US freighter aircraft operator Atlas Air Worldwide has capitalised on the opportunities presented in the short-term global airfreight market. During the second quarter of 2021, the company posted a net income of $107.1 million, up from $78.9 million in the corresponding quarter of last year. 

Adjusted net income in the second quarter of 2021 totaled $121.8 million, compared with $123.2 million in the second quarter of 2020.

Second-quarter 2021 Airline Operations segment performance improved significantly compared with the prior year that included exceptionally high commercial cargo Charter yields in April and May 2020, the company said in its latest report.

Atlas Air Worldwide president and CEO John W. Dietrich noted that the increased utilisation of its aircraft, and reintroduction of four 747 freighters and one 777 freighter in its fleet through 2020, benefited the company’s second-quarter performance.

“This capacity, along with a tremendous team effort, contributed to our ability to enter into and extend long-term agreements with strategic customers, as well as to capitalize on lucrative short-term opportunities in the strong global airfreight market,” Dietrich said.

“Economic and supply chain conditions remain favorable for air cargo and our dedicated freighters. These include global airfreight volumes exceeding pre-pandemic levels, an acceleration of e-commerce and express growth, low inventory levels, positive Purchasing Managers’ Index readings, as well as congestion, long lead times and elevated pricing for ocean freight. Demand also continues to exceed available supply, particularly on long-haul international routes, as belly capacity on a significant number of widebody passenger aircraft remains out of the market,” he said.

Airfreight volumes up from pre-pandemic levels

Atlas Air Worldwide reported a jump in Airline Operations revenue which reflected an increase in flying and a higher average rate per block hour. Block-hour volume growth during the period was driven by the company’s ability to increase aircraft utilization as demand for its commercial cargo charter and CMI services increased. This demand reflected growth in airfreight volumes from pre-pandemic levels, the ongoing reduction of available cargo capacity in the market and the continued disruption of global supply chains due to the pandemic.

The company has further made steps to firm up capacity and respond to the global airfreight market conditions. Between May and August 2021, Atlas Air Worldwide acquired three of its existing 747-400 freighters that were previously on lease. In May and June 2021, the company also reached agreement with lessors to purchase five of its other 747-400 freighters at the end of their existing lease terms, which range from March to December 2022.

Outlook

The company expects market conditions to remain favorable in the third quarter and for its initiatives to continue driving strong performance. Atlas Air Worldwide is also closely monitoring developments related to COVID-19 and the Delta variant, and any associated impact on global airfreight, operations, demand and economic activity.

For the third quarter of 2021, it expects revenue of nearly $1.0 billion from flying more than 90,000 block hours. In addition, it expects third-quarter 2021 adjusted net income to grow approximately 50 percent compared with adjusted net income of $82.7 million in the third quarter of 2020.

This outlook reflects the contribution of long-term customer agreements with favorable rates and guaranteed levels of flying; high levels of aircraft utilization driven by strong customer demand; and commercial cargo Charter yields to remain above typical seasonal levels.