US-based Air Transport Services Group (ATSG) and Sweden-based West Atlantic reached an agreement under which ATSG will acquire a 25% equity interest in West Atlantic, with the deal expected to close on 2 January 2014.
ATSG is the parent of all-cargo carriers ABX Air and Air Transport International (ATI), as well as of aircraft manager/lessor Cargo Aircraft Management, and MRO Airborne Maintenance & Engineering Services (AMES). It’s 57-unit fleet includes nine 767-300Fs, forty 767-200Fs, five 757-200Fs, and three 757-200 combis. Some of these freighters are dry-leased to other carriers through the CAM subsidiary, but most are operated by ABX and ATI in ACMI or charter service, with DHL Express as the company’s largest single customer.
West Atlantic, the largest operator of regional aircraft in Europe, is the parent of all-cargo carriers Atlantic Airlines and West Air Sweden. Its 40-unit fleet includes thirty-three ATPFs, four 737-300Fs, and three CRJ200PFs. It operates primarily for the big express companies as well as for various postal organizations.
While few details of the agreement have so far been released, ATSG said the investment would include not just an equity stake but also “an expanded working relationship with West Atlantic’s management team.” ATSG also said the deal was a way for it to play “an increasing role in the growth of the air-cargo market in the EMEA Region and throughout West Atlantic’s range of operations.” For its part, West Atlantic will gain access to larger freighters than it so far has operated, allowing it to expand its business. West Atlantic will take its first 767-200F in the first quarter of 2014 for a contract already signed with an unnamed customer.
While the initial lease contract is for just one freighter, West Atlantic said it believes the European express market will see sufficient growth in 2014 to require at least two further 767 freighters.
As to the financial value of the transaction, ATSG said it would release full details in its year-end 10-K filing, but provided something of a clue when it said: “The cash consideration to be paid in January 2014 for the equity interest is significantly less than ATSG’s historical cost to purchase and modify a single 767 aircraft.”