blogwth

ATSG seems to have a number of 767 aircraft that are not currently producing revenue. This number is likely to increase after the seasonal bump ends. ATSG has lost , or will lose flying from Japan (JAL) and Europe, South/Central America (LAN, Amerijet), Hawaii (UPS seasonal?), the Middle East (DHL reducing from 4 to 3). I'm probably missing some others. Some of this could be offset by rumors that ABX will pick up routes currently covered by three Capital 727s. Even prior to these losses, they had excess 767s. ATSG is also expecting to get two more 767-200s return from lease to Brazilian company RIO.

In response, ATI, Capital and ABX ALL have pending furloughs totaling well over 100 crew members. When combined with the furloughs earlier this year at ATI, the total is probably around 200 crew members that have been or will be laid off this year.

There seems to be soft demand for the aircraft at this time. The corporation is responding by reducing staff. I wonder that they plan to do about the excess aircraft.

Many of their aircraft are owned by their leasing company, Cargo Aircraft Management (CAM). CAM leases aircraft to internal customers, ABX, ATI, and Capital and external customers including RIO and a Canadian customer.

I think it is interesting that the CAM website advertises aircraft for sale or lease including:
767-300ER 364CM
767-200SF 712AX passenger aircraft
757-200PCF None
B757-200 Combi None
727-200F Retiring fleet , N708AA
DC-8F Retiring fleet, N602AL, N605AL, N820BX, N825BX, N830BX, N603AL, N606AL, N822BX, N828BX, N604BX, N721CX, N823BX, N829BX

I think it is also interesting that the CAM website does not indicate any 767-200s, other than 712AX, for sale or lease. Also, CAM is advertising 364CM the next 767-300 to come out of conversion, for lease.

I know ATSG would rather use CAM aircraft for ACMI (lease to an internal customer) than dry lease (external customer) because they get more profit from an ACMI. However, if they don't have enough demand for their ACMI services, I think they would rather do a dry lease or sell than leave the aircraft sitting with no revenue.

Of course, I'm looking at a snapshot. I don't see what they see. I have to make projections based on clues. A mass furlough indicates the employer expects the overstaffed condition will last beyond a break even point where savings exceed costs. I don't know what that point is but going through with a furlough indicates the corporation expects the overstaffed condition will not be short term.

Dry leases tend to last longer than many ACMI agreements. I think dry leases are at least 5 years while ACMI could be as short as a month. The decision makers at ATSG have to make projections about future demand. If they project the inability to find ACMI work for one or more aircraft for a sufficient period of time, it seems logical that they would try to either dry lease or sell that aircraft. The fact that they don't seem to be trying to sell or dry lease 767-200s seems to indicate they expect to acquire ACMI opportunities instead.

For people who are trying to piece together information to get some idea about what the future holds, there seems to be conflicting data. The massive furloughs indicates a longer term situation but the apparent focus on ACMI indicates a shorter term situation.

I'm just tossing this out here to, hopefully, get some discussion going.