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Atlas sees an e-Commerce future

NEW YORK: June 15, 2016. In a presentation to investors and analysts, Atlas Air Worldwide Holdings (AAWH) president and CEO William Flynn said the company was expecting a “new era of significant growth and development” reflected in its strategic relationship with Amazon.com.

AAWH says it plans to acquire, convert and put into Amazon service 20 B767-300 aircraft by 2018 – financed by cash generated from the operation and asset-based mortgages.

1 ATLAS AIR B747sCurrently the company operates 16 B767-200/300F aircraft on behalf of DHL and has five more units in a passenger configuration.

In explaining the company’s shifting business focus, Flynn noted that the “traditional” airfreight market has had a compound annual growth rate (CAGR) of 1.7 percent between 2011 and 2016 while the international express market has risen 6.3 percent and e-Commerce 23.5 percent CAGR in the same period.

He added India’s e-Commerce market is expected to reach US$220 billion with a 35 percent CAGR by 2025.

Noting the global growth in e-Commerce, he said the company’s fleet was now better aligned with the express market in having 47 percent of its capacity in large widebody units compared to 31 percent for express carriers; and 100 percent of its capacity in medium widebody aircraft compared to 69 percent for the Integrators.

In seven years AAWH has changed its fleet mix from B747-200/400s in 2009 to B747-800/400s, B777s, B767s, a B757 and B737s by Q1 2016.

Michael Steen, AAWH executive vice-president and COO, said that in addition to the company’s ACMI/CMI business for DHL and planned Amazon service, it had contracts with Astral Aviation, BST, Emirates, Etihad, El Al, LATAM, Panalpina, Qantas, and SonAir.

As a result, he said, AAWH is positioned to grow “multiple product types, in multiple markets with multiple fleet platforms”.

Commenting on strike threats by some of its pilots, AAWH chief operating officer John Dietrich pointed out that because their contracts are based on the Railway Labor Act and do not expire but just become amendable, a recent strike vote had no legal basis.

He added that the collective bargaining agreements for Atlas Air and Southern Air pilots don’t become amendable until September and November 2016 respectively.

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