Atlas posts US$23.4 million profit after $5.3 million loss

ATLAS Air Worldwide Holdings, Inc (AAWW), a provider of global air cargo assets and services, has posted a record first-quarter net profit of US$23.4 million compared to a loss of $5.3 million a year ago.

While global airfreight traffic remains weak, it appears to be showing signs of bottoming, said AAWW president and chief executive officer William Flynn.Capacity reductions and the retirement of older aircraft are accelerating, which will mitigate the impact of reduced demand, he said.

First quarter 2009 operating revenues amounted to $244.5 million compared with $373.0 million in the year-earlier period, with the decrease mainly due to the deconsolidation of Polar Air Cargo Worldwide for reporting purposes. Pretax earnings stood at $38.5 million.

Our record first-quarter earnings reflect the first full quarter of express network ACMI operations pursuant to a long-term commercial agreement that commenced in the fourth quarter of 2008, said Mr Flynn.

The implementation of express network ACMI service has enhanced the quality and visibility of our earnings. It has transformed expected margins on 747-400F aircraft assets that had been deployed in our former scheduled service segment, where AAWW was responsible for fuel and yield risk, to levels consistent with our core ACMI business, he said.

Using that measure, total direct contribution by our reportable segments rose to $52 million in the first quarter of 2009, an increase of $33.6 million compared with the first quarter of 2008.

In ACMI, direct contribution rose to $27.3 million in the first quarter of 2009, an increase of $21.6 million from the first quarter of 2008, which reflected the positive impact of an additional eight 747-400F aircraft dedicated to express network ACMI service.

Combining the $21.6 million improvement in ACMI direct contribution with $12.6 million in benefits from avoiding the scheduled service losses we incurred in the first quarter of 2008, the year-over-year improvement in direct contribution from these operations totalled $34.2 million, primarily due to our business transformation.

Record first-quarter earnings were achieved despite a 14.3 per cent reduction in AMC charter revenue compared with the first quarter of 2008. AMC flying in the first quarter of 2009, however, was significantly higher than the flying levels experienced in the fourth quarter of 2008. Increased levels of AMC demand are expected to continue throughout the second quarter of 2009, said a company statement.

Sixteen of the company's 747-400 freighters are under contract throughout 2009, and another has a contract that is renewable in the second half of 2009. Three additional -400Fs are primarily flying AMC and Commercial Charter missions, while seven remaining 747-200s are being utilised at current AMC demand levels.

Revenues and pretax earnings for the first quarter of 2009 also included a $10 million fee for the effective early termination of a contract for two 747-400F aircraft operated in express network ACMI. In addition, pretax earnings for the quarter included gains of $2.7 million on the early elimination of debt at a discount and $1 million on the sale of an aircraft and retired engines.

Source: Transportweekly