Air Transport Services Group’s (ATSG) first quarter revenue was $143.6 million, flat with a year ago.
The provider of medium wide-body aircraft leasing, air cargo transportation and related services, reported these consolidated financial results for the quarter ending 31 March, while also announcing multi-year dry-leases of Boeing 767 Freighters and an amendment to its credit agreement with a consortium of banks.The new dry-leases are for two Boeing 767-200 Freighters for the Canadian all-cargo airline, Cargojet and two Boeing 767-300 Freighters for Amerijet, a Florida (US) based airline. Its agreement is a six-year term lease beginning in the third quarter of this year. Amerijet already leases three 767-200F. The Cargojet leases are for terms of up to three years, beginning in the second and third quarters of this year. These aircraft are in addition to the two 767-200F Cargojet leases from ATSG’s subsidiary Cargo Aircraft Management. According to ATSG’s first quarter results CAM generated just under $2 million more than it did during the same period last year. ATSG says this is because more CAM-owned aircraft had been in-service or available for service up to 31 March, including four Boeing 757 combined passenger and main-deck cargo aircraft. ATSG president and chief executive officer, Joe Hete, says: “This new business with two long-standing ATSG customers demonstrates their confidence in the value of mid-size freighters as vital components of efficient regional air-cargo networks.”According to Hete, these dry lease deployments are evidence of a “strengthening demand” for mid-size lift that the company had expected in the last quarter of 2013. Hete adds: “[It] bolsters our confidence that we can deliver at or above the upper range of our [Adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation] EBITDA guidance for 2014, based on improving performance, particularly in the second half of the year.” The EBITDA for the first quarter was $38.8 million, up four per cent from $37.3 million in the prior-year’s quarter.However, a $4.1 million increase in depreciation and amortisation expenses stemming from the addition of more modern aircraft to ATSG’s fleet, offset decreases in other operating expenses. This led to the company’s earnings being less than they were a year ago. Earnings for the first quarter were only $6.5 million, compared to $8.5 million in the same period in 2013.