Atlas Air 1st quarter earnings depressurize
Atlas Air and Polar Air Cargo parent firm Atlas Air Worldwide Holdings reported a first-quarter loss of $5.3 million last week, citing higher fuel prices for a reversal from a year-ago first-quarter profit of $6.2 million.
'Record commercial fuel prices — up nearly 50 percent over last year — had a substantial impact on our scheduled service results during the first quarter,' said William Flynn, Atlas president and chief executive officer. 'They have also increased our projected fuel bill for the year by nearly $30 million since our prior guidance, after giving effect to expected surcharge recovery.'
Total aircraft fuel costs rose 28.7 percent, or $32.2 million, during the first quarter.
The Purchase, N.Y.-based air freight firm reported first quarter revenue rose to $373 million from $355.3 million during. Based on current expectations of fuel prices, and noting a 20 percent rise in fuel costs since late February, Atlas predicted pretax earnings for 2008 to surpass $105 million. The firm also maintained its pretax earnings estimate for 2009 at $165 million to $175 million.
First quarter operating revenue rose 5 percent, or $17.7 million, 'primarily due to fuel-driven pricing increases in scheduled service, commercial charter and AMC, offset in part by reductions in AMC and ACMI volumes,' according to Atlas.
Also reflecting increases in fuel prices, Atlas reported first-quarter operating expenses rose $37.8 million, or 11.2 percent, over first-quarter 2007. The firm also cited increases in ground handling, landing fees, and maintenance costs due to increased scheduled and charter flights. Atlas said that a portion of these costs were offset by reductions in labor expenses, depreciation and other operating expenses.