Despite an 8 percent, year-over-year, revenue surge, Atlas Air’s fourth quarter net income fell from $41.6 million to $33.5 million, year-over-year. Such discrepancies also extended to Atlas Air’s AMC Charter and Commercial Charter sectors.
Atlas’ AMC Charter revenues rose 48 percent, year-over-year, to $126.5 million, while Commercial Charter revenues slid to $92.6 million in the fourth quarter, a 15 percent, year-over-year, drop. Still, Atlas Air’s ACMI revenues improved slightly in the fourth quarter, increasing 2 percent, year-over-year, to $162.6 million.
Unfortunately, this gain and profits in the AMC Charter sector were partially offset by higher operating expenses. Increased fuel prices, higher labor expenses and hefty aircraft rents contributed to a 12-percent, year-over-year, surge in operating expenses; maintenance expenses, however, decreased significantly from the fourth quarter of 2010.
Atlas Air CEO William Flynn said these results highlight what can only be described as a challenging quarter. “We performed well by historical standards, but global economic conditions, delivery delays for our new 747-8 freighters, delays in the ramp-up of CMI service for Boeing, and the impact of pre-operating costs for new initiatives all contributed to lower-than-anticipated earnings,” he said in a statement.
Boeing handed over the first freighter to Atlas in November, despite the carrier rejecting three early-build 747-8Fs that were scheduled for delivery in 2012. Atlas acquired two additional 747-8Fs in mid-December.
The outsourced aircraft and aviation services company is slated to take delivery of four more freighters in 2012, with two arriving in the third quarter and two coming in the fourth quarter; the remaining two freighters are scheduled for delivery in the first half of 2013.
Despite projections for another challenging year for air cargo, Flynn expects these aircraft to boost Atlas Air’s operations tremendously. “Our new 747-8Fs, which will drive growth and profitability in our business going forward, have begun to enter service and will be an important contributor this year,” he stated.
“Along with a full year of AMC Charter passenger service as well as a continuing step-up in CMI flying for Boeing and DHL Express, we believe these will more than offset an anticipated reduction in AMC Charter cargo demand in 2012,” Flynn continued.