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Atlas Air Hiring

Old 07-28-2016, 01:35 PM
  #14471  
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Terrible article. 180 days out to cancel our contract? What stability for our careers... Is it true they canceled a new hire class? Or is that old info? I haven't been following. I did hear that a whopping 2 people was all that remained of a 767 class by the end. Attrition will be way ahead of hiring for the summer.
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Old 07-28-2016, 05:02 PM
  #14472  
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Late August 747 class "postponed"... and yes, per our Union conference call today, the 767 class that started out being planned at 10, ended up with 2. Ouch. Nothing to see here folks....whistling away...
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Old 07-29-2016, 03:30 PM
  #14473  
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Originally Posted by CandlerKid View Post
Terrible article. 180 days out to cancel our contract? What stability for our careers... .
This is not a new feature of the Atlas business model. There have been many examples over the years of "long term" ACMI contracts ending on short notice. And of course much of the flying is now CMI, which is even more fragile.

There are a range of things that could stop Atlas's growth, and even make it really small really fast. From a bad accident to unhappy customers, with several possibilities in-between.

Atlas just flies airplanes for other people -- that is all. There is no underlying business like FDX or UPS, or public /market identity like Delta or American. It surprises me that there are people, and apparently a lot of them, working at 5Y who don't see this.
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Old 07-30-2016, 03:58 AM
  #14474  
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The difference is the other contracts have penalties for terminating a contract ($$). This is for 20 planes, not 1 for a charter company that backs out. It would effect a large portion of the pilot group. I can't think of one recent customer who has canceled before the contract was over, as you reference? We stopped flying for them at the end of the contract most likely.
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Old 07-30-2016, 04:36 AM
  #14475  
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Originally Posted by 742Dash View Post
This is not a new feature of the Atlas business model. There have been many examples over the years of "long term" ACMI contracts ending on short notice. And of course much of the flying is now CMI, which is even more fragile.

There are a range of things that could stop Atlas's growth, and even make it really small really fast. From a bad accident to unhappy customers, with several possibilities in-between.

Atlas just flies airplanes for other people -- that is all. There is no underlying business like FDX or UPS, or public /market identity like Delta or American. It surprises me that there are people, and apparently a lot of them, working at 5Y who don't see this.
After 9/11 I was furloughed from my regional and many friends from their "major" within weeks...

Not one company on the planet is immune to downsizing..

We have 20 planes for Amazon- no one really knows how short or long this will last.
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Old 07-30-2016, 05:19 AM
  #14476  
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Originally Posted by CandlerKid View Post
I can't think of one recent customer who has canceled before the contract was over, as you reference? We stopped flying for them at the end of the contract most likely.
The #2 airplane with Panalpina was terminated early. The entire BA/GSS contract was terminated early. Both of those were in the press. Flying for a certain ACMI customer that does a nice job painting their airplanes is a lot less than it used to be.

And airplanes under CMI are potentially even more "dynamic". The marbles do belong to someone else, after all.

It is just the nature of the business model.

FordHarrison's standard playbook could do a lot of damage to this company.
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Old 07-30-2016, 05:20 AM
  #14477  
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742dash is correct in that the nature of ACMI/CMI flying can be volatile. In the past we have been told many times that the company is not interested in signing short term deals just to put planes in the sky. We walked away from Emirates for that reason allegedly. This deal, though not short term in totality is potentially very short term for the crews who will be hired to fill it. The escape clause will be used to threaten us should we seek self help, meanwhile the top execs will have trousered millions from the deal on top of the millions they got for the Southern deal. They are all in a position to retire after their mega bonus scheme and we can whistle Dixie!

Bottom line....if you are hired here while we gear up for Amazon, when Bezos tires of us you will be on the street even if you went to the 747.
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Old 07-30-2016, 09:47 AM
  #14478  
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Originally Posted by Atrasaty View Post
742dash is correct in that the nature of ACMI/CMI flying can be volatile. In the past we have been told many times that the company is not interested in signing short term deals just to put planes in the sky. We walked away from Emirates for that reason allegedly. This deal, though not short term in totality is potentially very short term for the crews who will be hired to fill it. The escape clause will be used to threaten us should we seek self help, meanwhile the top execs will have trousered millions from the deal on top of the millions they got for the Southern deal. They are all in a position to retire after their mega bonus scheme and we can whistle Dixie!

Bottom line....if you are hired here while we gear up for Amazon, when Bezos tires of us you will be on the street even if you went to the 747.
That just makes your self help more threatening to management... Given such clauses you could kill the company in a short period of time. You have to be willing to do that if that's what is required for a fair contract. The good news is each of you can leave the company on a Friday and have a flying Job the following week in this market. As the face off continues pay off debt and build the emergency fund so you can survive if the management miscalculates and the company goes belly up because they want to cheap out on paying you.
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Old 07-30-2016, 03:28 PM
  #14479  
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Originally Posted by Atrasaty View Post
Atlas Air shareholders could lose out in one-sided aircraft deal with Amazon, while Atlas executives stand to gain millions - The Loadstar

Come here ar your own peril. Looks to me like the top execs are cashing in their chips before the house of cards comes down and will head off into the sunset with bags of cash. GREED GREED GREED.


By Alex Lennane 28/07/2016
It has been revealed that Amazon has the right to cancel the aircraft CMI deal agreed with Atlas Air at just 180 days’ notice, in terms that will surely be questioned by investors at next week’s earnings call.

And on September 20, Atlas shareholders will be forced to decide between paying their company executives multi-million dollar bonuses, or face a potential $9.5m cancellation fee to Amazon, when they are asked to approve the Amazon share issuance.

Details of Atlas Air’s deal with Amazon emerged in a filing submitted to the SEC late on Friday, traditionally a good time to bury news. It shows that Atlas has agreed a far riskier deal than had previously been outlined.

Under the terms of the agreement, Amazon appears to be holding all the cards. Amazon has the right to dry-lease 20 B767Fs from Atlas subsidiary Titan and receive aircraft operation (CMI) services from Atlas, but the internet giant may cancel the CMI deal with just 180 days’ notice merely for the sake of “convenience”.

The short cancellation notice gives Amazon significant leverage over Atlas throughout the term of a deal which is expected to require investment by Atlas Air of more than $500m for aircraft alone – an estimated cost of about $25m per aircraft.

In an earlier filing, Atlas suggested its estimated payment for flight equipment purchases in 2016 would range between $140m and $160m. The first 767F is expected to come into service for Amazon in the third quarter of this year.

If it cancels the CMI portion, Amazon must pay an unspecified fee and continue to dry-lease any aircraft it has already leased.

Another key term is that Amazon can exercise its warrants to acquire shares of Atlas Air without having to invest any cash, by forfeiting a portion of the warrants based on an increase in the value of the stock. So shareholders stand to suffer dilution by Amazon without receiving any cash.

And the terms of the deal also work out well for Atlas’s management.

Shareholders will be asked in September to agree the issuance of common stock, whereby Amazon can take a 30% shareholding in Atlas Air Worldwide Holdings (AAWW). But doing so would trigger a “change in control” of the company.

It would give Atlas’s executive officers the right, under their contracts, to immediately take all their long-term incentive awards at the maximum amount. According to the filing, for the five most senior executives, the pay-out could be between $5m and $10m each.

It was part of a long-term incentive plan designed to help retain management. But if shareholders approve the Amazon deal, there would be less incentive for those officers to remain at a time when they are most needed, as Atlas will be under severe pressure to source, finance and finally operate a large new fleet – an enormous undertaking.

However, if Atlas’s shareholders vote against the proposals, Amazon has the right to cancel the agreements and receive a “break-up fee” of $9.5m.

This may seem a cheaper option than the executive bonuses, but given Amazon’s apparent appetite for aircraft, it seems unlikely that it would cancel. In that event, Atlas must ask shareholders again to approve the restricted share issuance at the following meeting.

Even it it cancels the CMI portion, Amazon would still have the right to force Atlas to source, finance and dry-lease the aircraft on the agreed delivery schedule and at the agreed lease rates – but without the benefit of the CMI revenues.

According to a May filing, Atlas Air executives have already received a special bonus this year for completing a transaction with Southern, although the amount is currently not public.


But shareholders do appear to have a way out. The initial warrants were granted to Amazon on May 4 this year, and the “change of control” pay-out is only triggered if the right to acquire 30% of the shares happens within 12 months.

So shareholders could avoid the executive pay-out if they decide to vote in favour of the deal at a shareholder meeting after May 4, 2017.

ATSG announced a similar transaction with Amazon this year, but agreed to give Amazon just a 19.9% equity share. If Atlas Air management had decided Amazon could take a 29.9% stake, the executive payout clause would not have been triggered.

The agreement with Amazon is for the operation of 20 B767-300 converted freighters on a CMI basis and dry-leasing. The leases will have a term of 10 years, while the CMI operations will be for seven years (with an extension option by Amazon to 10 years).

Operations are expected to begin in Q3 this year and ramp up to full service through 2018.

This is indeed a terrible article and is not divulging the full scope of the agreement. I agree that the detail of this article does demonstrate that Atlas is at risk but there are many factors involved and this article is only this ONE persons take of the 10Q that was just filed. I suggest that if you want to get the full scope to go look at the 10Q yourself. Here are some Q and A's from the 10Q:

Q: What are the consequences if the required shareholder approval for Proposal 1 (Restricted Share Issuance) is not obtained?


A: If Proposal 1 (Restricted Share Issuance) is not approved by our shareholders at the Special Meeting, the Company will not be permitted to issue to Amazon, and Amazon will not be permitted to exercise warrants for, shares of our common stock in excess of 4,937,392 shares.

In such case, Amazon will have the right to terminate the investment agreement with the Company pursuant to which the warrants were issued and receive a break-up fee from the Company in the amount of $9.5 million. In addition, Amazon will retain all warrants that have vested prior to the time of termination of the investment agreement, and will retain its rights and obligations under the stockholders agreement between the Company and Amazon, pursuant to which, among other things, the Company granted Amazon certain Board representation rights and Amazon agreed to certain standstill, voting and transfer restrictions in favor of the Company, with respect to these retained warrants and the shares of common stock it holds or that would be issuable upon conversion of the vested warrants. As of the date of this Proxy Statement, Amazon has vested warrants to acquire 3,750,000 shares of our common stock. If the investment agreement is terminated, Amazon would forfeit the unvested portion of the warrants.

In addition, in the event that the required shareholder approval for Proposal 1 (Restricted Share Issuance) is not obtained at the Special Meeting, Amazon would have the right to terminate its air transportation services agreement with the Company. If Amazon has commenced the dry lease of any of the 20 B767-300 converted freighters, Amazon would be required to continue the dry leases for these aircraft. Amazon would also have the right to terminate the CMI service arrangements for these aircraft, as well as the right to cancel any future commitments to enter into dry leases and CMI service arrangements with the Company. Amazon would also have the right, in its sole discretion, to elect to enter into dry leases for any of the committed 20 B767-300 converted freighters then remaining in accordance with the pricing and delivery schedule contemplated by the air transportation services agreement by providing written notice of such election to the Company within 60 days of termination.

In the event that the required shareholder approval for Proposal 1 (Restricted Share Issuance) is not obtained at the Special Meeting, Amazon may exercise its right to terminate the investment agreement and the air transportation services agreement within 90 days following the date on which the shareholder vote on Proposal 1 (Restricted Share Issuance) is taken. If Amazon does not exercise its termination right within this period, the Company would be required to seek shareholder approval of the Restricted Share Issuance at subsequent shareholder meetings (and Amazon would have equivalent termination rights if the required shareholder approval is not obtained at such subsequent meetings).

Under the terms of the air transportation services agreement, until the shareholder approval for the Restricted Share Issuance is obtained, Amazon will not be required to pay the Company any monthly incentive bonuses under the air transportation services agreement.

Please see the section of this Proxy Statement entitled “Background to Proposal 1: Restricted Share Issuance—Consequences if Shareholder Approval is not Obtained” beginning on page 12.

Q: What are the consequences if the required shareholder approval for Proposal 2 (Charter Amendment) is not obtained?


A: If Proposal 2 is not approved by our shareholders at the Special Meeting, there will be no increase in the authorized number of our common shares and our authorized shares of common stock will remain 50,000,000. As described in greater detail in the section of this Proxy Statement entitled “Background to Proposal 2: Charter Amendment” beginning on page 26, failure to increase our authorized common stock may constrain the Company’s ability to issue shares of common stock in the future for capital raising purposes, in connection with acquisition transactions or under compensatory equity plans otherwise in the ordinary course of business.


Q: Is the outcome of Proposal 1 (Restricted Share Issuance) contingent on the outcome of Proposal 2 (Charter Amendment) and vice versa?


A: The outcomes of Proposal 1 (Restricted Share Issuance) and Proposal 2 (Charter Amendment) are not contingent upon each other.

Approval of Proposal 1 (Restricted Share Issuance) is not dependent upon approval of Proposal 2 (Charter Amendment). If our shareholders approve Proposal 1 (Restricted Share Issuance) but do not approve Proposal 2 (Charter Amendment), the Company will be permitted to issue to Amazon shares of our common stock in excess of 4,937,392 shares, but the Charter Amendment will not become effective and our authorized shares of common stock will remain 50,000,000.

Approval of Proposal 2 (Charter Amendment) is not dependent upon approval of Proposal 1 (Restricted Share Issuance). If our shareholders approve Proposal 2 (Charter Amendment) but do not approve Proposal 1 (Restricted Share Issuance), the Charter Amendment will become effective and our authorized stock will be increased from 50,000,000 shares to 100,000,000 shares, but the Company will not be permitted to issue to Amazon shares of our common stock in excess of 4,937,392 shares and all the other consequences of the failure to obtain shareholder approval for Proposal 1 (Restricted Share Issuance) described in this Proxy Statement will be triggered.


Q: In what other circumstances can Amazon terminate the air transportation services agreement with the Company?


A: As discussed above, if the required shareholder approval for Proposal 1 (Restricted Share Issuance) is not obtained at the Special Meeting, Amazon has the right to terminate the air transportation services agreement with the Company, as described in further detail in the section of this Proxy Statement entitled “Background to Proposal 1: Restricted Share Issuance—Consequences if Shareholder Approval is not Obtained” beginning on page 12.

In addition, Amazon has the right to terminate the air transportation services agreement upon the occurrence of certain events of default, if the Company undergoes a change of control transaction, as well as for convenience (with an effective date of termination no earlier than January 1, 2018) by providing the Company at least 180 days notice of termination and paying the Company a specified termination fee. If Amazon has commenced the dry lease of any of the 20 B767-300 converted freighters, Amazon would be required to continue the dry leases for these aircraft. Amazon’s termination rights are described in greater detail in the section of this Proxy Statement entitled “Background to Proposal 1: Restricted Share Issuance—Amazon’s Rights to Terminate the ATSA” beginning on page 11.
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Old 07-30-2016, 05:10 PM
  #14480  
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Are you guys filling classes? I know several folks that wanted in at Atlas but have changed their minds lately.
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