Freighter lessor and operator ATSG saw both profits and revenues decline in the second quarter of the year as a result of returned freighter aircraft.
The company saw second-quarter revenues fall 7.7% year on year to $488.4m, earnings from continuing operations before income taxes were down 78.4% to $10.7m and net earnings declined 80.5% to $7.4m.
The company said the declines related to fewer block hours and the return of 767Fs, but added that it expected improved results as the year progressed.
Mike Berger, chief executive of ATSG, said: "Our second quarter results were affected by fewer block hours by our airlines and the scheduled return of Boeing 767-200 freighters since a year ago.
"We beat our internal expectations for the quarter, however, and are positioned for further improvement in the second half of the year, particularly in the fourth quarter.
"We're encouraged by the free cash flow we're generating and have again raised our full year guidance for Adjusted EBITDA. We have leased four aircraft to customers since the end of June and are encouraged by the momentum we're seeing in the global markets we serve.
"We remain proud of the service levels we deliver every day and are particularly pleased that we met commitments to our customer Amazon during this year's Prime Week."
Looking at segment results, its Cargo Aircraft Management (CAM) leasing divisions saw revenues fall 14% in the second quarter and pre-tax earnings were down 51%.
The company explained that the benefit of 14 freighter leases - 11 767s and three A321-200s - over the last year was more than offset by the scheduled returns of nine 767-200 freighters
and four 767-300 freighters over that same period.
Its ACMI division made a pre-tax loss of $7m in the second quarter - compared with a profit of $24m last year - and revenue block hours were down 10%.
The removal of certain 767-200 freighter aircraft from service and less international flying versus the prior year was to blame, the company said.
In addition to the reduced flying hours and reduced revenues, ACMI Services experienced increased expenses for crew training, maintenance, travel and ground service rates.
Looking ahead, the company remained positive and announced the lease of four 767-300 freighters to New York-based SLG Worldwide, which will sublease the aircraft to Euroavia Airlines, a cargo airline headquartered in Larnaca, Cyprus.
The company will also add 10 more 767 freighters for Amazon, although start-up costs for the operation will initially weigh on profits in the third quarter.
Berger added: “We are on track to achieve our improved 2024 outlook. We expect contracted pricing increases and seasonal charter opportunities in the fourth quarter, which should drive improved sequential results in our ACMI Services segment.
"This expected improvement, combined with momentum in our core leasing business, positions us well to drive earnings growth in 2025. We are ahead of our target for positive free cash flow for the year, with $107m generated in the first half and an expectation to add to that total in the second half."
https://www.aircargonews.net/airlines/atsg-leases-more-767fs-to-my-freighter/
