Aircraft lessor ATSG saw first-quarter net earnings increase on the back of demand at its Cargo Aircraft Management (CAM) business and lower federal taxes.
The company saw revenues for the period decline by 14.6% year on year to $203m, although this reflected the adoption of a new revenue standard and $54.4m in reimbursable expenses last year. With these stripped out, ATSG’s revenues would have improved by 11% on a year earlier.
Operating income for the period increased by 54.2% on last year to $27.6m and net earnings were up 59% to $15.9m.
ATSG president and chief executive Joe Hete said: "Continued earnings improvement from our airline businesses and the reduction in the federal tax rate drove a more than doubling of our first quarter adjusted earnings from continuing operations compared to last year.
“The outstanding efforts of our employees, and strong customer demand for our growing portfolio of freighter aircraft, point to further success during 2018.”
Its CAM business saw profits improve due to the increase in leased freighters in service - CAM was leasing 52 cargo aircraft to external customers as of March 31, nine more than a year earlier.
Regarding its ACMI business, principal factors contributing to the profitability gains versus the first quarter of 2017 were additional flying for CMI customers, lower depreciation expense, and reductions in premium pilot pay and training.
“We are off to a very strong start and optimistic about our growth in revenues and cash flows for the rest of 2018," Hete said.
"We continue to project delivery of ten 767-300 freighters to customers this year, one more than last year.
“Customer demand for additional 767s remains strong. We have customer commitments for seven of the 10 newly converted 767s this year, all of which will be straight dry leases.
“An agreement for an eighth dry lease is being finalised, and we have strong interest from customers for the remaining two."
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