ATSG set to lease 24 more 767Fs through 2022

Air Transport Services Group (ATSG) affiliate Cargo Aircraft Management (CAM) expects to originate leases for at least twenty-four 767Fs in 2021 and 2022. Fifteen 767F placements are expected this year and CAM is negotiating the placement of nine more freighters in 2022. Amazon will take the bulk of this year’s placements, with five in the first quarter, two in the second and four in the second half. CAM plans to lease at least four 767 freighters to other customers in 2021. [caption id="attachment_415461" align="alignright" width="560"] ATSG’s airlines operated seventy-three aircraft at the end of 2020. (Photo/ATI)[/caption] The company is also in negotiations with external customers for nine 767-300F leases in 2022; these may or may not also come with a CMI arrangement. Further into the future, CAM is seeing interest from customers — some in new markets — for multiple leases of 767Fs that could potentially begin as far out as 2025, according to a discussion with analysts following the release of ATSG's 4Q earnings. . ATSG’s net income in 2020 was $32.1 million, 48% lower than in 2019. CAM saw its net fourth-quarter revenue increase 12% year on year, while revenue for the full year grew by 8%. CAM had eight aircraft awaiting or in conversion at the end of 2020. Since then, two have been ferried back to the U.S. (27448 and 29431). In 2020, CAM purchased two 767-300BCFs and nine 767-300ERs for conversion. The company has allocated a budget to purchase thirteen feedstock 767s this year for conversion and lease deployments. One of those aircraft is unit 29605 (ex-American Airlines), which CAM purchased and sent for conversion in February. Cargo Facts believes there are only two ex-American Airlines frames left that CAM has committed to purchase from Jetran (29603 and 29604). According to ATSG, limited conversion capacity will push some lease placements into 2022. Israel Aerospace Industries (IAI), with which CAM converts its 767s, has already increased its output by adding an extra line at the Mexicana MRO Services facility in Mexico City (MEX), but IAI’s pipeline also includes aircraft for DHL Express and Amazon, which acquired eleven 767-300ERs of its own last year and recently took redelivery of the first (25274, ex-WestJet) after conversion. ATSG is not concerned about feedstock. Chief Commercial Officer Mike Berger said the company is evaluating 767s powered by Pratt & Whitney engines and is “taking a hard look.” The vast majority of the group’s 767s are equipped with General Electric engines but ABX Air does have three that are Pratt-powered (24358, 24729 and 26544). In the ACMI segment, total block hours were up 14% for the year, despite passenger charter flying being down 37%. ATSG is hopeful its airlines, Air Transport International (ATI) and ABX Air, have a chance of being awarded CMI contracts for at least some of Amazon’s owned 767-300BDSFs. Rich Corrado, president and CEO of ATSG, confirmed that 321 Precision Conversions, the joint venture between ATSG and Precision Aircraft Solutions, expects to have its A321PCF conversion certified by the end of March, after which ATSG’s PEMCO affiliate will begin a conversion line in Tampa (TPA) around mid-year. CAM is evaluating feedstock options and will look at acquiring some aircraft in the second half of 2021 to start building a portfolio of A321-200PCFs, Corrado said. Cargo Facts Asia, taking place April 20-21 as a virtual experience, is the event for exploring opportunity in the Asia-Pacific region. The event continues to bring together the best, brightest, and most innovative executives in the global air cargo industry. Learn more and register at www.cargofactsasia.com .

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