Strategic Partnership with DHL

[dave colavecchio]

"Atlas Air Worldwide Holdings and DHL to Form Strategic Partnership DHL to Acquire from an AAWW Subsidiary a 49 Percent Equity Interest in AAWW’s Polar Air Cargo Scheduled-Service Business for $150 Million Cash; 20-Year Commercial Capacity Arrangement with Potential Revenues in Excess of $3.5 Billion Purchase, NY - October 16,2006 -- Atlas Air Worldwide Holdings, Inc. (AAWW) (Nasdaq: AAWW), a leading provider of global air cargo services, announced today that its subsidiary, Polar Air Cargo Worldwide, Inc., has executed a letter of intent for DHL to acquire a 49% equity interest, including a 25% voting interest, in the scheduled-service business of Polar Air Cargo, Inc. (Polar), in exchange for $150 million in cash. The proposed transaction includes a strategic 20-year commercial arrangement that will ensure DHL access to aircraft capacity in key global markets, while providing the AAWW companies with a valuable, long-term customer and potential revenue stream in excess of $3.5 billion over the full-term of the agreement, although there are certain early termination rights at five-year intervals. In addition, DHL will have access to available additional aircraft capacity from AAWW's subsidiary Atlas Air, Inc. (Atlas). William J. Flynn, President and CEO of AAWW, said, “This is a landmark transaction and exciting partnership for our Company. Our strategy has been to maximize the value and potential of our scheduled-service business, and this transaction accomplishes that goal. DHL is a pre-eminent express service provider and the world’s largest buyer of third-party airlift capacity. Their investment and the long-term commercial agreement will markedly strengthen our scheduled-service business, and will enhance our ability to provide customers with superior service in key international markets. Further, it provides our Company with a significant increase in our cash liquidity and a very attractive long-term revenue stream. Indeed, this transaction reinforces our leadership position as an outsource provider of air cargo services, and greatly enhances the value of our Company.” “This key strategic partnership ensures we can meet the rapidly rising demand for air cargo capacities between the U.S. and Asian destinations. DHL Express is already the market leader in Asia and the partnership with Polar will help us offer even higher quality levels to customers, while at the same time improving profitability on the fast-growing routes between the U.S. and Asia,” said John Mullen, CEO of DHL’s Express division. “The Trans-Pacific route is one of the most rapidly growing and competitive trade lanes globally and adding capacity through an even stronger presence in the U.S. is a crucial factor in supporting our dynamic Asian business. Polar is the ideal partner to achieve that. Our long-term partnership will benefit both companies and enhance competition in the express delivery sector of the air cargo market.” Added Mr. Flynn, “This partnership also marks another important milestone for us as we continue to lay the foundation for AAWW’s long-term strategic plan. We have a winning strategy that is designed to meet the growing needs of our customers and to build shareholder value, and we are successfully delivering on each of our strategic initiatives.” Pursuant to the terms of the letter of intent, DHL would acquire from an AAWW subsidiary a 49% ownership interest, which includes a 25% voting interest, in Polar’s scheduled service business, in exchange for DHL’s cash payment of $150 million, $75 million of which will be paid upon the closing of the transaction, and $75 million to be paid in two installments on January 15, 2008 and November 17, 2008 subject to certain acceleration provisions. Under the terms of the 20-year commercial arrangement, DHL would have access to lift capacity through Polar’s current fleet of six Boeing 747-400 Freighters, plus access to additional available ACMI aircraft from Atlas. The transaction, which is subject to the completion of definitive documentation, is targeted to take place in late 2006 or early 2007 and will be subject to the receipt of all applicable regulatory and other third-party approvals and other customary closing conditions. In recent months, AAWW has implemented and delivered on a number of initiatives in support of its strategic plan, including: optimizing business unit performance, fleet renewal and technology leadership, and various continuous improvement programs. Said Mr. Flynn, “We will gain other business unit benefits as a result of our transaction with DHL. It will significantly improve profitability and predictability in scheduled service, and will mitigate our Company’s exposure and commercial risk in that business. The transaction also strengthens our ACMI aircraft wet-lease business through the long-term placement of committed aircraft, with the opportunity for strategic expansion.” A key component of the Company’s strategic plan focuses on fleet renewal and technology leadership, which AAWW has addressed through its recent order for 12 state-of-the-art Boeing 747-8 Freighters, with options to purchase an additional 14. With this order, AAWW becomes a launch customer for the 747-8F, and will be among the first to offer its customers the greater capacity and improved operating performance of this aircraft. In addition, earlier this month AAWW’s military charter business earned increased share awards, which, combined with AMC rate increases, will help grow that business. The Company also has implemented a number of continuous improvement programs, highlighted by its multi-year $100 million dollar cost improvement and revenue enhancement program, as well as a customer-focused program to deliver exceptional service quality. AAWW has improved its financial flexibility as evidenced by the pay-off of two outstanding aircraft debt facilities and the retirement of a working capital credit facility. Said Mr. Flynn, “We are firmly on track to deliver on our savings improvements, to achieve exceptional quality for our customers, and to improve our financial flexibility. Continuous improvement is integral to our culture, and to our success.” He concluded, “Over the past several months, we have made excellent progress delivering on our strategy, with each initiative moving us toward our goal of delivering the greatest possible value to customers and shareholders. Clearly, our foundation is solid, we are making excellent progress in delivering on our commitments, and we are positioned for a winning future.” Through its subsidiaries, Atlas and Polar, AAWW currently operates a fleet of 35 Boeing 747 freighter aircraft, serving customers and markets around the globe. Polar provides scheduled air cargo services to most of the world’s largest international freight forwarders, operating airport-to-airport routes on a specific schedule serving Asia, Europe, North America and South America. Atlas offers commercial cargo charters, military cargo charters, and ACMI freighter aircraft leasing in which customers receive a dedicated aircraft, crew, maintenance and insurance on a long-term lease basis. Conference Call and Webcast AAWW’s management will host a conference call to discuss the formation of the strategic partnership with DHL at 1:00 P.M. Eastern Daylight Time on Monday, October 16, 2006. Interested parties are invited to listen to the call live over the Internet at www.atlasair.com or www.earnings.com. For those unable to listen to the live call, a replay will be available on the above Web sites through Friday, October 20, 2006. A replay will also be available through October 20 by dialing (800) 405-2236 (domestic) and (303) 590-3000 (international) and using Pass Code 11074013#. About Atlas Air Worldwide Holdings, Inc.: AAWW is the parent company of Atlas and Polar, which together operate the world’s largest fleet of Boeing 747 freighter aircraft. AAWW, through Atlas and Polar, offers scheduled air cargo service, cargo charters, military charters, and ACMI aircraft leasing in which customers receive a dedicated aircraft, crew, maintenance and insurance on a long-term lease basis. AAWW’s press releases, SEC filings and other information may be accessed through the Company’s home page, www.atlasair.com. This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect AAWW’s current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of AAWW and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our continued ability to remedy weaknesses in our internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; pending and future litigation; and other risks and uncertainties set forth from time to time in AAWW’s reports to the United States Securities and Exchange Commission. For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the Annual Report on Form 10-K filed by AAWW with the Securities and Exchange Commission on April 14, 2006. Other factors and assumptions not identified above are also involved in the preparation of forward-looking statements, and the failure of such other factors and assumptions to be realized may also cause actual results to differ materially from those discussed. AAWW assumes no obligation to update such statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law."

[cyoo eddie]

wow.... do I understand this as we can soon fly dhl flights with atlas and polar planes??? Or do we bring in dhl planes into the atlas/polar fleet???

[Bodo Mueller]

"

Or do we bring in dhl planes into the atlas/polar fleet???

Well, their fleet is not that exciting....a bunch of Airbus A300B4 F, a couple old 727, 757F, 767-200F and which is in my eyes the most interesting: DC-8-73 http://www.airliners.net/open.file/1097604/L/ I wonder what engines these are, look like RR or a kind of GE...."

[dave colavecchio]

"It doesn't mean we are going to be flying DHL aircraft. DHL obviously has a need for extra long haul capacity and bought access along with 25% of voting rights on the Board of Directors. Basically- it gives Polar a lot of cash and will ensure airplanes have a lot more consistent revenue generating freight on them as DHL is huge and worldwide. Think about it - they can put large amounts of those small DHL envelopes in bulk containers and get them to their far away destinations quicker and cheaper than to have dedicated A-300's and DC-8's for it. They are missing the capability that freight companies like UPS and FedEx have with their MD-11's, 747's, and A380F's on order. This gives them that capability. It also gives DHL preferred access to Atlas' fleet for additional lift. It's a win -win partnership I'm sure for both companies. Watch for schedule changes that mesh well with DHL flights in the future...In your spare time you can go to polaraircargo.com and listen to the conference call to learn the nitty gritty. And those are CFM engines on the DC-8-70 series. The same core as are on 737's and the A-320 family."

[cyoo eddie]

"Thems nice shinny engines there on that dc8-70, there is also a new dhl repaint for the 744 in the pmdg downloads, I havnt seen it yet. "

[thansson]

So should we drop these guys a note to see if they need help in the virtual world as well?? http://www.dhl.flyvirtual.org/

[dave colavecchio]

"I'd like to thank Craig for his heads up on this. I listened to the conference call which is available at polaraircargo.com - click on webcasts on the left side. It says that Polar will carry freight for DHL mainly on the U.S. to Asia routes on behalf of DHL Express. Their freight now is mainly carried on Northwest's classic freighters. They expect to take 30-40% of the aircrafts capacity on those routes. If demand exceeds the capacity, Atlas will provide the extra lift that's necessary as ACMI on behalf of DHL. Look's like the Northwest Airlines -200F classics are getting to expensive to operate as well. Hopefully no aircraft will be painted in DHL's pasta vomit scheme. It does look like Polar has secured it's future as the stock was up significantly during normal and after hours trading today...."

[mlegein]

"

wow.... do I understand this as we can soon fly dhl flights with atlas and polar planes??? Or do we bring in dhl planes into the atlas/polar fleet???

You can drive one of their yellow trucks, Eddie. "

[esurfman]

"

So should we drop these guys a note to see if they need help in the virtual world as well?? http://www.dhl.flyvirtual.org/

AHHHHH!!Good old hostile takeover "