Titan Aviation, the dry leasing arm of Atlas Air Worldwide Holdings, and Bain Capital Credit have kicked off their freighter leasing joint venture, Titan Aircraft Investments (TAI), with the addition of the first aircraft to the portfolio.
TAI acquired a 777F from Atlas in November 2020 and dry leased it back to the group for an eight-year term, according to Atlas Air’s annual report for 2020, released Feb. 18 [FATs 005977-5978]. Atlas received $80.7 million in proceeds from the transaction. Boeing’s list price for a 777F is around $350 million.
The aircraft in question is unit 35606, the 2009-vintage 777F previously owned by Titan Aviation and reactivated last April after almost a year of storage for Atlas subsidiary Southern Air to fly on an ACMI basis for DHL Express. The 777, returned off lease by Emirates in 2019, was one of three “non-essential” aircraft Atlas had been looking to sell around the beginning of 2020.
Titan owned seven 777Fs, twenty-one 767-300Fs and one 737-300F as of Dec. 31, 2020.
During Atlas’ earnings call, President and CEO John Dietrich said Titan and TAI will look closely at all opportunities in the market to grow the portfolio, whether through the conversion of passenger aircraft or otherwise.
Titan and Bain announced the launch of TAI in December 2019, with Titan holding a 10% interest and committed to contributing up to $40 million of capital before December 2022. As of Dec. 31, Titan had contributed $4.7 million, according to the report.
Atlas said last November that it had secured $500 million in financing facilities for TAI.
Looking at Atlas Air’s 2020 results, the company reported $379.0 million in adjusted net income, a year-on-year increase of around 171%. Adjusted net income in the fourth quarter of 2020 grew by about 46% compared to the same period in 2019.
Overall block hours for the year were 7.4% higher than in 2019.
The revenue contribution of Atlas’ ACMI and CMI segment fell from 45.6% in 2019 to 37.7% in 2020, mainly because of freighters being redeployed to long-term charter flying. As a result, charter revenue accounted for 57.8% of overall revenue in 2020, compared with 47.7% in 2019.
Also of note, Amazon acquired approximately 1.4 million shares of Atlas Air’s common stock in the fourth quarter of 2020 and acquired approximately 1.3 million more shares of Atlas’ common stock this January, after exercising shares that had vested under warrants Atlas granted to Amazon in 2016. Rather than increasing its stake in Atlas, Amazon appears to be selling shares to keep its stake just below 5%.
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.