Atlas Air Worldwide Holdings has recorded a net income of $7.7 million for the three months ended 31 March, 2016, compared with $25.8 million in the first quarter (Q1) last year.
Total operating revenue in Q1 2016, was $418 million, down on the $444 million in Q1 2015.
Atlas says in the charter market, results on a year-over-year basis were indicative of its ability to capitalise on the very strong demand for airfreight in the first half of 2015, which was driven by throughput issues at US West coast ports.
The company says lower revenue per block hour during the period was primarily due to a reduction in fuel prices in 2016 and the impact of higher rates related to the US West coast port disruption in 2015.
Atlas notes given the inherent seasonality of airfreight demand, it expects the majority of its earnings in 2016 to be generated in the second half. Unlike 2015, which benefited from increased first-half demand driven by US West coast port congestion, it anticipates results in 2016 will be more reflective of historical patterns.
President and chief executive officer, William J. Flynn says Q1 was in line with expectations and its outlook for growth in 2016, including the immediate earnings contribution it expects from its acquisition of Southern Air Holdings, which it closed on 7 April.
Flynn says: “As we also announced today, we are excited to begin a strategic, long-term relationship with Amazon. Our agreements with Amazon to provide and to operate 20 Boeing 767-300 converted freighters, in support of the continuing expansion of Amazon’s e-commerce business and to enhance its customer-delivery capabilities, are expected to be meaningfully accretive to our future earnings and cash flows.
“We expect this service to begin in the second half of this year, become accretive starting in 2017, and scale up to full service and full accretive benefits through 2018.
“In addition to being immediately accretive, our acquisition of Southern Air with its highly complementary 777 and 737 aircraft operating platforms will provide a broader array of services for customers and new avenues of business growth for us.
“We are eager to capitalize on our ongoing initiatives and our opportunities with Amazon and Southern to drive substantial value and benefit for customers.”