Atlas Air posts double digit growth in revenue in Q3
Nov 2, 2018: Aircraft leasing services provider Atlas Air Worldwide Holdings saw volumes in the third quarter of 2018 increase by 14 percent to a record 73,672 block hours, with revenue growing 23 percent to $656.6 million.
The US-based company says that the strong third-quarter earnings growth was driven by ongoing market strength, customer demand and business development.
On an adjusted basis, income from continuing operations, net of taxes, in the third quarter of 2018 was $43.8 million from $29.7 million in the year-ago quarter. Adjusted EBITDA increased $25.3 million over the year-ago period to $124.8 million.
Talking about the results, William J Flynn, president and CEO said: “We are in a good place to deliver quality results today and in the future. We have the aircraft and provide the services that customers want. We are focused on the right markets. And we are executing on strategic initiatives to grow and diversify our fleet, expand our customer base and enhance our business mix.”
“Secular trends are driving opportunities and growth in airfreight. And our focus is on express, e-commerce and fast-growing regions where efficient, time-definite, freighter networks are essential to meet the growing demands of businesses and consumers.
“Looking to the full year, we continue to expect our revenue to exceed $2.6 billion. We project adjusted EBITDA to increase to more than $525 million. And we anticipate our full-year adjusted net income to grow near or above 50 percent compared with 2017.”
ACMI segment saw 13 percent rise in block hours, reflecting increased 767 flying for Amazon and the start-up of 747-400 flying for several new customers (Including Asiana Cargo). At $288.6 million, operating revenue for this segment was higher than the same quarter of 2017 when it totalled $258.1million.
Revenue per block hour during the quarter was relatively in line with the third quarter of 2017, primarily due to a mix effect reflecting an increase in widebody 747-400F ACMI flying that was offset by an increase in smaller-gauge 767 CMI flying.
The company’s charter segment business during the period was primarily driven by an increase in military and commercial cargo demand and higher yields excluding fuel, partially offset by an increase in heavy maintenance. Higher average block-hour rates during the quarter primarily reflected higher fuel prices and higher yields excluding fuel. The operating revenue for this segment increased year on year from $243.6 million to $322.8 million for the quarter.
In Dry leasing, higher segment contribution primarily reflected the placement of additional 767-300 converted freighter aircraft throughout the second half of 2017 and first three quarters of 2018, as well as the placement of one 777-200 freighter in February 2018 and a second one in July 2018.
Flynn continued: “Our full-year outlook reflects our expectations for another great fourth quarter. We see solid peak-season yields and volumes, including the additional seasonal flying we do for express and e-commerce operators. And we anticipate record fourth-quarter block hours, revenue, adjusted EBITDA and adjusted net income.
“The fourth quarter will also benefit from our second 747-400 freighter for Asiana Cargo, which began flying in September, and our first 747-400 freighter for SF Express, China’s leading express operator, which began service in October. In addition, we expect to add two more 767-300 converted freighters for Amazon before Thanksgiving, which will bring us to 20 aircraft in line with the schedule we announced in May 2016.”
He concluded: “While tariffs and trade are important topics, neither we nor our customers, with whom we are in close contact, have seen a material impact on airfreight demand. Airfreight tonnage continues to grow from record levels, and airfreight demand is growing in line with its longer-term rate of about 4 percent per year, with express and e-commerce growing much more than that.”