Atlas tries to stave off creditors, moves toward bankruptcy
The parent company of Atlas Air Inc. and Polar Air Cargo said a shortfall in anticipated revenue has delayed the company's restructuring in preparation for entering bankruptcy protection.
Atlas Air Worldwide Holdings pushed back its anticipated bankruptcy filing date from Dec. 15 to Feb. 1 in order to allow more time to obtain $50 million in debtor-in-possession financing, and to renegotiate credit and payment terms with major creditors and aircraft lessors in advance to reduce the amount of time spent in bankruptcy.
Bondholders have already granted the company two extensions this year on overdue payments for equipment bonds used to acquire aircraft.
Atlas, which operates 40 B747 freighters, Friday reported unaudited financial reports for the third quarter ended Sept. 30 and the first nine months of the year. The Purchase, N.Y.-based cargo airline said it lost $19.8 million in the quarter and $81 million for the first three quarters.
Atlas Air said it will have to renegotiate previous debt restructuring agreements because the company did not meet financial projections on which they were based and subsequently modified its business plan.
The company attributed decreased revenue to lower than anticipated military charter activity; the termination by the company of a dedicated carriage contract, or wet lease; lower than expected scheduled service revenue due to an industry wide delay in seasonal peak demand; and higher than projected fuel prices.
Under the new business plan, Atlas expects to save $28 million in 2004 and $23.2 million, reduce the size of its fleet, decrease scheduled service to eliminate non-profitable routes and reduce lease payments for its aircraft.