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Atlas posts $400M loss, parks four converted 747Fs

• Jeff Lee, Associate Editor
• February 20, 2020

Atlas posts $400M loss, parks four converted 747Fs

• Jeff Lee, Associate Editor
• February 20, 2020
• Aircraft, Capacity & Demand, Carriers, Equipment, News, Production Freighters, Strategy, Widebody Conversions

Atlas Air has parked four freighter-converted 747Fs due to weak demand but doesn’t plan to park production freighters. (Photo: Atlas Air)

Atlas Air Worldwide Holdings today reported a net loss of $410.2 million for the fourth quarter of 2019, partly resulting from a non-cash special charge of $485.2 million related to the write-down of the company’s whole 747-400F fleet due to lower cargo yields and aircraft utilization.
Atlas posted the loss despite block hours in the fourth quarter of 2019 increasing by 1.3% year over year. The company said charter and ACMI revenue during the quarter was lower because of decreased 747-400F flying due to tariffs and trade tensions, but this was offset by growth in 737, 747 and 777 CMI cargo flying and an increase in volumes in the company’s charter segment.

For 2019 overall, block hours grew by 8.4% compared with 2018, and operating revenue increased by 2.2%, but Atlas ended the year with a net loss of $293.1 million.

During Atlas Air Worldwide’s 4Q2019 results conference call, President and CEO John Dietrich said the company had parked four freighter-converted 747-400Fs in the past couple of months because of soft demand. The aircraft had been previously flying in charter service. Based on flight-tracking tools, Dietrich was referring to two 747-400BCFs (24833 and 26557), parked at Marana (MZJ) since Jan. 2, and at Lleida-Alguaire (ILD) since Feb. 2, respectively, and two 747-400BDSFs (27062 and 27174), parked at MZJ since Dec. 29 and Dec. 24, respectively. These aircraft could be reactivated with the appropriate lead times to bring them back into service, Dietrich said.

Dietrich said he does not anticipate parking any production 747Fs, but one 747-400F is expected to be returned to its lessor during the first half of 2020. Atlas also began flying a 747-400F (26553) on an ACMI basis for Israel-based El Al on Jan. 1, and recently extended leases for two 777Fs for ten more years.

According to Dietrich, Atlas is selling three “non-essential” aircraft in its portfolio. One 757-200F has already been sold, while a 777F and a passenger 737-400 are expected to be sold in the year ahead. The company confirmed to Cargo Facts that the 777F being offered for sale is unit 35606, which was previously dry leased to Emirates and was returned to Titan Aviation Holdings, Atlas’ leasing arm, in 2019. Atlas had previously said this aircraft, parked in Leipzig (LEJ) since the first half of 2019, was “awaiting placement with a customer.”

Dietrich expects Atlas’ performance in 2020 to be an improvement over 2019, subject to developments related to the coronavirus. To that end, Atlas has been handling special charter demand arising from the cancellation of passenger flights and the ensuing lack of belly capacity on a number of trade lanes, most notably to and from China. Atlas is anticipating a peak when production picks up and also when belly capacity resumes due to “significant pent-up demand which favors freighters,” he said.

BeanBurrito

Bull**** move for tax purposes and to scare the union into postponing contract or trick union into same pay or concessions and bull**** NMB into agreeing with them. Any loss they incur are due to being a training ground for pilots to move on to better pay elsewhere instead of paying to keep pilots while using it as an excuse to park older worn out aircraft as a tax write off....Meanwhile UPS headquarters actually comes to its pilot union and offers them a contract extension with 7% pay raise, premium health insurance and increased pension....
Atlas HQ leadership Is full of ****....
Time to pull the chute if you have any options because who wants to put up with that “old school” crap in the day and age of pilot shortages where everyone is hiring.... Seniority don’t meant S—T when you work for a turd.. Just another “oldshool move” playbook move from the DHL ZONE ACMI PLAYBOOK...... that’s why seniority doesn’t mean crap because someone will cut your throat for scraps....it’s not fair and it’s designed that way...

Noworkallplay

Agree with most of your statement except for the UPS stuff. Union went to company for extension due to the fact that they knew the table was not going to be theirs for the next 3 years with Teamsters employees having openers prior to them. The UPS contract extension doesn't give a raise until 2021 (4%) and then another 3% in 2022. Its basically a COLA. We are all rooting for Atlas pilots!!! HOLD THE LINE.

BeanBurrito

3 + 4 = 7 right?..... the other choice is to negotiate for 5 years to get a raise and pennies on the dollar as a signing bonus for the past 5 years of negotiations..... I think I pretty mush had it right.. much better than the alternative...

Noworkallplay

So your good with just a COLA because inflation is about 3% annually. Just curious. This is a COLA extension with a 1% raise only in 2021. I hope Atlas is trying for something better than a COLA

BoilerUP

It also increases our defined benefit, again, which you may note FDX has been unable to achieve over the last couple negotiations.

But yes it is largely a COLA extension with a slight bump in 2021 to account for slightly larger average fleet size. Certainly better than two years of no raises while the company delays due to the Teamsters’ National Master UPS Agreement.

I think everybody wants Atlas pilots to get an ACMI industry-standard to leading contract, pay rates included. Cumulative inflation since 2016, Atlas’ amendable date, is 7.5% per CPI and they deserve MUCH more than that, especially compared with ACMI peer pilot groups.

Hopefully pattern bargaining (in ACMIs, UPS/FDX, LCCs and legacies) will help Atlas pilots achieve the grossly delayed gains they clearly deserve.