3rd quarter results for AAWW

[dave colavecchio]

"The parent of Atlas Air and Polar Air Cargo said its third-quarter net income fell to $7.1 million from $29.9 million a year earlier, but that it was on pace to have a rebound in the fourth quarter. Atlas Air Worldwide Holdings said it should outperform 2005 net income in the October-December period, after trailing the 2005 numbers most of this year. The firm's main freighter unit, Atlas Air, is a major supplier of 747-400 and -200 cargo planes and crews in the leasing market, while Polar operates a scheduled -400 service. The company depends heavily on military business, but this year purposely repositioned to build more of its business on the commercial side. And it laid some bold plans, scrapping Polar's less-efficient -200 planes to cut operating costs and recently signing a deal for DHL to buy 49 percent of that carrier and lock up nearly all its capacity starting in 2008. Even before that, Atlas abandoned a steady program to upgrade its fleet with -400 conversion freighters; instead, it ordered new-era 747-8s that are still in development and expected to further cut operating costs. "We began 2006 with a cost structure and fleet sized for 2005's unusually high military volumes," said William Flynn, president and CEO. "We have since strategically repositioned the company for margin improvement and earnings growth, and we're going into 2007 with our fleet and cost structure scaled to fit more sustainable business opportunities." Atlas Holdings said the third quarter included weaker demand for its -200s, but a bump in calls for the -400 freighters and stronger block-hour rates. Traffic in revenue ton miles rose nearly 12 percent from the 2005 period."