There was more bad news for air cargo lessor Atlas Air in December when it admitted its revenue for the September quarter and first nine months had fallen "significantly below" projections.
The news has put back an agreement with creditors and lessors that the carrier was trying to reach before filing for Chapter 11 bankruptcy protection. The filing was delayed from mid-December to February.
Failure to get an agreement, the carrier admits, could force it into bankruptcy or to cease operations, though in a statement the carrier says "creditors have agreed several delays and we are hopeful they will continue working with us". Talks with creditors and lessors are ongoing.
Atlas says the poor results were due to lower than anticipated numbers of military charters, the loss of a freighter wet-leasing contract, and lower than expected scheduled service due to a delay in the start of the normal air cargo peak season. A one-month delay at the start of the August to December peak season was reported by many carriers, with most attributing it to the after effects of SARS.
Atlas's net losses for the third quarter were $19.8 million, and for the first three quarters totalled $81.1 million. Atlas's net loss for 2002, only published in December after a lengthy restatement of the carrier's accounts, was $53.8 million.
Atlas, which owns scheduled air cargo carrier Polar Air Cargo, was a major success in the late 1990s through its leasing of Boeing 747 freighters to the world's airlines. When this business slumped in 2001 due to the industry downturn, it turned to charters, mainly for the US military. These accounted for 36% of revenues in the third quarter of 2003, while its wet-leasing business shrunk to just 22%.
As the cash-strapped carrier prepares to scale down its operations it has informed the Air Line Pilots Association, which represents Atlas pilots, that it plans to lay off up to 150 crew members. n
PETER CONWAY LONDON
Source: Airline Business
