Revenues for Air Transport Services Group (ATSG) were affected by the performance of its Cargo Aircraft Management (CAM) division in the fourth quarter and full year as leased freighter returns exceeded new leases.
CAM’s aircraft leasing and related revenues decreased 12% for the fourth quarter and 6% for the year.
While revenue benefited from nine additional Boeing 767-300F leases since the end of December 2023, these lease revenues were more than offset by the scheduled return of nine Boeing 767-200F and four 767-300F and lower lease-related maintenance revenue over that same period, said ATSG.
At the end of the fourth quarter, 91 CAM-owned aircraft were leased to external customers, one more than at the end of the fourth quarter of 2023. During 2024, five 767-200Fs were removed from service. Six 767-200Fs and three 767-300Fs were sold during the year.
Overall, during 2024, CAM added nine 767-300Fs and placed all nine of these aircraft with external customers under long-term leases.
Eleven more customer-provided 767-300Fs were subleased to and operated by an ATSG cargo airline during 2024, for a total of 27 such aircraft in the fleet at the end of the year.
However, fourteen CAM-owned aircraft were in or awaiting conversion to freighters at the end of the fourth quarter, nine fewer than at the end of the prior-year quarter. This included seven 767s, one A321, and six A330s.
CAM’s fourth quarter pretax earnings decreased $9m, or 44%, to $12m versus $21m for the prior-year quarter, and decreased by $51m, or 46% to $59m for the full year.
Segment depreciation expense increased by $34m and interest expense by $12m versus the prior year.
Overall performance
For the fourth quarter, the Group had revenues of $517m, matching the $517m revenues in the same quarter of 2023. For the full year, the Group had revenues of $2bn, versus $2.1bn in 2023.
Its ACMI business reported pretax earnings were $26m in the fourth quarter, versus a pretax loss of $2m in the fourth quarter of 2023. Results benefited from eleven customer-provided Boeing 767-300 aircraft that were added to flight operations, as well as revenue rate increases since the prior year.
Full-year ACMI pretax earnings were $1m in 2024, versus $32m in 2023, down due to reduced flying in both our customers’ delivery networks and passenger operations, as well as increased costs for depreciation and amortization, employee compensation and customer incentives compared to 2023.
Revenue block hours for ATSG’s airlines increased 1% for the fourth quarter but declined 6% for 2024 over 2023. Cargo block hours increased 3% for the fourth quarter, driven by the eleven incremental customer-provided aircraft, but declined 5% for the year when compared to 2023.
In November, ATSG entered into a definitive agreement to be acquired by Stonepeak. Last month, ATSG received shareholder approval for the acquisition. ATSG is now working to obtain approval from the US Department of Transportation.
