Mark Szakonyi | Aug 02, 2011 2:24PM EDT
Atlas Air Worldwide Holdings’ net profit fell 27.2 percent in the second quarter to $23.8 million on higher fuel costs and a 38 percent drop in commercial charter business in an air cargo market saturated with capacity.
The parent of freighter operators Atlas Air and Polar Air Cargo said revenue in the second quarter fell 1.9 percent to $349.6 million compared to the same period a year ago, largely because its commercial charter business fell to $71 million within the same period. The loss of commercial charter business was because of softer rates and weaker demand that brought Atlas’ commercial charter block hours down 59 percent.
Atlas said its core ACMI — for aircraft, crew, maintenance and insurance costs the company covers in its long-term leases — business grew 27 percent to $160.4 million
Atlas said it expects improvement with the impending delivery of its first 747-8 aircraft, the new-generation aircraft from Boeing that is supposed to bring improved range and operating efficiency.
“Our 747-8 aircraft will drive volumes and profitability in our core ACMI business,” said William J. Flynn, president and CEO. “At the same time, volumes in our military passenger business, including our new 767 operations, are expected to grow to more than 10,000 block hours in 2012 from less than 1,000 block hours this year and none in 2010.”
Total operating costs increased 6.5 percent in the second quarter to $312 million from the same period a year ago, mainly due to a 20 percent increase in fuel costs.
For the second half of the year, Atlas expects increased utilization of its two 747-400BCF aircraft, which entered the fleet in the second quarter, and increased military passenger service.