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ATSG adds 777 platform through Omni Air acquisition

Caryn Livingston by Caryn Livingston
October 2, 2018
in Carriers, Freighter Aircraft, News, News Archives, Strategy
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The Omni acquisition gives ATSG access to ten 767 feedstock aircraft for passenger-to-freighter conversion.

Ohio-based Air Transport Services Group, Inc (ATSG) is acquiring Oklahoma-based Omni Air in a deal that will add thirteen additional aircraft to ATSG’s fleet, including the first three 777 aircraft in the aircraft leasing specialist’s portfolio. The cash price of the acquisition is listed at $845 million, and the deal is expected to close later during the fourth quarter of this year, pending customary regulatory approvals.

Omni Air is a passenger ACMI and charter service provider and is the leading provider of passenger airlift services to the US Department of Defense (DoD) through the Civil Reserve Air Fleet program, in which ATSG’s subsidiary carriers ABX and ATI are also participants. Following the acquisition, the largest share of ATSG’s revenue (about 33%) will come from contracts with the DoD.

The Omni fleet includes seven 767-300ER, three 767-200ER and three 777-200ER aircraft. While they are currently engaged in passenger ACMI or charter service, all of the aircraft types in Omni’s fleet offer substantial promise for ATSG’s future cargo business. ATSG’s current cargo fleet is made up of 767Fs as well as narrowbody aircraft including 757Fs and combi aircraft, and 737-400Fs. The acquisition of Omni, which will operate as a carrier subsidiary still based in Tulsa, adds new cargo possibilities for utilization of 777Fs.

During a call today to discuss the acquisition, ATSG’s COO, Rich Corrado, noted that a 777 platform presents a couple of major opportunities for ATSG’s cargo business. One such opportunity is the potential for CMI operations of 777Fs on behalf of major express carrier DHL, which in July announced an order for fourteen of the freighters. The 777F’s longer range, compared to ATSG’s current aircraft portfolio, also opens up the potential of intercontinental connectivity and the deployment of its 767Fs and other aircraft into new cargo markets.

Omni’s current 767 passenger fleet also presents opportunities for ATSG’s cargo operations. The 767 airframe model has been particularly attractive to leasing specialists like ATSG and Atlas Air Worldwide Holdings, which each lease twenty 767 freighters to Amazon for its Amazon Air operations. However, with increased interest in converted 767Fs, suitable feedstock has become more difficult to come by. ATSG’s acquisition of Omni will allow Omni to operate its 767s for a number of years in passenger configuration until they reach an age that makes them good candidates for passenger-to-freighter conversion.

Those interested in learning more about 767F and 777F operations are invited to join us 10-12 October at  Cargo Facts Symposium, where ATSG’s Rich Corrado and Mike Berger will join roundtable panel discussions on air freight trends and e-commerce. For more information, or to register, visit www.cargofactssymposium.com.

Tags: 767777FACMIATSGDHLOmni AirStrategy
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