Atlas cleared to fly passengers for the US Military

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The US Department of Defense granted approval for ATLAS AIR (the ACMI subsidiary of ATLAS AIR WORLDWIDE HOLDINGS) to provide passenger charter service for US military personnel. Atlas is a long-time provider of cargo lift to the US military, and last year entered the passenger business with the operation of 747-400 pax aircraft for Angola-based SonAir. Atlas said it would begin military passenger operations this month with a leased 747-400

Atlas Air Worldwide Holdings (AAWW) reported first-quarter net income down 68.9% y-o-y to $10.5 million, as total revenues were up 0.8% to $297.6 million. Operating income for the quarter was down 65.7% to $16.5 million.

Atlas said that higher maintenance expenses (up 58.4% to just over $50 million) accounted for most of the decline in net income, although costs for the acquisition of two 747-400BCFs and startup costs associated with passenger operations for the US military (see above) also contributed. The company pointed out that all of these costs were for items that would contribute to earnings beginning in the second quarter.

In its core ACMI business, Atlas reported block hours up 22.0% to 23,699, and revenue up 29.9% to $146 million. The company’s Commercial Charter segment also reported strong gains in hours and revenue. The only negative operational result was a decline in AMC Charter flying, but this was mostly the result of an unusual spike in military charter flying in 1Q10, and was expected.