS Air Worldwide Holdings (AAWW), parent of Atlas Air and majority shareholder of Polar Air Cargo Worldwide, has announced 222 per cent fall in first quarter net income to US$10.5 million, drawn on revenues of $297.6 million, which was up 0.88 per cent.


Results include an increase in maintenance and start-up expenses for 747-400 Boeing converted freighters and its new troop plane business, which are expected to contribute revenues in the second quarter.


First-quarter results were positively affected by revenue and volume growth in the company's core ACMI business, including the ongoing ramp-up of its CMI service. Increases in commercial charter revenues and volumes also reflected strength in the company's South American charter business.


The company expressed confidence that "growth initiatives, including anticipated start of Boeing 747-8 freighter operations in the fourth quarter of 2011, will drive future gains in revenue."


AAWW's guidance for the year is based on the assumption that air freight demand will continue to improve in general and for the company's widebody freighters.


President and CEO William Flynn said expansion of its CMI service for Boeing and SonAir and its recently announced expansion into troop carrier services for the Pentagon are expected to result greater profits.


"We expect to drive our revenues and earnings to levels significantly higher than those we expect to achieve in 2011," said Mr Flynn.


Mr Flynn noted the company also expanded its express network ACMI service for DHL Express to eight aircraft from six in late March, and have now deployed 20 of its twenty-four 747-400 freighters in ACMI.


"We anticipate steadily improving results throughout the year. Our guidance continues to assume that we will receive and place into service three 747-8Fs from Boeing in the beginning of the fourth quarter of 2011. To date, we do not have a final delivery schedule agreement with Boeing," he said.


The company said it is deploying two 747-400 Boeing converted freighters acquired on operating leases in its military and commercial charter businesses in the second quarter.
(Source:http://www.schednet.com)