Atlas Air Worldwide Holdings faced tough questions about how the business was being run during its third quarter earnings call.
Adjusted income from continuing operations net of taxes was down 78.3% in the third quarter to $9.5 million and 64.8% to $41.3 million in the nine months to 30 September.
The third quarter performance was affected the global issues such as tariffs and trade tensions, while yields and volumes were lower than anticipated, and labour problems have not been resolved.
When announcing the results before the earnings call, chairman and chief executive officer William Flynn said the company expects to benefit from peak-season volumes and yields for express and e-commerce customers.
He also highlighted arbitration rulings in Atlas Air’s favour, ordering the pilots to negotiate new agreements.
Questions were raised about the pilot disruption came up, with executive vice president and chief financial officer Spencer Schwartz saying: “The impact from both the labour disruptions as well as the impact from the global trade tensions and tariffs are by far the two biggest issues that have impacted us.”
Blaming the union for not agreeing a new contract, Flynn says: “It’s clearly unfortunate that we had to go to court to obtain a preliminary injunction to address illegal behaviour, that’s something we simply had to do.”
Atlas Air will be assessing the business, with president and chief operating officer John Dietrich saying: “We’re looking at every aspect of the business aggressively, particularly in this environment.”
Costs are a major focus, with Dietrich continuing: “We’re looking at every line item, minimising discretionary spending, certainly controlling headcount. There is a lot of headway we can get tightening our relationships with our vendors that we rely on quite a bit for our high-cost items like heavy checks and engine overhauls.”
Atlas Air will also look at technology for flight planning, reducing fuel burn, and potentially cutting routes that are not profitable or not as good as they could be.
The transcript and recording of the third quarter results are available here.
