Atlas Air likely to earn $1bn in 2022

Nasdaq-listed Atlas Air Worldwide Holdings is expecting to fly more than 350,000 block hours in 2022 with revenue of approximately $4.6 billion and adjusted EBITDA of about $1 billion on strong air freight environment as supply chain bottlenecks continue to drive demand.

"For the second quarter of 2022, we expect revenue to exceed $1.1 billion by flying more than 85,000 block hours. We also anticipate adjusted EBITDA of approximately $215 million, and adjusted net income to grow by a high-single-digit percentage," according to an official statement issued while announcing Q12022 results.

For the first quarter ended March 31, 2022, Atlas Air reported a revenue of $1 billion, EBITDA of $203 million and net income of $81 million. "Volumes in the first quarter of 2022 totaled 82,626 block hours compared with 88,523 in the first quarter of 2021."

Higher revenue reflected an increase in the average rate per block hour, which offset the reduction in block hours. "The higher average rate per block hour was primarily due to higher yields (net of fuel), including the impact of new and extended long-term contracts as well as higher fuel prices. Block-hour volumes reflected a reduction in less profitable smaller gauge CMI service flying as well as operational disruptions due to the spike in Omicron cases globally."

New and extended long-term contracts also benefitted operations. The improvements were partially offset by increased pilot costs related to the new collective bargaining agreement (CBA) and higher premium pay for pilots operating in certain areas significantly impacted by Covid-19, the statement added.

"We are off to an excellent start in 2022," says John W. Dietrich, President and Chief Executive Officer, Atlas Air. "We delivered strong earnings despite the pandemic-related operational challenges we continue to navigate.

"Atlas continues to demonstrate the value of airfreight as a vital component of the global supply chain. We are seeing a sustaining shift in long-term customer demand for Atlas' dedicated aircraft, and the speed and reliability airfreight provides. During the first quarter, our customers continued to enter and enhance long-term contracts with Atlas for dedicated freighter capacity.

"We are expanding and diversifying our customer base, and increasing flying under long-term contracts with attractive rates and guaranteed levels of flying. To meet customer demand, we are also investing in our world-class fleet by adding four new 747-8F and four new 777 freighter aircraft. All four of our new 747-8Fs have been placed with customers under long-term contracts, and we have strong interest in the new 777Fs as well."

Atlas Air completed the repurchase of 1.2 million shares under the $100 million accelerated share repurchase programme (ASR). "Additional purchases may be made at our discretion in the form of open market repurchase programs, ASRs, privately negotiated transactions, or a combination of these methods."

Atlas is purchasing five existing 747-400Fs at the end of their leases during the course of this year, one of which was acquired in March. The remaining four aircraft acquisitions are likely to be completed between May and December 2022.

Atlas Air is also scheduled to take delivery of four new Boeing 747-8 freighters by the end of the year. These factory-built freighters with nose-loading capability were ordered in January 2021. These aircraft are the last four 747-8Fs to be produced by Boeing.