Air Transport Services Group (ATSG) has turned the losses of 2017 into a third quarter profit, but pilots are unhappy at the pace of contract negotiation.
In the third quarter of 2018, net earnings were $33.1 million compared to a loss of $32.8 million in the same period last year.
For the first nine months of 2018, profits were $73.6 million having made a loss of $76.6 million in 2017.
Third quarter revenue was down from $254.1 million to $204.9 million and nine month revenue was down from $745.2 million to $611.5 million.
ATSG president and chief executive officer, Joe Hete says the airline business performed well and has high hopes for the peak season.
He says: “We intend to add five more 767-300 freighters, including three more external dry leases, to our in-service fleet by the end of the year, or all ten of the 767s we planned to deliver in 2018. Additionally, we expect to dry lease two 767-200 freighter aircraft, currently on lease to our airline affiliate, to external customers by year-end.”
ATSG’s leasing business, Cargo Aircraft Management (CAM) saw third quarter revenue stay flat at $58.8 million with higher revenue from additional aircraft in service being offset by revenue loss from transitioning aircraft, fewer engine leases and lower revenue for maintenance services for lease customers.
Pre-tax earnings fell slightly from $19.4 million to $19 million in the third quarter with improved lease revenues being offset by increased depreciation and lower revenue from engine leasing and lease-customer maintenance support.
CAM acquired one Boeing 767 for freighter conversion in the third quarter, and expects to acquire another four in the fourth quarter.
Hete says: “Our outlook for the fourth quarter remains very positive, with five newly converted 767-300 freighters set to enter service, including three that will be deployed under long-term external leases and two that will support peak season ACMI demand. We are focused on providing our customers with excellent service during what we anticipate to be a very busy fourth quarter.”
Responding to ATSG’s third quarter results, Airline Professionals Association Teamsters Local 1224 executive council chairman, Rick Ziebarth who is a pilot at ATSG subsidiary ABX Air says pilots are “disappointed” at the lack of progress management have made to achieve a collective bargaining agreement.
He says: “As we approach the holiday season, we prepare for some of our busiest days. We want to do the best job possible and help ABX Air be successful. It is crucial that ATSG focus on concluding an amended contract for the pilots of ABX Air in order to attract and retain the pilots necessary to be competitive in the cargo industry. With four years of negotiations and zero progress, the pilots’ patience is wearing thin.”
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