Revenue and Block Hours up 20% in Atlas 3Q
Atlas Air Worldwide Holdings reported a third-quarter net loss of $24 million, as total revenue jumped 19.6% y-o-y to $536 million. Operating income for the quarter more than doubled, to $53 million.
So, if the revenue and operating income gains were so good, why the reported loss? In a “no good deed goes unpunished” way, Atlas’ strong performance since signing the Amazon agreement has led to “an unrealized loss on warrants of $44.8 million.” Adjusting for this, as well as for several other one-time events (including the impact of the hurricanes), AAWW’s net income was $30 million, up 8.3% over 3Q16 — which more accurately reflects the current air freight demand environment.
On the subject of demand, Atlas has, in the last year, placed ten 747-400 and 747-8 freighters in new ACMI and CMI contracts, all either with Asian airlines, or focused on cargo demand into and out of Asia. Customers include Cathay Pacific Airlines, Asiana Airlines, Hong Kong Air Cargo (the cargo arm of Hong Kong Airlines), Nippon Cargo Airlines, Suparna Airlines (the former Yangtze River Express), and DHL Global Forwarding.
Closer to home, AAWW placed a seventh 767-300 freighter with Amazon in the third quarter, and the eighth, ninth, and tenth (of a total of twenty) in October.
Looking ahead, CEO Bill Flynn said that both through its own experience, and through feedback from customers, Atlas expected a very strong peak season this year, and continued strong demand growth through 2018. Flynn noted that the big driver of current and future demand for air freight is the rapid expansion of “the global middle class.”
On the subject of the ongoing labor-relations problem, Atlas noted that the hearing in the US District Court for the District of Columbia regarding the company’s request for an injunction to require the International Brotherhood of Teamsters to stop work slowdowns and service interruptions was completed in early November, with a ruling expected before the end of the month. In the meantime, the company and the union continue negotiations toward a new contract.
