Atlas Air Worldwide has reported income from continuing operations, net of taxes, in the first quarter of 2017 was $8.3 million compared with $7.7 million in Q1 last year.
President and chief executive officer, William J. Flynn (pictured below) says the company is off to an “exciting start in 2017” and is building on its 2016 achievements and growing earnings this year.
Flynn continues: “We will have a full year of contribution from Southern Air and expect a positive impact on our full-year results from our service for Amazon. We placed our second 767-300 aircraft into service for Amazon in February, and just added our third and fourth aircraft in May.
“In addition to announcing our first-quarter earnings and reaffirming our full-year earnings framework today, we are very pleased to have announced the placement of two of our 747-8 freighters with Cathay Pacific Cargo on an ACMI basis, with service beginning in May.
“Cathay Pacific is a prominent global airline based in Hong Kong and a standout performer in the airfreight market. We are delighted to work with Cathay Pacific’s cargo division to facilitate the strong growth of its global network.
“In addition to Cathay Pacific, we have recently announced other significant new customer agreements with Asiana Cargo, Nippon Cargo Airlines and FedEx that will all contribute to earnings growth this year.”
Flynn adds: “Earnings in the first quarter were in line with our expectations and our outlook for the year. Consistent with our prior outlook, we anticipate that our adjusted income from continuing operations, net of taxes, will grow by a mid-single-digit to low-double-digit percentage compared with our 2016 adjusted income of $114.3 million.
“Our view reflects our expanding business base and the ongoing development of our strategic platform. It also reflects solid demand from our customers, the benefits we expect from our fleet initiatives, and the steps we have taken to align our business with the faster-growing express and e-commerce markets.”
In Q1 higher ACMI contribution was primarily driven by the acquisition of Southern Air and lower costs related to crew training, partially offset by higher heavy maintenance costs and the temporary redeployment of 747-8F aircraft to the charter segment.
In dry leasing, lower revenue and segment contribution resulted from a decrease in revenue from maintenance payments related to the scheduled return of a passenger aircraft in 2016, partially offset by revenue from the placement of two 767-300 converted freighter aircraft with Amazon in August 2016 and February 2017, and one 767-300 converted freighter aircraft with DHL Express in February 2016.
As for the outlook, Atlas Air Worldwide continues to expect adjusted income from continuing operations, net of taxes, to grow by a mid-single-digit to low-double-digit percentage compared with 2016 adjusted income of $114.3 million.
In addition, we expect adjusted income from continuing operations, net of taxes, in the second quarter (Q2) of 2017 to be approximately 15 per cent to 20 per cent higher than Q2 2016 adjusted income of $20.2 million.
The company explains: “Our view reflects solid demand from our customers, the benefits we expect from our fleet initiatives, and the steps we have taken to align our business with the faster-growing express and e-commerce markets.
“We believe the current demand, including our new services for Asiana Cargo, Cathay Pacific Cargo, FedEx, and Nippon Cargo Airlines, the initial accretion from our Amazon operations, and the first full-year of contribution from Southern Air provide a strong foundation for earnings growth this year.
“Given the inherent seasonality of airfreight demand, we anticipate that results in 2017 will reflect historical patterns, with more than 70 per cent of our adjusted income occurring in the second half.”
Atlas Air Worldwide is the parent company of Atlas Air, Southern Air, and Titan Aviation and is the majority shareholder of Polar Air Cargo.