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Atlas Air refuses to repay US bailout funds

Cargo airline says it complied with CARES Act legislation despite huge profits

Atlas Air operates the world's largest fleet of Boeing 747-400s. It is riding the strong trade wave this year to big profit growth. (Photo: Atlas Air)

Atlas Air Worldwide Holdings (NASDQ: AAWW) last week reported an eightfold increase in adjusted net income and 25% more revenue in the third quarter compared to last year, but will not return $406 million in emergency coronavirus aid the U.S. government intended for financially battered airlines to retain workers.

The all-cargo carrier and aircraft lessor fully qualified for the federal funds because there was no guarantee the airfreight market would flourish at the time, the program wasn’t needs-based and the money went toward employee compensation, as Congress intended in the CARES Act enacted in March, CEO John Dietrich insisted during a conference call with analysts to discuss financial results.

“What we evaluated was kind of the totality of our circumstances, including some of the challenges that presented themselves immediately when COVID hit. There was a tremendous amount of uncertainty. China effectively shut down not only during Lunar New Year, but for weeks thereafter, for which we experienced a significant impact on our business,” Dietrich said. 

Earlier in the call he suggested that subsidiary carriers Atlas Air and Southern Air provided a 10% pay premium in May to compensate pilots for hardships operating in COVID hot spots, but union members say the 10% pay hike was already being discussed before the CARES Act grants were awarded in response to a proposal from Local 2750 and that it’s relatively meaningless because compensation is still 50% below their peers.

Rep. James Clyburn, D-S.C., chairman of the House Oversight and Reform select subcommittee on the coronavirus crisis, last month said four cargo airlines weren’t eligible for the payroll assistance because freight business, unlike for passengers, was booming, and he asked them to return a combined $630 million.

Passenger airlines divided $25 billion in grants under the Payroll Support Program, designed to cover employees’ base pay and benefits for six months as the industry slashed expenses to cope with the devastating impact of shutting down nearly all passenger business for two months as the pandemic spread. Cargo airlines received $4 billion too on condition that no workers would be let go.

But the air cargo industry, especially companies that operate big freighters, is thriving. A 30% shortage in airlift caused by the loss of belly capacity in grounded passenger aircraft, combined with strong demand for COVID-19 medical supplies and a shift in spending toward goods rather than services, has forced shippers to pay top dollar or get left behind. Rates are two to four times greater than last year, depending on the route, and were even more — nearly $20 per kilogram — during the stampede to export personal protective equipment from China last spring.

Atlas Air, which counts Amazon, DHL and Alibaba among its top customers, ended the third quarter with $729 million in cash and short-term investments compared to $114 million, and a debt-to-earnings ratio 2.5 times lower than in the year-ago period. It expects to increase revenue an additional $40 million in the current quarter and adjusted net income to grow 25% from the one ended Sept. 30.

“It was not something that we had to demonstrate our need to be able to pay on payroll,” Dietrich said. “But for all those reasons … we are not intending to return the funds, and we responded accordingly and have been in full compliance, not only with the committee’s request, but sharing the documents and so forth that they’ve asked for, and we’ll continue to fully cooperate.”

The coronavirus oversight subcommittee has not disclosed what, if any, communications it has received from Atlas, Amerijet, Kalitta Air and Western Global Airlines. It also called out several airport support service companies for accepting money and then laying off thousands of employees.

Labor relations between the union representing Atlas Air pilots and the company are at an all-time low after negotiations on a new contract have dragged on for four years. Using the hashtag #ShameOnAtlas, pilots, who say  the company is stonewalling because the law doesn’t allow them to strike, are pillorying Atlas on Twitter for taking a government bailout.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.


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  1. Andrew


    THEY ARE NOT refusing. They are FULLY complying with the PPP rules and regulations. Accordingly, they are ENTITLED to not repay the funds.

    “It was not something that we had to demonstrate our need to be able to pay on payroll,” Dietrich said. “But for all those reasons … we are not intending to return the funds, and we responded accordingly and have been in full compliance, not only with the committee’s request, but sharing the documents and so forth that they’ve asked for, and we’ll continue to fully cooperate.”

    What part of “in full compliance” do you folks not understand??

    They did and are doing EXACTLY what the program required and requires. This is a NONSTORY that’s intended to inflame ignorant folks and paint Atlas in a bad light.

    They are in FULL COMPLIANCE with the program. Full stop and end of story.

    1. Stephen Webster

      Cut any company that got gov wage subsidy and make a profit of over one million dollars this year net income out all Fed state and local government projects including road

  2. Art

    Tip of the iceburg.

    Many companies claimed “hardship” to get PPE money but have been thriving during the pandemic.

    I see many “struggling” small business owners upgraded cars this year…

      1. Andrew

        How would they have known IN ADVANCE whether they would or wouldn’t need it? What was happening with all the tyrannical government diktats was unprecedented. That things turned out better than expected for them is irrelevant to the operation of the PPP program. They were and are in full compliance with its requirements.

        End of story.

  3. Stephen Webster

    This is so wrong if they do not pay the money back the gov should bring out a new tax for some air cargo transportation and rail way s and trucking companies that did not need. Many people in Ontario Canada are very unhappy that they did not apply for C E R B or wage subsidy when they could so the money would be available for others. Many of these small trucking companies and repair shops put others ahead of themselves. I am talking about companies with less than 25 employees and people that worked for fast food places and small retail members
    Most would have go less than $100,000 cd .At the same time certain trucking companies got over $10 million and in some cases over $50,000,000 One company in the Windsor area got almost one million dollars in wage subsidies but is committed to repay the money by putting it into local health care and aid to local food aid even though is difficult for the company.

    1. Lou Deland

      Atlas flys 10 passenger Aircraft, for Military and VIP Charter, it’s a shame that the author didn’t know this.

      Do your research.

Comments are closed.

Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. In December 2022, he was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at [email protected]