Atlas Air Worldwide said it is off to an "excellent start" in 2022 after reporting higher revenues for the first quarter despite a decline in volumes amid continuing pandemic-related challenges.

Atlas Air reported a US$1 billion revenue for the January to March period or a 20% rise from the prior-year quarter. It also posted adjusted earnings before interest, tax, depreciation, amortisation (EBITDA) of US$202,814 up 11.9%, although its net income dropped by 9.4% to US$81.5 million.

It added that volumes in the first quarter of 2022 totaled 82,626 block hours compared with 88,523 in the first quarter of 2021.

Atlas Air said that the company benefitted from a US$40.9 million, US$31.9 million after tax, of CARES Act (US government Covid support) grant income last year.

"Excellent start" to 2022

The freighter lessor and operator said the first quarter performance was impacted by increased pilot costs stemming from a new collective bargain agreement, a reduction in less profitable smaller gauage CMI flying, operational disruption due to Omicron, and higher fuel prices.

Nonetheless, Atlas Air noted that the company benefited from higher yields and new and enhanced long-term contracts.

"We are off to an excellent start in 2022. We delivered strong earnings, despite the pandemic-related operational challenges we continue to navigate," said Atlas Air Worldwide president and chief executive officer John W. Dietrich, noting that Atlas continues to demonstrate the value of airfreight as a vital component of the global supply chain.

"We are seeing a sustaining shift in long-term customer demand for Atlas' dedicated aircraft, and the speed and reliability airfreight provides. During the first quarter, our customers continued to enter and enhance long-term contracts with Atlas for dedicated freighter capacity," he added.

The Atlas Air chief said the company is also expanding and diversifying its base, and increasing flying under long-term contracts with attractive rates and guaranteed levels of flying.

To meet customer demand, Dietrich said Atlas Air is investing in its fleet by adding four new 747-8F and four new 777 freighter aircraft.

"All four of our new 747-8Fs have been placed with customers under long-term contracts, and we have strong interest for the new 777Fs as well," he further said, while sounding optimistic of the long-term prospects of the company.

"We are very well positioned for the years ahead. We have significantly strengthened our balance sheet and have a healthy cash balance. This provides us the financial flexibility to opportunistically deploy capital, including investing in our business and returning capital to shareholders," he added.

Positive long-term prospects

For the second quarter, Atlas Air said it expect revenue to exceed US$1.1 billion from flying more than 85,000 block hours and adjusted EBITDA of approximately US$215 million.

It also projects adjusted net income to grow by a high-single-digit percentage compared with adjusted net income of US$88.8 million in the first quarter of 2022.

"For the full year, we expect to fly more than 350,000 block hours, with revenue of approximately US$4.6 billion, and adjusted EBITDA of about US$1.0 billion. In addition, we anticipate adjusted net income in the second half of 2022 to improve approximately 60% compared with adjusted net income in the first half of this year," Atlas Air said in its statement.

Meanwhile, Atlas Air noted that it will be purchasing five of its existing 747-400Fs at the end of their leases during the course of this year, one of which was acquired in March.

"We expect to complete the remaining four aircraft acquisitions between May and December 2022," the company added, noting that keeping these aircraft in its fleet ensures continuity of capacity which will drive strong returns for Atlas in the years ahead.

"Acquiring these widebody freighters underscores our confidence in the demand for international airfreight capacity, particularly in express, e-Commerce and fast-growing global markets," Atlas Air further said.