Atlas Air Plan to Clear Exit from Bankruptcy

Atlas Air Plan to Clear Exit from Bankruptcy

Copyright 2004, Traffic World, Inc.

Atlas Air Worldwide Holdings hopes to emerge from bankruptcy by July 29 now that the parent of freighter airlines Atlas Air and Polar Air Cargo has reached a settlement with attorneys for the company''s unsecured creditors.

Atlas and its creditors will ask a federal bankruptcy judge in Miami to approve the agreement at a hearing June 7, paving the way for the world''s largest operator of 747 freighters to leave Chapter 11 bankruptcy protection. Under the plan, the creditors would get between $30 million and $40 million, some of it in cash from the parent company. Some $20 million of it would come from a rights offering in Atlas shares underwritten by some of Atlas'' creditors.

The agreement "moves us closer to our goal of emerging from bankruptcy as quickly as possible and with minimal disruption to our operations," said Jeffrey H. Erickson, president and CEO of Atlas Air Worldwide Holdings.

Approval would end a bitter legal battle between the Purchase, N.Y.-based airline and unsecured creditors. Some of those creditors have sought a dramatic restructuring of the company operation, including separation of the Atlas Air business tied to the troubled wet lease market and the forwarder-focused retail operations of Polar Air Cargo.

Atlas, once termed one of the healthiest airlines in all of aviation, filed for bankruptcy more than a year ago after its market for outsourced freighter operations on behalf of other airlines went into steep decline. The carrier has shifted some of its operations to other types of business and has been helped by charter work for the U.S. military but industry analysts have said the nearly 40 widebody aircraft in the Atlas and Polar fleets are too many for the current world air freight market.

According to a statement from Atlas Air Worldwide Holdings, the bankruptcy court set June 7 hearing on the settlement with creditors and the amended reorganization plan. Once all parties approve the plan, the company said, AAWH could emerge from bankruptcy protection by July 29.