CEO out as ATSG puts brakes on 767-300F conversions

ATSG is slowing its 767-300ER conversions as it tries to cut capital expenditures and adjust its business strategy under the guidance of new Chief Executive Joe Hete. “We are introducing no additional 767-300s for conversion beyond the seven currently in process,” Hete said in today’s earnings call. [caption id="attachment_56865985" align="alignright" width="450"] CAM has leased 767-300 freighters to new operators in Europe this year. (Photo/Georgian Airlines)[/caption] ATSG forecasts $505 million in capital expenditures in 2024 because of “fewer conversions and feedstock purchases due to softening demand,” the company stated in a release. That is $100 million less than estimates provided at the end of September and down $280 million from 2023’s projected spend, according to the release. “We need to take a more conservative view of when and where we can best invest for the greatest shareholder return and sharply reduce our capital spending program in 2024 and beyond,” Hete said. Hete takes over for Corrado ATSG announced Hete’s appointment as CEO concurrently with its Q3 results, replacing Rich Corrado “effective immediately.” “This change is the result of careful and thoughtful deliberation by the board of directors,” Hete said during today's Q3 earnings call. He was ATSG’s CEO for nearly seventeen years before Corrado was appointed in 2020. Hete has been on the board of directors for the past three years. Demand for 767-300F declines Thirteen 767-300ERs were undergoing or awaiting conversion as of Sept. 30, ATSG said. Cargo Facts believes ATSG’s leasing division, CAM, has six or seven units at IAI’s facilities in Tel Aviv (TLV). The lessor took redelivery of one (25404, ex-Air Canada) at the end of October and another (40564, ex-ANA) this week. CAM expects to lease out six 767-300 freighters in 2024, Hete said. ATSG President Mike Berger said some customers notified CAM in mid-October of their weaker demand and outlook. “Our guidance reflects appropriate adjustments to address the potential effect of that new information,” he said. Mexico-based mas’ Chief Executive Andres Fabre said at the end of October that the carrier will stop flying its 767-300BDSFs , while Amerijet has not taken delivery of a 767-300BCF (25587, ex-Air Canada) it told Cargo Facts it would lease from CAM. Nevertheless, CAM delivered newly converted 767-300BDSFs to two new operators this year: Poland-based SkyTaxi and Georgian Airlines . Elsewhere, eleven 767-200BDSFs have returned off lease to CAM since September 2022, including two in Q3. The company expects to sell two of those in the this quarter and others in 2024, Berger said. Transition to Airbus freighters CAM is adding Airbus widebody and narrowbody freighters to its portfolio. Last month, it purchased two A330-300s (349 and 356, both ex-ULS Airlines Cargo) and one A330-200 (529, ex-Azul), and sent the two -300s for conversion with EFW. CAM anticipates delivering all three A330 freighters on lease in 2024, Berger said. The company leased two A321-200PCFs to Raya Airways in August and one to Global Crossing Airlines in October. CAM expects to deliver one more A321-200PCF by yearend and five in 2024, Berger said.

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