Atlas Air parent loses $3.7 million in first quarter
Atlas Air Worldwide Holdings Inc. (AAWW), parent company of Atlas Air and Polar Air Cargo, Monday reported a first quarter net loss of $3.7 million, compared to a net income of $700,000 in the same quarter 2005.
Third quarter operating income dropped 65 percent to $7.1 million, from $20.5 million in the year-earlier quarter. Revenue decreased 4 percent to $332.1 million from $346.9 million.
“Results for the quarter reflect some tough comparables, with a reduction in military charter activity compared with last year and a related excess of 747-200 aircraft capacity that could not be fully and sensibly deployed elsewhere,” said Jeffrey H. Erickson, president and chief executive officer of AAWW.
“By comparison, our modest net profit in the first quarter of 2005 was based on much stronger military demand, a significantly higher block-hour utilization rate for our fleet, and much lower fuel prices. Results for both periods, however, also reflect the fact that the demand for air cargo capacity in the first quarter has historically been low following the seasonal holiday peak that traditionally begins in September and lasts through mid-December.”
Erickson also said the company will be cutting its capacity to improve its profitability. One of its Boeing 747-200 fleet was sold in April and there are plans to sell or lease five others by mid-year and retire its oldest aircraft at the same time.
“The potential benefits from our cost-savings and revenue-enhancement program are substantial — more than $100 million over the next three to four years. So are the benefits associated with the multi-year effort we’ve begun to phase older aircraft and eventually replace them with new, more efficient aircraft. Finally, the expansion of our operations in China provides us an opportunity for further growth in a vibrant market,” said Michael L. Barna, AAWW’s senior vice president and chief financial officer.
“Just as we expect to see a seasonal pick-up in business this year, we believe that our strategic initiatives are setting the stage for significantly enhanced long-term growth prospects, and we continue to be very excited about the future of AAWW,” Erickson said.