Atlas Air Worldwide reported a continued recovery in the third quarter and expects "solid" performance to end the year to be driven by e-commerce growth and end-of-the-year airfreight demand.
In a statement, Atlas Air Worldwide Holdings CEO John W. Dietrich said the company is also seeing "substantial demand for long haul widebody services.
"The positive momentum of our business continued in the third quarter, despite a more complex, costly and challenging operating environment caused by the COVID-19 pandemic," Dietrich said, noting that Atlas Air's performance is the result of efforts to "increase utilization of aircraft and execute on strong market demand and higher yields."
Increased demand for widebody
With its expanding list of partners worldwide — Cainiao, the logistics arm of Alibaba, HP Inc., Amazon and several large global freight forwarders — Atlas Air said they're also seeing an increased demand for widebody services.
"We are seeing substantial demand for our long-haul widebody services, both near- and long-term, at attractive yields. We are leveraging the agility of our business model and the scale of our fleet and global operations to serve this increased customer demand," Dietrich added.
In order to meet customer demand, Atlas Air said it is reactivating its fourth 747 freighters that had been previously parked. This will add to the three 747 freighters and the 777 it placed back into service during the second quarter of the year.
"We continue to broaden our customer base and grow with existing customers to maximize market opportunities. We further increased our roster of long-term charter customers, including the addition of Cainiao ... we also expanded operations for Amazon, where we began CMI flying three additional 737 freighters since September," Dietrich said. Atlas Air now operates eight 737s for Amazon.
Meanwhile, Atlas Air noted that these long-term customer agreements provide "secure and attractive earnings" streams for the company and "deepen" its strategic position in the fast-growing e-commerce sector, as well as in important global markets like China and South America.
Outlook for yearend
With these developments, the cargo airline is looking ahead to further expansion towards the end of the year with e-commerce, among others, driving the growth.
"Looking to the fourth quarter, and subject to any material COVID-19 developments, we anticipate solid volumes and yields driven by continued e-commerce growth and end-of-the-year airfreight demand, coupled with the reduction of available cargo capacity in the market," Dietrich said.
"We anticipate fourth-quarter revenue of about US$850 million and adjusted EBITDA of approximately US$215 million," he added, noting that Atlas Air also expects fourth-quarter 2020 adjusted net income to grow approximately 25% compared with adjusted net income of US$82.7 million recorded in the third quarter of this year.