Atlas Air Worldwide Holdings yesterday announced continued volume, revenue and earnings growth – excluding the impact of warrant accounting – for the first quarter (Q1) of 2019.
The company also provided an updated full-year growth outlook that reflects the scheduled start-up in 2019 of new long-term 737-800 CMI business.
On a reported basis, results for Q1 were a net loss of $29.7 million, compared with reported income of $9.6 million in Q1 2018.
Reported results for the latest quarter included an unrealised loss on outstanding warrants of $46.6 million compared with an unrealised loss on outstanding warrants of $7.7 million in the year-ago period.
On an adjusted basis, net income in Q1 increased $3.5 million to $27.3 million, from adjusted income of $23.8 million in the year-ago quarter. Adjusted EBITDA in the quarter rose $27.3 million to $121.1 million.
Volumes in Q1 increased 16 per cent to 77,061 block hours, with revenue growing 15 per cent to $679.7 million and total direct contribution for reportable segments rising 21 per cent to $104.7 million.
“Our first-quarter results exceeded our expectations,” said Atlas Air Worldwide president and chief executive officer William J. Flynn. “We are benefitting from a full year of flying the 16 aircraft we added during 2018 for customers such as Amazon, Asiana Cargo, DHL Express, Inditex and SF Express, as well as the three aircraft for Nippon Cargo Airlines that we are adding this year.
Flynn also noted: “Our focus on express, e-commerce and fast-growing markets provides a solid foundation to deliver continued business and earnings growth this year.
“We were pleased to announce an expansion of our relationship with Amazon in March. We are scheduled to begin flying five 737-800 aircraft on a CMI basis for Amazon this year, including two starting this month, with up to 15 more by May 2021.
“This opportunity provides a path to continued expansion in a desirable aircraft type, and it will enhance scale in the 737 platform we operate through Southern Air.
“Reflecting the scale and scope of our domestic and worldwide operations, we continue to anticipate that our adjusted net income in 2019 will grow by a mid- to upper-single-digit percentage compared with the record adjusted net income of $204.3 million that we reported in 2018.
“In providing our current outlook, it is important to note that we are now including start-up expenses that we expect to incur in 2019 in connection with our new 737 CMI service. These start-up expenses were not incorporated in the full-year outlook we announced in February 2019.”
Increased ACMI segment revenue in the first quarter of 2019 primarily reflected an increase in flying partially offset by a slight decline in average rate per block hour.
Block-hour growth during the period reflected increased 767 flying for Amazon, incremental 777 flying for DHL and the start-up of 747-400 flying for new customers. The change in average rate per block hour was primarily due to an increase in smaller-gauge 767 CMI flying.
As for the future, Atlas Air said: “We continue to expect solid full-year business and earnings growth in 2019.
“Global economic activity and airfreight demand, supported by ongoing faster growth in express and e-commerce, are expected to continue to expand at a modest pace, while airfreight tonnage continues to grow from record levels.
“Looking ahead, we expect to generate higher volumes, revenue, adjusted EBITDA and adjusted net income in 2019. We see volumes rising to around 340,000 block hours (with over 75% in ACMI and the balance in Charter), revenue of approximately $3.0 billion, and adjusted EBITDA of about $600 million.”