Atlas Air Q4 profits fall ahead of delisting

All-cargo airline Atlas Air Worldwide recorded $287 million in fourth-quarter adjusted earnings before accounting measures, a 23.6% decline from the prior year, reflecting weak shipping demand that resulted in fewer flying hours and higher operating costs associated with weather disruptions.

Thursday’s earnings report is likely the last for Purchase, New York-based Atlas Air (NASDAQ: AAWW), which is being purchased by an investor group led by Apollo Global Management. The company has received all shareholder and regulatory approval and is only waiting for approval from the Department of Transportation. It expects the sale to close this quarter and be delisted from the NASDAQ exchange. 

Management did not issue guidance and will not hold a conference call. 

Atlas Air said fourth-quarter revenue ticked up 4.3% to $1.2 billion primarily due to higher fuel surcharges and yields, including from new and extended long-term operating leases and increased cargo flying for the U.S. military. Revenue gains were partially offset by a 7.7% reduction in aircraft utilization and costs related to weather disruptions. Severe weather events made it difficult to reposition crews in the U.S. because of widespread cancellations of commercial passenger flights. The company had to pay more for pilot overtime and crew travel costs because of higher airfares.

Full-year revenue increased $500 million to $4.5 billion. Net income fell 27.7% to $356 million.

“2022 was one of the best years in Atlas’ history,” President and CEO John Dietrich said.

The prior year was an outlier for Atlas and the air cargo industry because a series of unprecedented conditions combined to create extremely tight market conditions, which led to significant rate increases and record revenues that were not sustainable.  

The surge in air cargo demand during the pandemic was a boon to Atlas Air, which was in a loss position in 2019 due to write-offs on it fleet in a weak market.

Last month, Atlas Air took delivery of the final 747-8 produced by Boeing. The airline is operating the plane for Apex Logistics, a subsidiary of logistics giant Kuehne + Nagel. Atlas Air is the largest operator of 747 freighters in the world.

The airline also took delivery in late November of a 777 freighter that it is flying on behalf of Mediterranean Shipping Co. It is scheduled to receive three more 777s in 2023 that will be dedicated to MSC.

Atlas Air continues to purchase aircraft from lessors as their leases expire to ensure it maintains the capacity. In 2022 it bought five 747-400s and said it plans to acquire another one by April.

Click here for more FreightWaves and American Shipper articles by Eric Kulisch.

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