Air Atlanta Icelandic performing well despite market challenges

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Business has turned out fairly well at aircraft lessor Air Atlanta Icelandic, according to chief executive officer, Hannes Hilmarsson (pictured).

The ACMI (Aircraft, Crew, Maintenance and Insurance) market has been challenging in the first quarter across the air cargo industry for companies leasing aircraft.

Hilmarsson says: “We started the year with relatively moderate expectations, knowing well what the current market conditions are like and the continuous pressure faced on yields.

“That being said, the first quarter of 2016 turned out relatively well, as the performance of our Boeing 747-400 Freighter fleet has been good, which we’ve capitalised upon and our fleet utilisation, which is our key driver for efficiency, has been above our initial projections.”

Demand in the air cargo ACMI market has in general been somewhat soft, he notes, but Air Atlanta Icelandic has seen fairly steady numbers in its own operation in recent months.

Hilmarsson says: “We expect the same trend to continue in the short term and we have a positive view on the market, but you have to be creative and always keep in mind that as an ACMI/charter provider you always have to offer your customers reliable, value added services, with strong emphasis on reliability, safety and efficiency.”

Most regions have proved challenging for ACMI firms, but what are strongest regions and where is Air Atlanta Icelandic seeing demand?

“Air Atlanta Icelandic had eight 747-400 freighters flying on ACMI programmes in first quarter of 2016, and the operation and has been reasonable and in line with the previous year, ” Hilmarsson notes.

He adds: “The majority of our freighters are concentrated operating for our customers via the Middle East and between Asia-Europe, as well as into Africa.”

There are growth opportunities and Hilmarsson says there are, and always be, certain key routes that will continue to require a 747-400F, as they cannot be serviced by passenger aircraft alone

He says: “And there simply is no other aircraft that can offer the same unique operating characteristics as the 747-400F. We’re therefore evaluating a couple of production freighter as possible fleet additions, parallel to our discussions with our customers.”

There are operating challenges in the marketplace for Air Atlanta Icelandic such as the slowdown and economic turmoil in Chinese markets, which Hilmarsson says of course, has “our attention, just like everybody else’s in the market”.

He notes: “The price and volatility of fuel will then of course continue to play a key role in determining the 747-400s level of efficiency in the coming years.”

The question is whether Hilmarsson sees Air Atlanta Icelandic expanding its fleet over the coming years.

It now operates a fleet of 15 – eight 747-400F and seven 747-400 passenger aircraft, all operated on year-round ACMI Projects.

He explains Air Atlanta has “excellent economies of scale and operational efficiency” through the fleet it runs, but is in a position to expand.

Hilmarsson says: “Given the size of our operations, availability of crew and built-in flexibility, we’re in a good position to add more 747-400Fs to the fleet in 2016, should there be demand in the market which we feel likely given recent developments.”

He concludes that Air Atlanta Icelandic entered 2016 backed by 30 years of solid reputation for delivering quality ACMI services to both passenger and cargo customers.

He explains that the future is looking bright and it is looking to grow: “Our position in the market today remains strong and it’s steadily improving, and we are eager and motivated to continue our journey to make Air Atlanta Icelandic the first choice when international airlines and global forwarders look for additional capacity or a solid partner to work with.”