World Airways signs contract with Ethiopian Airlines, reports 3Q results

World Airways signs contract with Ethiopian Airlines, reports 3Q results World Airways has signed a contract with Ethiopian Airlines to provide DC-10-30F cargo service between Addis Ababa, Ethiopia and Brussels, Belgium beginning in January.
   The contract is valued at an estimated $6.8 million, and will provide two DC-10 freighters, one for five months and one for three months.
      “World Airways will operate these freighters primarily to transport perishables,” said Rob Binns, World Air Holdings’ chief marketing officer, in a statement.
   In a separate matter, World Airways’ parent company, Peachtree, Ga.-based World Air Holdings, has reported its preliminary financial results for the third quarter ended Sept. 30.
   In May, the Nasdaq Stock Exchange delisted World Air following a series of delayed financial reports, which the company said were related to its acquisition of passenger carrier North American Airlines.
   World Air’s consolidated revenue for the third quarter was $231 million, which included an operating income of $8 million and net income of $6 million. The company generated $9 million in cash flow from operations and ended the quarter with $41 million in cash and short-term investments.
      “Although we accomplished a $21 million improvement in third quarter operating income over the second quarter of this year, our full-year financial performance will reflect the negative impact of a number of unexpected events,” said Randy Martinez, World Air’s chief executive officer.
   “These events include World Airways being placed on penalty by the Air Mobility Command (AMC) during the second quarter, the impact to our income statement of the Delta Air Lines bankruptcy filing as it related to our MD-11 engine overhauls, and an unexpected curtailment of troop movements for the last half of December.
   “This has certainly been a challenging and difficult year for the company. While we clearly dealt with some unique circumstances in 2006, we’ve learned from those challenges and we believe the foundation has been laid for a solid performance in 2007. We are, however, reminded of the difficulties we face in trying to predict the demand for our largest customer, the AMC. This fact further reinforces our strategic goal of revenue diversification,” Martinez said.