Atlas Air signalled expectations of strong airfreight market continuing for the "foreseeable future" as it reported historic revenue for the third quarter.
The cargo airline said its focus on "express, e-commerce and fast-growing global markets" boosted its performance for the period where it reported a net income of US$119.5 million compared with net income of US$74.1 million seen in the third quarter of 2020.
"We delivered outstanding financial and operating results in the third quarter. We flew over 90,000 block hours and generated quarterly revenue that exceeded US$1.0 billion for the first time in our company’s history," Atlas Air Worldwide president and chief executive officer John W. Dietrich, said.
"Our strategic focus on express, e-commerce and fast-growing global markets is driving robust demand for our services and producing strong financial performance," he added, noting that despite the very challenging pandemic operating environment, the carrier was able to increase utilization of its aircraft to serve the global supply chain.
Capacity constraints cited
"We are operating in a very strong airfreight market, and we expect industry conditions to remain favorable for the foreseeable future," the Atlas Air chief said. "Global airfreight volumes continue to exceed pre-pandemic levels, while industry capacity, particularly on long-haul international routes, has not kept pace with demand."
Dietrich said supply chain bottlenecks, including the widely reported challenges at ocean ports worldwide, are "driving increased modal shift to air as manufacturers, retailers and shippers strive to replenish very low inventory levels, especially ahead of the holiday shopping season."
"This current environment has also led to a structural acceleration of express growth and e-commerce adoption, which will drive both current and longer-term airfreight demand," he added.
Moving forward, the Atlas Air chief said its performance for the rest of the year is expected to continue its upward trend.
"We expect record revenue and adjusted earnings in the fourth quarter of 2021, with revenue of nearly US$1.1 billion and adjusted EBITDA of about US$325 million," Dietrich said. "We also anticipate adjusted net income to grow in excess of 20% compared with our prior fourth-quarter adjusted net income record of US$143.2 million in 2020."
Atlas Air also noted that it recently announced long-term contract extensions for 20 aircraft with DHL Express as well as a new long-term ACMI agreement with FedEx.
The all-cargo carrier said the outlook includes the impact of its new five-year joint collective bargaining agreement with its pilots and other proactive initiatives to help mitigate the higher costs of the new agreement.
"It also reflects the increased contribution of numerous new and extended long-term customer agreements, high levels of aircraft utilization driven by strong customer demand, and solid peak-season volumes and yields," it added.
Positive outlook expected
"We are very proud of our performance during the first nine months of 2021, and we are continuing to see strong business conditions in the fourth quarter. Subject to any material COVID-19 or other developments, we anticipate solid peak-season volumes and yields, reflecting strong global demand for our aircraft and services," the carrier added.
Due to this, Atlas Air said it expects the fourth quarter of 2021 to have "the highest quarterly revenue and adjusted earnings in the company’s history," with revenue of nearly US$1.1 billion and adjusted EBITDA of about US$325 million from flying more than 90,000 block hours.
