Mixed second-quarter results for Atlas

Atlas Air Worldwide Holdings (AAWW) reported net income up 47.5% y-o-y in the second quarter to $29.6 million, as total revenue rose 9.3% to $441.2 million. Operating income for the quarter was down 45.0% to $26.7 million.

The odd discrepancy between net income and operating income was the result of one-time tax benefit of $24.0 million, and a one-time loss of $9.4 million related to the exchange of used spare engines for new. Adjusting for these items, and for some minor one-offs in 2Q13, net income was down 22.1% to $15.9 million.

We will offer a more detailed analysis in the upcoming August issue of Cargo Facts, but briefly:

• Block hours in the company’s core ACMI segment (which includes CMI operations) were down 2.5%, but this was offset by a 5.3% increase in revenue per block hour. Revenue from ACMI operations was up 2.6% to $186.7 million, but direct contribution was down 19.9% to $44.1 million

• Commercial Charter block hours, revenue per block hour, and total revenue were all up, direct contribution remained negative. Atlas said results in the segment “reflected a decrease in market rates and increases in maintenance and crewmember travel expense, partially offset by an increase in block-hour volumes.”

• In the AMC charter segment, the recent trend of decreasing cargo operations and increasing passenger operations continued, with the net result of a 23.4% increase in direct contribution to $15.6 million.

• AAWW’s dry-leasing operations (Titan Aviation Leasing), revenue and profitability grew following the addition of three 777Fs in January 2014 and two in July 2013 – all with long-term leases attached.