Atlas and Airborne are among US airlines tightening their belts following sharp second quarter drop in demand
More US cargo carriers have reported losses after demand for freight flying declined sharply in the second quarter. Atlas Air posted earnings of just $300,000 before restructuring charges that pushed the New York-based carrier into a $49 million loss compared with a $19 million profit a year ago.
Wet-lease specialist Atlas saw revenues decline 22% year-on-year to $149 million, as block hours flown for customers decreased 23%. "Nevertheless, Atlas was able to show a small profit, despite the sharp decline in demand from long-term customers which has resulted in several under-used or idle aircraft," says chief executive Richard Shuyler.
The carrier parked six Boeing 747-200 freighters and laid off 30% of its workforce in the second quarter and now operates a fleet of 29 747s.Atlas does not expect a cargo market recovery before mid-2002 and may defer four 747-400F freighters set for delivery in the second half of next year, Shuyler says. The company is buying scheduled carrier Polar Air Cargo and will keep its five 747-400s, but will dispose of Polar's eight 747-100s and most of its 747-200s, he adds.
Despite cutting costs by $25 million in the second quarter, Airborne Express posted a net loss of $6.4 million compared with a profit of $13.8 million a year ago. This was an improvement over the first quarter, when Airborne lost $17 million. "Our cost-cutting measures have been instrumental in our operating improvement, as shipment and revenue growth have slowed in step with the economy," says chief executive Robert Cline.
In the second quarter, Seattle-based Airborne cut its workforce, reduced flying and deferred deliveries in a bid to reduce annual operating expenses. So far, airline subsidiary ABX Air has not removed any of its 128 aircraft from service but it has deferred delivery of Boeing 767-200 freighters. Airborne will now receive only one converted ex-All Nippon Airways 767 this year and three next year.
Last month, Emery Worldwide Airlines posted a second quarter loss of $370 million. including a $341 million restructuring charge, as traffic on its US domestic air freight network slumped 29%. The charge related to removing 16 aircraft from service, trimming capacity by 30% and reducing its fleet to 38 freighters, and laying off 11% of its workforce.
The slowing US economy affected other freight carriers. UPS saw net income drop 9.4% in the second quarter, to $630 million, despite international growth, while FedEx curtailed its Boeing MD-10 freighter conversion programme after posting a 54% decline in net income for its fourth quarter, to $113 million. Privately held DHL Airways posted a $50 million loss in its first quarter.
Source: Flight International
