US-based Air Transport Services Group reported second-quarter net income up 37.5% y-o-y to $9.5 million, as total revenue rose 8.9% to $189.4 million. Operating income for the quarter was up 27.9% to $18.1 million.
ATSG is the world’s biggest lessor of medium widebody freighters, with a 57-unit fleet, including nine 767-300 and forty 767-200 freighters. It also has four 757-200Fs and four 757-200 Combis. ATSG is the parent of leasing and aircraft management company Cargo Aircraft Management (CAM), as well as of two airlines (ABX Air and Air Transport International), and MRO company Airborne Maintenance and Engineering Services (AMES). We will provide a detailed analysis of ATSG’s second-quarter and first-half results in the August issue of Cargo Facts, but highlights include:
- Discussing the results, CEO Joe Hete said ATSG “is in its best position in years.” He pointed out that while the company’s biggest customer, DHL Express, was reducing its commitment with ATSG slightly – returning two 767-200Fs in June and July, and planning to return a third in September, demand from other customers would more than compensate, with five aircraft to be deployed to new customers (including Cargojet, Amerijet, and West Atlantic) by the end of the third quarter.
- ATSG’s aircraft leasing business, Cargo Aircraft Management (CAM), agreed to purchase two 767-300BDSFs (24358, 24729) from Guggenheim Aviation Partners (GAP) at the end of September this year. The agreement includes an option to purchase a third (26544) in 2015. The two freighters to be purchased in September are units that ATSG is already operating under lease from GAP.The company’s ACMI Services segment had its first profitable quarter since 2011, with a pretax gain of $309,000 as compared to a $9 million loss a year ago and a $7 million loss in the first quarter.
- The AMES MRO unit opened a new hangar facility in Wilmington (ILN), capable of handling aircraft up to 747 size. AMES had an exceptionally strong second quarter.
- The four-unit 757-200 Combi fleet is now fully operational in service to the US military, and operations will not be affected by the drawdown of involvement in the Middle East.
Net income for the first half of 2014 was up 5.4% to $16.2 million, and looking ahead, ATSG said it expected to beat its previously released guidance for the full year.