In 2009, Atlas Air Worldwide Holdings was a 747 freighter operator with a twenty-eight unit fleet that still included six 747-200Fs alongside its twenty-two -400Fs. It was focused almost entirely on ACMI-leasing those 747s to other airlines, and the big news was the recent sale of a 49% stake in its Polar Air Cargo subsidiary to DHL Express. Atlas operating for an express company? How strange.

But that move into the express world was just the first change of many, and now, seven years later, not only does the Atlas of today bear little relationship with the Atlas of 2009, but it is in the process of another huge change. A change summed up by CEO Bill Flynn at the company’s annual “Investor Day” earlier this week when he said: “We are moving away from heavy freight and into the integrator, express and e-commerce market. We are becoming a different company.”

While there was a certain amount of talk during the investor event about balance sheets, and leverage and such, one could be forgiven for thinking one had mistakenly logged into a lecture about the impact of e-commerce on the air freight and express industry. Fully one third of the expository slides were directly concerned with e-commerce, and quite a few more were at least tangentially related.

The point? It is e-commerce that is driving growth in the air freight and express industry, and Atlas intends to capitalize on that growth.

As shown in the Atlas slide at right, express air traffic grew 4.9% in 2015 – twice the rate of overall international air cargo traffic – driven by 20% growth in e-commerce. And if you look at the five-year period since 2011, the difference is even more pronounced, with express traffic growing at an annual rate of 6.3%, while total international traffic grew at a rate of just 1.7%.

With that kind of growth in express, it is no surprise that, as Mr. Flynn said, Atlas is moving away from heavy freight and into the integrator, express and e-commerce market.

In a sign of how far Atlas has already moved in this new direction, 47% of the company’s large widebody freighters, and 100% of its medium widebody freighters are now flying in express service. But future change will go much deeper than aircraft allocation. As we reported last month, Atlas’ recent agreement with Amazon will see the e-commerce giant take a 20% stake in the company, with the opportunity to up the stake to 30%.

While Atlas’ Investor Day was, obviously, aimed at investors and potential investors, there was also plenty of food for thought about the air freight industry in general. Consider the slide at right showing the impact of e-commerce on the traditional retail supply chain.

While it is true that no airline – not Atlas, nor any other carrier – can fly any faster between airports tomorrow than it did yesterday, any airline that wants to avoid losing business needs to work with its supply chain partners in a way that meets the demands of the new retail world. This is going to require some serious re-thinking on the part of many general freight operators about the way they run their business.

Interested in learning more about the impact of e-commerce on the air freight industry? Then join us at the Cargo Facts Symposium in Miami in October, where Atlas’ Chief Commercial Officer Michael Steen will share more of his company’s thoughts on the subject. To register, or for more information, visit the Cargo Facts Symposium website.

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