Atlas Air Worldwide has reported that its revenue and earnings fell below their targets in the second quarter with senior decision-makers blaming tariffs and trade concerns.
Revenue for the three months ending 30 June 2019 came in at $663.9 million, down from the $666.1 million reported for the same quarter of last year.
Second quarter net income in 2019 was $86.8 million compared to a loss of $21.1 million in 2018 and adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) was $86.4 million.
Adjusted income from continuing operations net of tax was down 90.9 per cent in the second quarter to $4.5 million, and by 56.7 per cent to $31.8 million in the six months up to 30 June.
For the first half of 2019, net income in the first half of 2019 was $57.1 million compared to a loss of $11.5 million in 2018, which had been caused by unrealised losses on outstanding warrants of $50 million.
Atlas Air chief executive officer, William Flynn said: “Revenue and earnings in the second quarter were below our expectations, as air cargo volumes and yields were affected in the near term by the widely reported impact of tariffs and trade tensions. In addition, our results during the period were impacted by labour-related service disruptions.”
He added that with manufacturers and shippers taking a “wait-and-see approach” regarding tariffs and trade issues during the course of the quarter, Atlas experienced a softening in anticipated commercial cargo block hours and yields in its charter segment.
Flynn did though say that Atlas Air is undergoing improvement initiatives to increase productivity, enhance efficiency and grow the business.
He also commented on the ongoing battle with pilots and said: “We remain committed to negotiating a competitive collective bargaining agreement for our pilots. Our recent bargaining sessions have made progress, and we look forward to the upcoming scheduled sessions to continue that progress toward an agreement that all parties want.”
Responding to the results, Captain Robert Kirchner, a recently retired Atlas Air pilot and executive council chairman for Atlas Air pilots of Teamsters Local 1224, said Atlas Air executives blaming trade tensions and labour-related disruptions for their poor performance is “an attempt to deflect the blame for mismanagement”.
“The lack of pilots and overpromising of services to customers like Amazon Air are resulting in operational chaos. Our pilots are also constantly being asked to fly on their days off because of poor planning by Atlas Air executives.
“This disorganization led to more than 400 flights without an assigned crew in July. Atlas Air can only put on this charade for so long. It’s time for executives to stop stonewalling negotiations and get serious about settling a fair contract with pilots,” he added.