FO Cole Goldenberg
For Cole Goldenberg, an Atlas First Officer on the 767, it’s all about paying it forward.
“I wouldn’t be where I am today, if it weren’t for the people in my life and the community I found with NGPA.” Cole said. “All of it has inspired me to find ways to build that same kind of support system for others.”
The NGPA – or National Gay Pilots Association – is the largest organization of lesbian, gay, bisexual and transgender pilots, aviation professionals, and enthusiasts from around the world. Cole has been an active member since 2018 and has served on the Advocacy Advisory Council since 2019.
NGPA’s Advocacy Advisory Council is made up of eight members, including Cole, who are tasked with addressing advocacy issues and needs as they arise.
“We prepare a position, statement, or response, if recommended with a majority, to
FO Cole Goldenberg with a 767 Atlas plane
NGPA leadership,” Cole explained. “The Council ensures efforts and resources are best utilized and in line with NGPA’s mission, which is simple but powerful: Build, Support and Unite the LGBTQ aviation community worldwide.”
“Visibility is so important,” Cole continued. “I believe what Marian Wright Edelman, American civil rights activist said, ‘You can’t be what you can’t see.’”
To that end, Cole has also supported the NGPA’s Inclusion Training Team, which is in place to foster professional development and diversity within flight programs and companies. He is also working on starting a peer-to-peer mentorship program.
Cole at Southern Utah University for a speaking engagement about diversity in aviation
“I love being a pilot and I love working for Atlas,” Cole said. “It’s really by chance that I am doing this for a living. I never thought I could be a pilot. But after a family friend took me up in his small plane – that’s all I ever wanted to do. That flight changed my life and put me on a specific path – all thanks to a family friend who took the time to give me a glimpse into flying.”
And now Cole has made it a priority to do whatever he can to build a community that welcomes and inspires others to consider aviation as a career.
“It’s so important to help people grow in their own space. Atlas been a very accepting place and I consider it the blessing of a lifetime,” he said.
At Atlas Air Worldwide, we have a responsibility for the world in which we operate, and that includes supporting our local communities. Recently, a group of Atlas colleagues volunteered to support the development of the future talent pipeline through Junior Achievement’s Career Speakers Series.
For Atlas Executive Vice President and Chief Financial Officer Spencer Schwartz, who serves on Junior Achievement of New York’s Lower Hudson Valley Advisory Board, the annual Career Speakers Series is an opportunity to connect with elementary school students to share experiences that will help them prepare for success.
“This year, Yonkers, N.Y. students from second to sixth grade met with Atlas employees in various roles, from diverse backgrounds, who opened up a world of possibilities for the students as they begin to think about their futures,” Spencer said. “I was amazed by the tremendous response from our colleagues who volunteered to speak to the students. It is inspiring to see the spark of curiosity and interest that develops in students as they engage with these dedicated professionals.”
Mike Ragusa, Senior Director, Business Resiliency at Atlas, says he was prompted to volunteer this year (for the tenth year in a row!) because he knows the value of sharing insights and personal stories to empower young.
“Growing up as a child of immigrant parents, I didn’t have the opportunity at an early age to learn about the economy, job skills, interviewing, and a whole host of other financial literacy topics in school,” Mike explained. “When Spencer explained what the Junior Achievement program was about, it was important to me to participate.”
“The students were truly engaged and inspired by the stories and experiences that members of the Atlas team shared,” said Catherine Danyko-Sage, Director, Lower Hudson Valley Operations for Junior Achievement of New York. “The Atlas team really connected with students in the virtual setting to create a spectacular event.”
Ana Martinez, Director, Continuous Improvement, agreed. “It was clear by the questions the students asked, that the session was important to them.” She added, “I appreciated the opportunity to share my background and how important it is to find your passion and work to turn that into a career. I wanted them to understand that if I was able to do it, they can too!”
For J.C. Nolan, Senior Director of Intelligence & Security, the time with the students went by way too quickly. “I volunteered for the Junior Achievement event because I have always been passionate about education. To see how engaged the students were during our presentations was truly a joy,” he said. “I am so grateful to Spencer and the Leadership Team for making this event possible. While it may have looked different than previous years because of the virtual environment, I believe the impact was the same. It was a very proud moment for me to represent Atlas and it made me reflect on how thankful I am to be part of the Atlas family.”
Atlas Air and Polar have each introduced a youth scholarship through the Los Angeles-based Flight Path Museum & Learning Center, with the goal of encouraging and supporting students with an interest in pursuing careers in aviation.
The scholarships are part of a Platinum Plus sponsorship that both Atlas and Polar have pledged to Flight Path, signifying support for the organization’s mission to educate and celebrate aviation in Southern California – a key port for both companies.
Flight Path administers several scholarships each year to encourage youth to follow their aviation dreams. The Atlas Air and Polar scholarships each offer one eligible student $2,500 toward tuition for a field of study or certificate that pertains to the aviation industry.
In the press release announcing the scholarships, John Dietrich, President & CEO, Atlas Air Worldwide explained how these scholarships underscore the company’s commitment to building a diverse and sustainable talent pipeline for the future:
“Airfreight is a significant pillar in our nation’s supply chain; its speed and flexibility fuels large industries and small businesses, and rapidly delivers high-value and time-critical cargo,” said John. “We look forward to our role as a Platinum Plus sponsor of Flight Path Museum and to partnering with the museum on critical work to identify and empower the next generation of aviators.”
Flight Path was established in 1995 as a nonprofit, community-based organization to honor aviation pioneers, recognize the economic importance of aviation and aerospace, as well as to encourage youth to pursue education and careers in aviation-related fields. In 2002, Flight Path was invited to open and operate the only aviation learning center and museum in California within a major airport. Situated at Los Angeles International Airport (LAX), Flight Path Museum LAX has reached thousands of residents and visitors to Los Angeles with historical exhibits, educational tours and programs, research facilities and community events.
Duncan J. McNabb Named Chairman, Board of Directors
William J. Flynn, Current Chairman, Retires
New Directors Beverly K. Goulet and Carol J. Zierhoffer Elected to Board
Current Board Member Jane H. Lute Retires
Purchase, N.Y., May 25, 2021 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced changes to its Board of Directors. General Duncan J. McNabb, U.S. Air Force (retired), previously Lead Independent Director of the Board, has been named Chairman. General McNabb succeeds William J. Flynn, who is retiring from the Board. Current Board member, Jane H. Lute, is also retiring. The company confirmed that Beverly K. Goulet and Carol J. Zierhoffer have been elected to the Board of Directors during the Annual Shareholder Meeting today. These changes are effective immediately. The total number of Board members remains consistent at ten.
Chairman Transition
“It has been my honor to serve as Chairman of the Atlas Air Worldwide Holdings Board,” said Mr. Flynn. “Duncan has served as Lead Independent Director and demonstrated exceptional leadership, acumen and insight that make him the clear choice to lead the Board and govern the company on its path forward. In addition, the appointment of Beverly Goulet and Carol Zierhoffer underscores the commitment of the Nominating and Governance Committee and of the full Board to continue to leverage a diversity of skill sets and professional backgrounds. I feel confident in the path ahead for Atlas.”
“I’m honored and really looking forward to expanding my role on the Atlas Board by serving as Chairman,” said Gen. McNabb. “Having served as a Board Member for nearly ten years, I’ve had the privilege to build a deep understanding of Atlas and look forward to leading the company forward. I commend Bill for his strong leadership in his role as Chairman, and previously as Chief Executive Officer. Bill’s leadership and passion for this company and the industry over the last 15 years has been a driving force behind Atlas Air Worldwide’s success.”
Gen. McNabb has been a member of the Atlas Air Worldwide Board since July 2012, and was named Lead Independent Director in September 2019. He served as Chairman of the Board’s Nominating and Governance Committee from May 2017 to December 2019, and as a member of the Nominating and Governance Committee since June 2014 and a member of the Audit and Finance Committee since December 2012.
Gen. McNabb retired from the U.S. Air Force following an exceptional 37-year career. He served as Commander of the Air Mobility Command from 2005 to 2007 and was the 33rd Vice Chief of Staff of the United States Air Force from 2007 to 2008. Gen. McNabb completed his military service as Commanding General of the United States Transportation Command (USTRANSCOM) from 2008 to 2011. USTRANSCOM is the single manager for air, land and sea transportation for the Department of Defense (DOD). He also served as DOD’s Distribution Process Owner, overseeing DOD’s end-to-end supply chain, transportation, and distribution to our armed forces worldwide. He commanded more than $56 billion in strategic transportation assets, over 150,000 service personnel and a worldwide command-and-control network.
Newly-Elected Directors
“Beverly and Carol bring strong skills, background, leadership and industry expertise to the boardroom,” said Gen. McNabb. “Their election underscores Atlas Air Worldwide’s commitment to leverage a diversity of skill sets and professional backgrounds. Beverly has extensive senior executive experience in the airline industry, and Carol is an expert in information technology and cybersecurity. I know their respective experiences and insights will enrich our discussions, analyses and strategic governance.”
Ms. Goulet served in several senior level roles with the American Airlines Group Inc., including Senior Vice President and Chief Integration Officer, Executive Vice President and Chief Integration Officer, and Vice President, Corporate Development and Treasurer. Prior to joining American Airlines, Ms. Goulet practiced corporate and securities law for 13 years. She received a Bachelor’s degree and a Juris Doctor from the University of Michigan. She also serves as Director for Xenia Hotels & Resorts, Inc. and Rolls-Royce Holdings PLC.
Ms. Zierhoffer has more than 30 years of experience in the information technology industry. Most recently, and until her retirement in October 2019, Ms. Zierhoffer served as the Senior Vice President and Global Chief Information Officer at Bechtel Corporation, where she oversaw the company’s business and technology solutions, cybersecurity, infrastructure and operations, big data and analytics innovation, emerging technology and knowledge management globally. Additionally, Ms. Zierhoffer served in CIO roles with Xerox, ITT Corporation and Northrop Grumman. She currently serves as Director for Allscripts Healthcare Solutions, Inc. and Vizient Inc., and is an Executive Advisory Board Member of OpsCruise, Inc. and Founding Board Member of the nonprofit A Little Compassion.
Retirement of Jane Lute
Atlas Air Worldwide Board member since May 2018, Ms. Lute previously served as Deputy Secretary for the U.S. Department of Homeland Security and is a member of several international commissions focused on cybersecurity and the future of the internet.
“We are grateful for Jane’s service. During her time on the Board, Jane brought tremendous leadership experience, and we have benefited greatly from her expertise in cybersecurity and public policy matters,” said Gen. McNabb.
About Atlas Air Worldwide:
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers the broadest array of Boeing 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasairworldwide.com.
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Since 1972, JFK Run the Runway 5K has offered runners the unique and thrilling experience of running down one of the runways at John F. Kennedy International Airport in Queens, New York. This year, Atlas sponsored the virtual event, which benefited the Aviation High School Education Foundation, also in Queens.
“The Atlas team is committed to supporting the communities where we live and work, including at JFK, a critical station in our global operations,” said Lillian Dukes, Senior Vice President, Technical Operations, who participated in the race. “Our sponsorship will help fund scholarships for the next generation of talent interested in technical and aviation careers.”
“I am so proud of our Atlas colleagues – from station managers and crews to Tech Ops to Sales – who came out to support this local event,” said Dan Lansing, Senior Director Ground Operations. “The upside to the virtual race is that a number of our colleagues who are based outside of the United States could participate.”
More than a dozen Atlas employees joined in the race with nearly 200 virtual participants. Two Atlas runners placed on the virtual podium – Paul Drew, Senior Director Sales and Marketing, Business Development, and Richard Broekman, Senior Vice President Global Sales and Communications Development, finished in second and third place respectively.
PURCHASE, N.Y., May 13, 2021 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced that its companies Atlas Air, Inc. and Polar Air Cargo Worldwide, Inc. have each achieved the Center of Excellence for Independent Validators (CEIV) Corporate Pharma credential from the International Air Transport Association (IATA), confirming their commitment to meeting pharmaceutical manufacturers’ requirements to transport temperature controlled and time-sensitive products, including vaccines.
CEIV Pharma is a quality certification program developed by IATA that has established high standards for safe air transport of pharmaceuticals around the world to ensure product integrity. Operators who achieve the CEIV Pharma credential undergo a rigorous process to confirm their experience, education and adherence to these high standards.
By achieving this certification, Atlas Air and Polar are even better positioned to deliver the best form of safe transportation for their valued pharma and medical customers around the world, offering them the assurance that CEIV Pharma certification provides.
In pursuing this credential, Atlas Air and Polar adopted standard operating procedures to handle temperature-sensitive products. The companies also completed a multistep process to train ground and warehouse personnel, as well as vendors, in these new procedures, which also included an independent audit.
“Even as the COVID-19 pandemic has added unrelenting operational complexities to our business, our employees around the world are dedicated to meeting and exceeding our customers’ needs in transporting sensitive medical and pharmaceutical products,” said Michael T. Steen, Executive Vice President and Chief Commercial Officer of Atlas Air Worldwide. “This CEIV Pharma certification reinforces the flexibility and reliability of our outstanding team, unrivaled portfolio of assets and scale of our global network.”
Lars Winkelbauer, Executive Vice President and Chief Operating Officer of Polar Air Cargo Worldwide, said: “Polar’s CEIV Pharma certification affirms the company’s long-standing track record for successfully transporting temperature-sensitive goods like produce and other perishable commodities.
“I am immensely proud of the Polar team for achieving this industry-leading certification, underscoring our ability to maintain end-to-end temperature-controlled shipments across our network.”
Mr. Winkelbauer added: “With the increase in demand for cold-chain transportation tied to vaccines and the equipment needed for safe distribution, our customers can continue to rely on Polar’s expertise around the world.”
Atlas Air’s and Polar’s CEIV Pharma certification is valid through 2024.
About Atlas Air Worldwide:
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers the broadest array of Boeing 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasairworldwide.com. Follow Atlas Air Worldwide on LinkedIn @AtlasAir, on Twitter @AtlasAirWW, and on Instagram @AtlasAirWorldwide.
About Polar Air Cargo Worldwide:
Making connections is Polar Air Cargo Worldwide’s purpose — connecting cargo with its destination, connecting with customers to provide logistics solutions, and connecting with the company’s teams around the world to drive growth and success. Polar is the trusted choice for unmatched on-time performance for time-definite airport-to-airport scheduled air cargo service, and unparalleled ability for unique specialized transport. With a modern, efficient and flexible all-Boeing fleet, Polar sets the standard and helps customers grow by opening new doors to new markets for their goods. More information is available at www.polaraircargo.com. Follow Polar on LinkedIn @PolarAirCargo, on Twitter @PolarAirCargo and on Instagram @PolarAirCargoWorldwide.
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PURCHASE, N.Y., May 5, 2021 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced first-quarter 2021 net income of $89.9 million, or $3.05 per diluted share, compared with $23.4 million, or $0.90 per diluted share, in the first quarter of 2020.
On an adjusted basis, EBITDA rose to $181.3 million in the first quarter of 2021 compared with $121.2 million in the prior-year period. Adjusted net income grew to $72.2 million, or $2.45 per diluted share, in the first quarter of 2021 compared with $29.9 million, or $1.15 per diluted share, in the prior-year period.
“Our performance was driven by the strength and flexibility of our global business model and our team continuing to capitalize on the current airfreight environment, with demand and yields that are well above typical seasonal levels,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich.
“Our results also benefited from flying four 747 freighters and one 777 freighter that we reintroduced to our fleet throughout 2020 to serve customer demand.
“I would like to thank our team for continuing to deliver safe, high-quality service for our customers in this very challenging operating environment. We flexed our global network and increased aircraft utilization to match airfreight demand. We also positioned ourselves for the future by entering into and extending numerous long-term charter agreements with strategic customers.”
Mr. Dietrich added: “We are off to a very good start in 2021 and are seeing continued business momentum in the second quarter. We are closely monitoring the market and leveraging the diversity of our business model. This includes being prepared to capitalize on global market conditions as well as being able to successfully adjust to any changes.
“With the strong global demand for airfreight outpacing air cargo supply, we anticipate airfreight demand and yields to remain strong, with capacity on long-haul trade lanes remaining tight. International passenger flying on widebody aircraft has been slow to recover, and will likely be last to return as countries continue to struggle with COVID-19 and many borders remain closed. Recent passenger air traffic has largely been driven by pent-up demand for domestic and regional leisure travel with smaller-gauge aircraft, which is less impactful to international airfreight.
“In the second quarter of 2021, we expect to fly approximately 90,000 block hours, with revenue of approximately $950 million, and adjusted EBITDA of about $210 million. In addition, we anticipate adjusted net income to grow approximately 30% compared with adjusted net income of $72.2 million in the first quarter of 2021.*
“Given ongoing economic and market-related uncertainties, including COVID-19, new variants of the virus, surges in cases globally, travel restrictions, low international passenger travel and other factors, we are providing a second-quarter outlook, but not issuing a full-year 2021 earnings outlook at this time.”
Segment Reporting Change
Beginning with our first-quarter 2021 results, we have changed our operating and reportable segments to reflect the evolution of our business. As the ACMI and Charter services have become more similar, we view and manage them as one segment.
We now have two operating and reportable segments: Airline Operations and Dry Leasing. Previously, our operating and reportable segments were ACMI, Charter and Dry Leasing. Our Airline Operations segment provides outsourced aircraft operating services to customers on an ACMI, CMI and Charter basis. No changes have been made to our Dry Leasing segment.
First-Quarter Results
Volumes in the first quarter of 2021 increased to 88,523 block hours compared with 73,247 in the first quarter of 2020, with revenue growing to $861.3 million versus $643.5 million in the prior-year period.
Higher Airline Operations revenue primarily reflected a significant increase in flying and a higher average rate per block hour. Block-hour growth during the period was driven by increased demand for our commercial cargo Charter and CMI services, reflecting higher airfreight volumes and a reduction of available cargo capacity in the market, the disruption of global supply chains due to the pandemic and our ability to increase aircraft utilization. In addition, segment revenue benefited from the operation of four 747-400 freighters we reactivated throughout 2020 and a 777-200 freighter that was previously in our Dry Leasing business. Partially offsetting these improvements was lower AMC passenger Charter flying as the U.S. military has taken precautionary measures to limit the movement of military personnel. The increase in the average rate per block hour was primarily due to an increase in higher-yielding commercial cargo Charter flying, partially offset by lower fuel costs and an increase in CMI flying.
Higher Airline Operations segment contribution in the first quarter of 2021 was primarily driven by the positive factors benefiting segment revenue mentioned above. These improvements were partially offset by: higher pilot costs related to premium pay for pilots operating in certain areas significantly impacted by COVID-19; increased pay rates we provided to our pilots in May 2020; and higher heavy maintenance.
In Dry Leasing, segment revenue and contribution in the first quarter of 2021 was relatively unchanged compared with the prior-year period.
Lower unallocated income and expenses, net, during the quarter primarily reflected CARES Act grant income of $40.9 million, which has been excluded from our adjusted results.
Reported earnings in the first quarter of 2021 also included an effective income tax rate of 23.7%. On an adjusted basis, our results reflected an effective income tax rate of 21.9%.
Cash
At March 31, 2021, our cash, including cash equivalents and restricted cash, totaled $714.0 million compared with $856.3 million at December 31, 2020.
The change in position resulted from cash used for investing and financing activities, partially offset by cash provided by operating activities.
Net cash used for investing activities during the first quarter of 2021 primarily related to capital expenditures and payments for flight equipment and modifications, including pre-delivery payments for 747-8F aircraft, spare engines, GEnx engine overhauls and performance upgrade kits.
Net cash used for financing activities during the period primarily related to payments on debt obligations, partially offset by proceeds from debt issuance.
Labor
We remain committed to reaching a new Joint Collective Bargaining Agreement (JCBA) with our Atlas Air and Southern Air pilots, and have moved closer to completion. Scheduled arbitration hearings concluded on April 1, 2021, and the union has now provided the company with the integrated seniority list, which is a critical item for implementing the new JCBA. The next step is for both parties to submit post-hearing briefs. The arbitrator will then consider all of the information presented and render a binding decision, which we expect in the second half of this year.
Outlook*
We expect to fly approximately 90,000 block hours in the second quarter of 2021, with revenue of approximately $950 million, and adjusted EBITDA of about $210 million. In addition, we expect second-quarter 2021 adjusted net income to grow approximately 30% compared with adjusted net income of $72.2 million in the first quarter of 2021.*
Our outlook anticipates commercial cargo charter yields in the second quarter of 2021 to remain above typical seasonal levels, but below the historically high yields experienced during the second quarter of 2020.
We expect second-quarter results to continue to be impacted by ongoing pandemic-related expenses, including pilot premium pay and operational costs for providing a safe working environment for our employees. We also expect higher pilot costs related to increased pay rates we provided to our pilots in May 2020.
For the full year in 2021, we continue to expect aircraft maintenance expense to be lower than 2020, and depreciation and amortization to total about $270 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are projected to total approximately $110 to $120 million, mainly for parts and components for our fleet.
Given ongoing economic and market-related uncertainties, including COVID-19, new variants of the virus, surges in cases globally, travel restrictions, low international passenger travel and other factors, we are providing a second-quarter outlook, but not issuing a full-year 2021 earnings outlook at this time.
Other than with regard to revenue, we provide guidance only on an adjusted basis because we are unable to predict, with reasonable certainty and without unreasonable effort, the effects of future gains and losses on asset sales, special charges and other unanticipated items that could be material to our reported results.*
Conference Call
As previously announced, management will host a conference call to discuss Atlas Air Worldwide’s first-quarter 2021 financial and operating results at 11:00 a.m. Eastern Time on Wednesday, May 5, 2021.
Interested parties may listen to the call live at Atlas Air Worldwide’s Investor site or at https://edge.media-server.com/mmc/p/4p2gxgty.
For those unable to listen to the live call, a replay will be archived on the Investor site following the call. A replay will also be available through May 12 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 8943268#.
To supplement our financial statements presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include Adjusted EBITDA; Adjusted net income; Adjusted Diluted EPS; Adjusted effective tax rate; and Free Cash Flow, which exclude certain noncash income and expenses, and items impacting year-over-year comparisons of our results. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for Net income (loss); Diluted EPS; Effective tax rate; and Net Cash Provided by Operating Activities, which are the most directly comparable measures of performance prepared in accordance with U.S. GAAP.
Our management uses these non-GAAP financial measures in assessing the performance of the company’s ongoing operations and in planning and forecasting future periods. We believe that these adjusted measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance. For example:
*Other than with regard to revenue, we provide guidance only on an adjusted basis and are unable to provide forward-looking guidance on a U.S. GAAP basis or a reconciliation to the most directly comparable U.S. GAAP measures because we are unable to predict with reasonable certainty and without unreasonable effort, the ultimate outcome of certain significant items, including future gains and losses on asset sales, special charges and other unanticipated items. These items are uncertain, depend on various factors, and could have a material impact on our U.S. GAAP results.
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers the broadest array of Boeing 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasairworldwide.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. Those statements are based on management’s beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words “will,” “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate,” and similar expressions used in this release that do not relate to historical facts are intended to identify forward-looking statements.
Such forward-looking statements speak only as of the date of this release. They are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: our ability to effectively operate the network service contemplated by our agreements with Amazon; our ability to coordinate with Amazon to accept newly converted aircraft; the possibility that Amazon may terminate its agreements with the companies; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives, pilots and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; changes in U.S. and foreign government trade policies; economic conditions; the impact of geographical events or health epidemics such as the COVID-19 pandemic; our compliance with the requirements and restrictions under the Payroll Support Program; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; significant data breach or disruption of our information technology systems; labor costs and relations, work stoppages and service slowdowns; the outcome of pending negotiations and arbitration with our pilots’ union; financing costs; the cost and availability of war risk insurance; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; border restrictions; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2021 or thereafter.
Atlas Air Worldwide assumes no obligation to update such statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law and expressly disclaims any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.
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PURCHASE, N.Y., April 15, 2021 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced that its provider of flight attendant services, Flight Services International (FSI), has reached a five-year agreement with the Transport Workers Union of America (TWU) Local 591, which represents flight attendants who support Atlas Air’s passenger services. This is the first labor contract with FSI flight attendants since they organized with TWU.
FSI provides Atlas Air with over 400 flight attendants to serve its thousands of passenger flights a year. Customers include U.S. military service men and women, sports teams, entertainers and other VIP passengers. Atlas Air has worked with FSI since 2012.
“We are pleased to recognize the great contributions of our flight attendant workforce with this updated wage and benefits package,” said Joni Ffrench, President of Flight Services International.
“FSI flight attendants are true partners with us and provide excellent service to our customers on passenger flights,” said John W. Dietrich, Atlas Air Worldwide President and Chief Executive Officer. “We applaud FSI for their efforts in reaching this desired outcome for their flight attendants.”
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers the broadest array of Boeing 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasairworldwide.com.
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Lilian Dukes
Atlas concluded its month-long Women’s History Month activities with focus on the women of Atlas’s Technical Operations team, whose leadership and innovative ideas inspire us and make us stronger.
The Tech Ops team’s work is critical and continuous, happening behind-the-scenes to ensure Atlas’s 24-7 operation runs efficiently. The team is successful, in large part, because it benefits from the ideas and perspectives of people from varying backgrounds.
Senior Vice President of Technical Operations Lillian Dukes took on the leadership of the department in the summer of 2020, bringing more than 25 years’ experience in Tech Ops and supply management in the aviation industry. Prior to Atlas, she held roles with companies including American Airlines, American Eagle Airlines, Spirit Aerosystems, Beechcraft Corp. and General Electric.
Lillian is a champion of Atlas’s Diversity, Equity and Inclusion philosophy and efforts to bring more women to careers in aviation, especially in Tech Ops.
“I think it all goes back to diversity of thought,” said Lillian. “Women, I think, bring a different thought process to things, just like people of different backgrounds do. This diversity of perspective is needed to change the dynamics of the conversation and decision making.”
Lillian holds a Bachelor of Science in Electrical Engineering and Mathematics from Carnegie Mellon University and a Master of Science in Electrical Engineering from Villanova University. She was inspired by her parents, who modeled tenacity and hard work – qualities she has carried with her.
Lillian advocates for the next generation of women in aviation as a mentor and through her role as a board member of AWESOME (Achieving Women’s Excellence in Supply Chain Operations, Management and Education), the most active and prominent organization focused on advancing women’s supply chain leadership. She also serves as adjunct lecturer in the Haslam College of Business within the Graduate and Executive Education Aerospace and Defense programs at the University of Tennessee.
Althea Arvin
Althea Arvin, Senior Director of Materials Management, shares Lillian’s determination to encourage other women to pursue a place in the industry – and to have a voice when they get there. She hopes to set an example for other women in tech ops, as others have been an example for her.
“My very first boss after I got out of aircraft maintenance school just seemed very comfortable,” Althea said. “I could see myself as a leader because I could see myself in her. I could look up and see a woman there and think, it’s possible for me to be in that chair one day.”
Althea joined Atlas in October 2020, bringing nearly 25 years of experience in aviation maintenance, beginning with a 12-year career in the U.S. Air Force. Althea’s father and uncles were active-duty air force pilots, and she dreamed of following them into the cockpit.
She was a distinguished graduate of ROTC, and had her first choice of career paths, but pilot training was closed to her because of a back injury from a skiing accident. Undeterred, she chose a career in aviation maintenance instead.
In the few months that she has been at Atlas, Althea has been impressed by the women on her team.
“The women I have in my department are very strong and very effective,” she said.
To highlight just a few:
Ana Archie
Ana Archie, Manager of Stores and Material Operations, Miami
“I have worked in the supply logistics industry since 2009, when I enlisted in the military. I did not initially know this field of work existed, but once I was introduced to it, I fell in love with it and have continued to focus on logistics in my professional journey. I found aviation when I worked as a Logistics Liaison for the U.S. Military. I became familiar with the C-5, C-130 and C-17, as well as commercial aircraft. In my current role at Atlas Air as a Material Operations Manager in MIA, I run the Material Stores operation. The MIA Stores department is a critical part of Atlas Air Tech Ops and I am proud to have built a strong and well-run operation here. My most significant achievement has been earning the respect of my colleagues by delivering great results in a male-dominated field.”
Nancy Escobar
Nancy Escobar, Supervisor of Materials Stores, Houston
“I am a first generation Mexican American, born and raised in Northern California. I served in the Army for eight years, and because of the values instilled in me, I was drawn to roles that tended to both more challenging and male-dominated. During my military service, I flew home from a 12-month deployment in Afghanistan on Atlas. Fast-forward five years later; I am a Materials Supervisor for that very same company. I am passionate about my job and dedicated to helping others pursue their passions and dreams like I have as a mother, veteran and logistician.”
Luna Liu
Luna Liu, Regional Manager of Stores, Asia
“I was born and raised in Beijing and I am from an aviation family. My passion for aviation comes from my parents. My parents inspire my perseverance and work ethic. When the opportunity came to join Atlas as a contract store clerk in Shenzhen in 2000, I accepted it. After eight months of working in this role, I went to Singapore to support the heavy checks. Seven years later, I was asked if I was willing to assume the Regional Manager of Asia position, and I accepted it. I embrace the challenges and adventure that comes with this industry as they help me grow as a leader.”
PURCHASE, N.Y., March 10, 2021 – Titan Aircraft Investments, the joint venture between Titan Aviation Holdings and Bain Capital Credit, today announced the acquisition of two 767-300ER aircraft from Icelandair. These aircraft will be converted to freighters and placed on long-term leases to Icelandair. Titan Aviation Holdings, a subsidiary of Atlas Air Worldwide Holdings Inc. (NASDAQ: AAWW), will manage these assets.
Michael T. Steen, President and Chief Executive Officer of Titan Aviation Holdings, said “We are delighted to welcome Icelandair as a strategic customer and to support their long-term expansion plans. The 767-300ER is a very attractive medium-sized freighter and we are excited to manage these two aircraft on behalf of the joint venture. We currently own 21 767-300ER freighters, which provide us with extensive experience in this aircraft type.”
With the addition of these two 767s, Titan Aircraft Investments’ portfolio has grown to three aircraft, which also includes a 777-200 freighter. Titan Aircraft Investments’ aircraft portfolio is managed by Titan Aviation Holdings.
Titan Aviation Holdings has the most diversified and one of the largest freighter portfolios in the world, including 777, 767 and 737 aircraft. Titan Aviation Holdings’ customers include Aerologic, Amazon, China Postal, DHL Express and FedEx, among others.
“We are very pleased to partner with Titan Aircraft Investments and Atlas Air to further strengthen our cargo business. With continued positive outlook for cargo operations post COVID, I am confident that the 767-300ER freighters will allow us to maximize new opportunities in our markets. These aircraft carry around 50% more freight than our current two B757-200 freighters and fit very well into our current fleet and network. Our aim is to increase the capacity in our markets, as well as strengthen Iceland as a hub for cargo, in a similar way as our passenger hub that provides attractive connections between continents,” said Bogi Nils Bogason, President and CEO of Icelandair Group.
“We are uniquely positioned to deliver value to our growing portfolio of customers as we continue to invest in market-leading assets, combined with the unique and diversified services our group of companies offer,” said John W. Dietrich, President and Chief Executive Officer of Atlas Air Worldwide.
About Atlas Air Worldwide:
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers the broadest array of Boeing 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasairworldwide.com.
About Icelandair Group:
Icelandair Group operates international and domestic passenger services, an airfreight and logistics business through Icelandair Cargo, as well as aircraft leasing and consulting services through its subsidiary Loftleidir Icelandic. With Iceland as a connecting hub, Icelandair’s passenger route network centers around the unique location of the country midway between North America and Europe, connecting a number of destinations to and from Iceland as well as across the Atlantic.
Icelandair Group has successfully built up cargo operations in its key markets over the past decades, both on its passenger network and with its own freighters. Icelandair Cargo is the largest air freight operator in Iceland and has been in a leading role in air transport to and from Iceland for the past decade. Developing markets for Icelandic fresh fish in Europe and North America has been a key focus.
For more information, please visit www.icelandair.com.
As the aviation industry focuses on becoming more sustainable, reducing aircraft fuel emissions is a major focus. It is important to remember however, that there are further ways to reduce reliance on fossil fuels across operations.
Polar has started to roll out hybrid and electric cars and vans to replace gas-powered vehicles throughout the network. 30% of vehicles are now powered by alternative fuel sources and the goal is to increase this to 40% by end of 2021. This switch to more sustainable Ground Operations vehicles will help reduce emissions.
Polar’s new, more environmentally-friendly vehicles have a unique custom design that highlights the company’s commitment to greening.
In Hong Kong (HKG), Polar has deployed two Nissan e-NV200 Zero Emissions electric vans. Along with numerous high-tech features, the Nissan Zero Emissions van is 100% electric, and allows drivers to travel 60% further more compared to the previous generation without compromising in load space or capacity, and fitting Polar’s needs well.
The sales team in Korea uses a hybrid Honda Touring vehicle, and in North America, Polar has rolled out Kia Niro and Toyota RAV4 hybrid vehicles. The hybrid vehicles are more efficient, and cleaner compared with diesel SUVs, representing a reduction in toxic pollutants and greenhouse gases. Ground Ops teams currently use the low-emissions cars to move between warehouses, airport facilities and the planes at Polar’s stations in Los Angeles (LAX), Cincinnati (CVG), Chicago (ORD) and New York (JFK).
Sylvie Blondeel, Polar’s Chief Financial Officer and executive sponsor of the company’s greening initiatives, said, “The purchase of these vehicles is a significant step in a greener direction, and they also reduce operation costs related to more costly gas and diesel.”
First Officers Robert and Thomas Melchionda
First Officer Robert Melchionda, a United States Air Force retiree, has been with Atlas for more than two decades and has enjoyed introducing his son Thomas to the world of aviation.
“Thomas was born while I was in the Air Force and he grew up looking at the airplanes circling over our home,” said Robert. “He and his brother Matthew loved to look up and know dad was flying in the sky.”
Robert continued, “In my previous career with the Air Force, I was a C-5 Instructor Pilot and Director of Training at the Dover Air Force Base in Dover, Delaware. When I started with Atlas in 1999, Thomas was three years old. We continued to live near the base, where we loved watching the 747s.”
Thomas (age 6) in 2002 at Dover AFB, with a C-5 in the background.
When Thomas was in middle school, Robert made plans to take him to the Miami Training Center, which was an eye-opening experience for Thomas.
“I was always fascinated with airplanes but being in the simulator was an amazing experience,” said Thomas. “It made me realize how much I wanted to be a pilot. I loved seeing the training center and meeting other pilots. I was like a kid in a candy store.”
“We were so lucky,” recalled Robert. “Atlas Flight Sim Instructor Frank Haigney was too kind to give me the opportunity to share this experience with Thomas.”
Thomas, during his middle school years, in the simulator.
After middle school, Thomas entered PolyTech High School of Kent County in Delaware, which offers specialty training in 22 technical programs of study.
“I applied to PolyTech specifically for the aviation program,” said Thomas. “Once you are accepted into the school, you have to compete for your ‘shop’ or technical area. I applied for and was accepted into Airway Science, which was a program through Air Force Junior Reserve Officer Training Corps (AFJROTC).”
Robert and Thomas in front of the simulator in MIATC.
“During my sophomore year of high school, I had to apply for a flying slot, which was paid for by the high school and enabled you to get your private flying license,” explained Thomas. I had to interview, submit a resume, and have a GPA of 3.5 or higher. I was extremely excited when they confirmed my acceptance. It was the first step towards starting my aviation career.”
“Thomas was the only student to successfully complete the program that year,” said Robert. “He was the AFJROTC Group Commander and won numerous awards for his outstanding work.”
While he was a senior in high school, Thomas had the opportunity to concurrently attend Delaware State University (DSU) to earn his instrument rating. He enrolled in DSU and commuted between the college and high school. Upon graduation from high school, he transitioned to DSU full-time and entered the university’s aviation program.
Thomas during his time at Delaware State University.
In 2017, while Thomas was at DSU, Robert took the opportunity to approach Greg Kappen, Atlas Senior Director Flight Ops in CVG, to inquire about whether Atlas had an internship program his son might qualify for.
“He received a call that he won the internship and we were asked how quickly he could get to Miami,” Robert recalled.
“While I was in Miami, I had the opportunity to work for Ron Barber, Director Flight Ops in Performance Engineering (PE) and Ray Marois, Manager of Performance Engineering at the Training Center,” said Thomas. “I worked hard. I didn’t want to appear naïve, so I studied every night, and I called my dad regularly to ask a multitude of questions relating to my job.”
“It was a great experience to see firsthand how an airline operates,” said Thomas. “I got a behind-the-scenes look that many pilots never get to see.”
“Those life-lines helped him build confidence. He became a real problem solver under Ron and Ray’s tutelage,” said Robert. “Once the internship was over, the PE team offered Thomas a position as a contractor for the Company.”
While working as a contractor, Thomas continued his studies at DSU and earned all his ratings. After graduating from college, he took a full-time job working for DSU as a flight instructor and check airman.
First Officer Thomas Melchionda in the air on a Southern 737.
In February 2020, Thomas heard about and applied to Atlas’ Pilot Pathways program. He was one of the first to apply. Thomas completed the program as well as the 737 program and joined Atlas as a First Officer in November 2020.
“Thomas is only 24 now and has already accomplished so much,” said Robert. “He wanted a career in aviation early on, since the age of 13. I can remember that little boy sitting in N499MC at Dover AFB and I now see the young man sitting in the 737. I could not be prouder of my son and what he has achieved.”
“Growing up, I always knew I wanted to fly cargo and I saw a future with Atlas,” said Thomas. “I was familiar with the operations; it was where I always wanted to go. My dad taught me to be goal-oriented, and I never fell off track. I am so lucky and so blessed to be in my position to have the opportunities that this Company has given me.”
Fourth-Quarter 2020 Results
Full-Year 2020 Results
PURCHASE, N.Y., February 18, 2021 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced strong increases in volumes, revenue and earnings for the fourth quarter and full year of 2020. These results were driven by ongoing demand for our assets and services and our operational execution. The company also provided an outlook for first-quarter 2021 earnings growth.
On a reported basis, net income totaled $184.0 million, or $6.15 per diluted share, for the three months ended December 31, 2020. Results compare with a reported loss of $410.2 million, or $15.86 per diluted share, for the three months ended December 31, 2019, which was primarily due to a noncash special charge of $616.2 million ($485.2 million after tax).
On an adjusted basis, EBITDA rose to $279.7 million in the fourth quarter of 2020 compared with $204.7 million in the prior-year period. Adjusted net income increased to $143.2 million, or $4.83 per diluted share, in the fourth quarter of 2020 compared with $98.2 million, or $3.80 per diluted share, in the prior-year period.
“We finished this unprecedented year on a strong note, with financial and operating results that exceeded our expectations. I’d like to thank everyone at Atlas for stepping up to deliver an extraordinary peak season and full year for our business and our customers,” said President and Chief Executive Officer John Dietrich.
“In the face of unrelenting operational complexities driven by the COVID-19 pandemic, we added widebody capacity, increased aircraft utilization and grew block hours to carry historic volumes, including essential goods that businesses, communities and individuals require as well as holiday e-commerce packages.
“We are leveraging our unrivaled portfolio of assets and the scale of our global network. We are also continuing to diversify our customer base and have entered into numerous long-term charter agreements with strategic customers, such as Cainiao, Flexport and HP Inc. These agreements will provide reliable and attractive revenue streams for the years ahead.
“Providing our customers with modern, fuel-efficient aircraft has been a longstanding priority at Atlas, and we were excited to announce that we ordered four new 747-8Fs from Boeing. This acquisition underscores that commitment and also demonstrates our focus on environmental stewardship through the reduction of aircraft noise, emissions and fuel consumption. The 747-8F provides 20% higher payload capacity and 16% lower fuel consumption than the very capable 747-400F, and has 25% higher capacity than the new-technology 777-200LRF. In addition, the advanced engines on the 747-8F reduce noise by approximately 30% compared to the previous generation of aircraft.
“As the world’s largest 747 freighter operator, the -8F is core to our business, and complements our diverse fleet of 747-400s, 777s, 767s and 737s. We are expecting delivery of these new aircraft from May through October 2022, and they will play a key role in advancing Atlas’ strategic growth plans for decades to come.”
He concluded: “The strong demand for our aircraft and services has continued into this quarter. We expect to fly approximately 85,000 block hours in the first quarter of 2021, with revenue of approximately $820 million, and adjusted EBITDA of about $150 million. In addition, we expect first-quarter 2021 adjusted net income to grow approximately 60% to 65% compared with adjusted net income of $29.9 million in the first quarter of 2020.*
“Due to ongoing uncertainty related to the pandemic and associated market dynamics, including ever-changing border restrictions, new variants of COVID-19 and surges in cases globally, we are not providing a full-year 2021 earnings outlook at this time.”
Fourth-Quarter Results
Volumes in the fourth quarter of 2020 increased to 96,079 block hours compared with 84,488 in the fourth quarter of 2019, with revenue growing to $932.5 million versus $747.0 million in 2019.
ACMI segment revenue during the period primarily reflected lower levels of flying driven by the redeployment of 747-400 aircraft to the Charter segment to support long-term charter programs with customers seeking to secure committed cargo capacity. This was partially offset by an increase in aircraft utilization and higher CMI flying.
ACMI segment contribution included higher pilot costs related to premium pay for pilots operating in certain areas significantly impacted by COVID-19 and increased pay rates we provided to our pilots in May 2020. In addition, ACMI segment contribution reflected higher heavy maintenance expense, including additional engine overhauls performed to take advantage of slot availability and vendor pricing discounts, and the redeployment of 747-400 aircraft to the Charter segment. These items were partially offset by increased aircraft utilization and an increase in CMI flying.
Higher Charter segment revenue during the quarter was primarily due to an increase in flying, partially offset by a slight decrease in the average revenue per block hour due to lower fuel costs.
Charter segment contribution was primarily driven by an increase in commercial cargo yields (excluding fuel) and demand for our services, reflecting a reduction of available cargo capacity in the market, the disruption of global supply chains due to the pandemic and our ability to increase aircraft utilization. In addition, segment contribution benefited from a reduction in aircraft rent and depreciation, the redeployment of 747-400 aircraft from the ACMI segment and the operation of a 777-200 freighter previously in our Dry Leasing business. These improvements were partially offset by: higher heavy maintenance expense, including additional engine overhauls performed to take advantage of slot availability and vendor pricing discounts; fewer charters for sports teams and fans as sports leagues cancelled games; higher pilot costs related to premium pay for pilots operating in certain areas significantly impacted by COVID-19; and increased pay rates we provided to our pilots in May 2020.
In Dry Leasing, lower segment revenue and contribution in the fourth quarter of 2020 primarily related to changes in leases and the disposition of certain nonessential Dry Leased aircraft during the first quarter of 2020.
Lower unallocated income and expenses, net, during the quarter primarily reflected CARES Act grant income of $67.2 million.
Reported results in the fourth quarter of 2020 included an effective income tax rate of 24.1%. On an adjusted basis, our results reflected an effective income tax rate of 23.9%.
Full-Year Results
Volumes in 2020 grew to 344,821 block hours compared with 321,140 in 2019, with revenue increasing to $3.21 billion in 2020 from $2.74 billion in 2019.
For the twelve months ended December 31, 2020, our reported net income totaled $360.3 million, or $13.50 per diluted share, which included a $71.1 million unrealized loss on financial instruments. Reported results for the twelve months ended December 31, 2019, reflected a net loss of $293.1 million, or $11.35 per diluted share, which included a noncash special charge of $638.4 million ($503.1 million after tax), partially offset by an unrealized gain on financial instruments of $75.1 million.
On an adjusted basis, EBITDA grew to $844.2 million in 2020 compared with $504.8 million in 2019. For the twelve months ended December 31, 2020, adjusted net income increased to $379.0 million, or $13.67 per diluted share, compared with $139.6 million, or $5.24 per diluted share, in 2019.
Reported results in 2020 included an effective income tax rate of 27.5%. On an adjusted basis, our results reflected an effective income tax rate of 22.9%.
Cash
At December 31, 2020, our cash and cash equivalents, short-term investments and restricted cash totaled $856.3 million, compared with $114.3 million at December 31, 2019.
Our improved cash balance primarily reflected cash provided by operating activities, and also included the funds we received through the Payroll Support Program available to air cargo carriers under the CARES Act, partially offset by cash used for investing and financing activities.
Net cash used for investing activities during 2020 primarily related to capital expenditures and payments for flight equipment and modifications, including spare engines and GEnx engine performance upgrade kits, partially offset by proceeds from the disposal of nonessential aircraft. Net cash used for financing activities during the year primarily related to payments on debt obligations, including our revolving credit facility, partially offset by debt issuances.
Amazon Warrants
On October 9, 2020, Amazon elected a cashless exercise with respect to 3,607,477 shares vested under a Warrant issued in 2016. As a result, Amazon acquired 1,375,421 shares of AAWW common stock.
On January 27, 2021, Amazon elected a cashless exercise with respect to 4,150,529 shares vested under Warrants issued in 2016. As a result, Amazon acquired 1,280,450 shares of AAWW common stock.
Labor
Our work continues to complete a new joint collective bargaining agreement with our pilots in connection with the merger between Atlas Air and Southern Air. Formal negotiations with the pilots’ union have recently concluded, and we are moving on to binding interest arbitration on the remaining open issues. This arbitration is scheduled to begin in mid-March 2021.
Outlook*
We expect to fly approximately 85,000 block hours in the first quarter of 2021, with revenue of approximately $820 million, and adjusted EBITDA of about $150 million. In addition, we expect first-quarter 2021 adjusted net income to grow approximately 60% to 65% compared with adjusted net income of $29.9 million in the first quarter of 2020.*
We anticipate first-quarter results to continue to be impacted by ongoing pandemic-related expenses, including pilot premium pay and operational costs for providing a safe working environment for our employees. We also expect higher pilot costs related to increased pay rates we provided to our pilots in May 2020 and higher scheduled heavy maintenance expense.
For the full year in 2021, we expect aircraft maintenance expense to be lower than 2020, and depreciation and amortization to total about $270 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are projected to total approximately $110 to $120 million, mainly for parts and components for our fleet.
Committed expenditures to acquire aircraft and spare engines are expected to be $264.7 million in 2021. These expenditures include 747-400 passenger aircraft (to be used for replacement of older passenger aircraft as well as engines and spare parts), spare engines, and our January 2021 agreement to purchase four 747-8F aircraft from Boeing that are expected to be delivered from May 2022 through October 2022.
Due to ongoing uncertainty related to the pandemic and associated market dynamics, including ever-changing border restrictions, new variants of COVID-19 and surges in cases globally, we are not providing a full-year 2021 earnings outlook at this time. We will provide updates as the year progresses.
We provide guidance on an adjusted basis because we are unable to predict, with reasonable certainty, the effects of future gains and losses on asset sales, special charges and other unanticipated items that could be material to our reported results.*
Conference Call
Management will host a conference call to discuss Atlas Air Worldwide’s fourth-quarter and full-year 2020 financial and operating results at 11:00 a.m. Eastern Time on Thursday, February 18, 2021.
Interested parties may listen to the call live at Atlas Air Worldwide’s Investor site or at https://edge.media-server.com/mmc/p/kdnn77fd.
For those unable to listen to the live call, a replay will be archived on the Investor site following the call. A replay will also be available through February 25 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 2969689#.
To supplement our financial statements presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include Adjusted EBITDA; Adjusted net income; Adjusted Diluted EPS; Adjusted effective tax expense (benefit) rate; and Free Cash Flow, which exclude certain noncash income and expenses, and items impacting year-over-year comparisons of our results. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for Net income (loss); Diluted EPS; Effective tax rate; and Net Cash Provided by Operating Activities, which are the most directly comparable measures of performance prepared in accordance with U.S. GAAP.
Our management uses these non-GAAP financial measures in assessing the performance of the company’s ongoing operations and in planning and forecasting future periods. We believe that these adjusted measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance. For example:
*We provide guidance on an adjusted basis and are unable to provide forward-looking guidance on a U.S. GAAP basis or a reconciliation to the most directly comparable U.S. GAAP measures because we are unable to predict with reasonable certainty the ultimate outcome of certain significant items, including future gains and losses on asset sales, special charges and other unanticipated items. These items are uncertain, depend on various factors, and could have a material impact on our U.S. GAAP results.
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers the broadest array of Boeing 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasairworldwide.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. Those statements are based on management’s beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words “will,” “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate,” and similar expressions used in this release that do not relate to historical facts are intended to identify forward-looking statements.
Such forward-looking statements speak only as of the date of this release. They are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: our ability to effectively operate the network service contemplated by our agreements with Amazon; our ability to coordinate with Amazon to accept newly converted aircraft; the possibility that Amazon may terminate its agreements with the companies; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives, pilots and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; changes in U.S. and foreign government trade policies; economic conditions; the impact of geographical events or health epidemics such as the COVID-19 pandemic; our compliance with the requirements and restrictions under the Payroll Support Program; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; significant data breach or disruption of our information technology systems; labor costs and relations, work stoppages and service slowdowns; the outcome of pending negotiations and arbitration with our pilots’ union; financing costs; the cost and availability of war risk insurance; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2021 or thereafter.
Atlas Air Worldwide assumes no obligation to update such statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law and expressly disclaims any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.
* * *
On December 21, 2020 an Atlas Air Boeing 747-400F flew a transatlantic mission using sustainable aviation fuel (SAF). The flight, which Atlas ran as a test to examine ways to become a more environmentally friendly carrier, flew from Spain’s Zaragoza Airport (ZAZ) to Mexico City International Airport (MEX).
“Innovative sustainable aviation fuel test projects demonstrate our ability to partner with our customers and suppliers to help create a more sustainable future for the air cargo industry and global commerce,” said John Dietrich. “Through ongoing meaningful partnerships, we will drive wider acceptance and availability of SAF, which will lower costs and have a positive impact on our industry and the environment.”
Click here to learn more about the flight and here to see the coverage from Simple Flying.
PURCHASE, N.Y., January 12, 2021 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) announced today it has ordered four new Boeing 747-8 freighters in a transaction that furthers the company’s strategic growth plan. The aircraft will enable the company to meet strong customer demand in the airfreight market, particularly the fast-growing e-commerce and express sectors.
The company’s business model provides the flexibility to operate these new aircraft for customers or take advantage of dry-leasing opportunities through its Titan Aviation Leasing subsidiary.
The Boeing 747-8 freighter is the most capable, technologically advanced and environmentally conscious widebody freighter. The 747-8F provides 20% higher payload capacity and 16% lower fuel consumption than the very capable 747-400F, and has 25% higher capacity than the new-technology 777-200LRF. It is also the only factory-built freighter with nose-loading capability in production, which will serve the long-term needs of the airfreight market. Atlas is the world’s largest operator of Boeing 747 freighter aircraft, with a total of 53 in its current fleet, including 10 747-8Fs, 34 747-400Fs, five passenger 747-400s, and four Large Cargo Freighters (LCFs).
Atlas’ investment in these new aircraft underscores its ongoing commitment to environmental stewardship through the reduction of noise, aircraft emissions and resource consumption. The 747-8F meets or exceeds the strictest International Civil Aviation Organization (ICAO) emissions standards and meets global noise regulations with unlimited deployment. The advanced engines on the 747-8F reduce noise by approximately 30% compared to the previous generation of aircraft.
“The 747-8F is the best and most versatile widebody freighter in the market, and we are excited to bolster our fleet with the acquisition of these four aircraft,” said John W. Dietrich, Atlas Air Worldwide President and Chief Executive Officer.
Mr. Dietrich continued: “This significant growth opportunity will enable us to capitalize on strong demand and deliver value for our existing and prospective customers. The efficiency and capability of the 747-8F further complements our longstanding focus on leading-edge technology. Dedicated freighters – like those operated by our Atlas, Polar and Southern subsidiaries – will continue to be in demand as the global airfreight market, particularly the e-commerce and express sectors, continues to grow. We look forward to continuing to provide world-class service to our customers.”
“The 747 will forever hold a special place in aviation history and we are honored by Atlas Air’s longstanding commitment to the airplane. Atlas Air began operations 28 years ago with a single 747 and it is fitting that they should receive the last 747 production airplanes, ensuring that the ‘Queen of the Skies’ plays a significant role in the global air cargo market for decades to come,” said Stan Deal, president and chief executive officer of Boeing Commercial Airplanes. “With the global air cargo fleet expected to grow by more than 60% over the next 20 years, we look forward to delivering these airplanes and supporting Atlas Air’s Boeing fleet well into the future.”
“With our highly-trained pilots, outstanding ground staff, and our ongoing investments in innovation and our fleet, we continue to position Atlas as a critical player in the global supply chain and a trusted partner to our customers,” Mr. Dietrich said.
The new 747-8F order will also provide the company with enhanced flexibility to balance future capacity needs with customer demand, as a number of its legacy 747-400F aircraft leases will be up for renewal over the next several years.
The 747-8Fs are expected to be delivered from May through October 2022. These aircraft are the last four 747-8Fs that Boeing plans to produce.
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers the broadest array of Boeing 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasairworldwide.com.
Boeing is the world’s largest aerospace company and leading provider of commercial airplanes, defense, space and security systems, and global services. As a top U.S. exporter, the company supports commercial and government customers in more than 150 countries, leveraging the talents of a global supplier base. Building on a legacy of aerospace leadership, Boeing continues to lead in technology and innovation, deliver for its customers and invest in its people and future growth.
Atlas Air Worldwide is proud to be a part of the global effort to end the pandemic.
We have been actively engaged with our customers and pharmaceutical manufacturers to prepare our operations for the COVID-19 vaccine distribution worldwide. We have begun to transport vaccines and the supplies needed to administer them.
We have secured temperature-controlled containers, our handling facilities are properly equipped, and all processes conform to transportation standards.
We are well prepared with our large freighter fleet and global presence in more than 100 countries and 400 destinations. Our dedicated teams around the world are focused on supporting these efforts safely, reliably and efficiently. We thank our employees for their ongoing commitment.
Atlas’ commitment to corporate responsibility is getting attention. John Dietrich, President & CEO, has been named to “The Responsible 100,” an annual list representing New York’s 100 most outstanding corporate citizens.
“The Responsible 100” list is compiled annually by New York City & State, a news media organization, to honor “an elite group of New York’s most powerful executives, thought leaders, visionaries and influencers, who are setting new standards of excellence, dedication and leadership in improving their communities and making transformative change,” according to event organizers.
The award reflects the commitment of Atlas under John’s leadership to operate as a good corporate citizen, from an internal focus on ethics, sustainability and diversity to an external strategy on philanthropy to community engagement.
“There is no question that this year has provided unprecedented challenges and changes for New Yorkers,” said Ralph Ortega, Interim Editor and Chief of City & State. “We have seen chaos, strife, tragedy and turmoil… a global pandemic, racial reckoning, political upheaval and social unrest. Amid the trials and tribulations, in many ways we’ve also seen the triumph of the human spirit — generosity, compassion and small acts of kindness that help others get through the day. The individuals we are recognizing today are some of those extraordinary people doing their part to make the world a little bit better, which is something we need now more than ever.”
“Social responsibility means being committed to our people, the communities in which we operate, and the world,” said John. “It also means being a catalyst for economic and social progress. Corporate citizenship is firmly rooted in our Atlas core values.”
Atlas’ role in supporting PPE transport this year, and specifically the company’s donation to frontline workers at NYU Langone, contributed to John’s selection for this honor.
“The role we are playing amidst the pandemic is a testament to our commitment as a company to be a force for good,” said John. “Since COVID-19 began, we have worked to safely and efficiently deliver the goods that the world depends upon—medical equipment, pharmaceuticals, PPE and everyday supplies.”
John was highlighted together with other recipients at a virtual event on December 16, hosted by the Reverend Al Sharpton. The celebration included special presentations by noted figures from the New York’s business, nonprofit and academic communities working at the forefront of the Corporate Social Responsibility movement.
I am very proud of how our team has responded to the COVID-19 pandemic. China has produced a significant amount of PPE for shipment around the world. Thanks to our strong and experienced team, we have been able to handle all of these extra shipments and get these critical supplies to where they are most needed.
NGO handles parts for the 787. More than 30% of all B787 aircrafts are built from parts that are made in Japan. The main wings, fuselage and the wingbox are all manufactured in the vicinity of NGO. We then ship the parts to Everett, Washington and Charleston, South Carolina using our Boeing Dreamlifter (LCF) aircrafts.
Golden Week and Christmas affect our business the most. Golden Week is a collection of national holidays that fall within seven days, which include:
Our staff works in shifts, so they have days off, which are equally distributed throughout these holidays. We all work hard to keep the airplanes moving safely for our customers. Regardless of the country in which they are based, our staff always thinks outside the box to overcome any challenges.
Pre COVID, left to right, Junya Tamura (NGO MX Manager), Shige, Satoshi Umemura (NGO Line Maintenance), Pete Dylan (Contract MX), Takeshi Oya (UGSE MX), Takayuki Tomita (UGSE Supervisor)
Our team includes 16 Ground Operations staff members across 11 stations: Shanghai Pudong International Airport (PVG), Hangzhou International Airport (HGH), Wuhan Tianhe International Airport (WUH), Changsha Huanghua International Airport (CSX), Chubu Centrair International Airport (NGO), Narita International Airport (NRT), Sunan Shuofang International Airport (WUX), Nanchang Changbei International Airport (KHN), Zhengzhou Xinzheng International Airport (CGO) and Chongqing Jiangbei International Airport (CKG). We also have other airports we don’t have a station, so our staff would travel to cover the flights and also receive support from local vendor companies throughout the region, which helps us ensure that everything runs seamlessly for our customers.
Pre COVID, Shige (center) with NGO team.
Atlas has been flying in NGO since 2010 and Polar since 2013
When I was younger and lived in Los Angeles, my father took me to airshows. While the airshows themselves did not motivate me at that particular time, the experience of seeing them remained with me. When I graduated from high school and was getting ready to decide on which direction to move towards in my life, working with airplanes felt natural to me. I enrolled in a technical college where I majored in airport business. I loved the movie Top Gun, which also inspired me to get into aviation!
At Atlas, there are opportunities to broaden horizons, expand skillsets, and learn new skills outside of your current job and responsibilities. Opening up new stations is always challenging and interesting. The most memorable time for me was when we opened up NGO. At the time, NGO was only a charter station. My first task was to open an office to handle the LCF flights. The office was small; it did not even have windows. It was a tough undertaking but it was an incredible experience. I learned so much! Today, NGO has grown to handle the LCF and Polar 767 and 747s and now our office has many large windows with plenty of sunshine.
My native language is Japanese and the word I would use to describe my experience at Atlas would be “挑戦” which roughly translates to “challenge” in English.
