Atlas Air Worldwide Holdings on Wednesday said it has merged the operations of subsidiary Southern Air under a single operating certificate held by sister cargo airline Atlas Air.
Southern Air will no longer exist and the livery on its aircraft will be phased out.
Atlas Air is the world’s largest operator of Boeing 747 freighter aircraft and also flies two dozen 767 medium widebody cargo jets. With the addition of Southern Air on the same operating certificate, Atlas adds about nine large 777s and eight 737-800 narrowbody jets used on shorter, regional routes. The move provides customers access to a wider range of aircraft, a broader array of services, greater scale and an expanded global footprint, Atlas said.
Atlas Air Worldwide (NASDAQ: AAWW) acquired Southern in 2016. A new pilot contract set in September by an arbitrator over union objections was the final piece necessary for the parent company to eliminate Southern’s airworthiness certificate and integrate the companies.
The merger consolidates labor agreements and allows pilots to operate both route structures. It also allows the company to merge maintenance contracts and eliminate duplicate staffing requirements, such as keeping separate dispatch units — all of which are expected to provide efficiencies with operations, training and administrative support while improving flexibility — according to aviation experts.
The Federal Aviation Administration recently signed off on Atlas’ single operating certificate. The FAA operating certificate ensures a carrier has the processes, programs, systems and compliance methods to safely fly commercial aircraft.
Southern Air, based in Florence, Kentucky, supports large combination carriers, as well as the U.S. Department of Defense. It was founded as Southern Air Transport in 1947. James Neff restarted operations in 1999 from the assets of the troubled carrier. Private equity group Oak Hill Capital Management bought a majority stake in the airline in 2007. A decade ago Southern entered into a multi-year contract to support DHL Express’ overnight package delivery service. It emerged from a year in bankruptcy in 2013.
Atlas Air, which provides line-haul transport for Amazon Air (NASDAQ: AMZN) and DHL Express, as well as long-term charters for customers such as Flexport and the Department of Defense, reported strong third-quarter profits. Earlier this week it announced a contract expansion with Cainiao, the logistics arm of online retail giant Alibaba, to provide dedicated contract carriage from China to South America.
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