DHL Express has renewed its aircraft operating lease with Air Transport Services Group for six years and added two all-cargo jets for the contractor to fly on its behalf.
ATSG (NASDAQ: ATSG) said Tuesday it has signed a lease extension with the express carrier’s in-house airline for five Boeing 767-300 aircraft through April 2028, as well as a separate contract under which subsidiary ABX Air will provide crew, maintenance and insurance (CMI) to operate the aircraft.
DHL also expanded its CMI agreement to include two more 767 freighters for its U.S. domestic network. ATSG currently leases out eight of the 10 aircraft ABX Air operates for DHL.
DHL (DXE: DPW) agreed in May 2021 to lease four more 767 freighters from ATSG subsidiary Cargo Aircraft Management. One of them was delivered last year and the other three are scheduled for delivery in 2022, with two of them to be operated under the CMI agreement. After the three remaining lease deliveries, ATSG will operate 12 of the medium-size cargo jets, 10 of which it owns, for DHL plus two owned by by DHL. It also is supplying an additional five aircraft, which are operated by other carriers in DHL’s Middle East network (3) and in the U.K. (2) for a total of 15 aircraft under dry lease and 17 under the service contract.
ATSG, of Wilmington, Ohio, leases assets to airlines and other customers and separately offers services such as crewing, or logistics and repairs. That business model is different from the traditional aircraft, crew, maintenance and insurance in which the aircraft and the flying are bundled together in a long-term contract. In either case, flight time is billed in block hours for the amount of time operated.
Last September, DHL renewed its contract with another transportation partner, Atlas Air (NASDAQ: AAWW), to continue flying 20 large freighters in its network.
DHL, along with the rest of the express delivery industry, is experiencing unprecedented growth in cross-border e-commerce shipments. The ATSG deal ensures continued access to capacity even as the company works to augment its fleet with new production and converted freighters.
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