AIRCRAFT lessor atsg reported a loss in the third quarter of the year as block hours decreased and costs increased.
The company, which is in the process of being bought by investment firm Stonepeak for US$3.1 billion, saw revenues decline by 9.9 per cent to $471.3 million, operating income was down 52.9 per cent to $21.7 million and it swung to a net loss of $3.3 million compared with a profit of $17.2 million last year.
The loss primarily came from its aircraft, crew, maintenance and insurance (ACMI) division, which reported a pre-tax loss of $14 million compared with a profit of $12 million last year. That said, profits at its certified aviation manager (CAM) leasing division were also down on a year ago, dropping 22 per cent to $18 million.
The ACMI segment's pretax loss for the third quarter of 2024 included $4.9m more for customer incentive costs stemming from warrant agreements reached with Amazon in May of 2024.
In addition, cargo block hours were down 7 per cent and revenue block hours were down 13 per cent compared with last year.
ACMI also experienced increased expenses for maintenance, travel and ground services, the company said.
On a more positive note, ACMI began operating seven Amazon-provided Boeing 767-300 aircraft during the quarter, with three more added subsequently.
Mike Berger, chief executive of ATSG, said: 'Our leasing business continued to benefit from strong demand for our freighter aircraft, as we added four Boeing 767-300 freighter leases during the third quarter.
'Our third quarter results were affected by fewer block hours flown than a year ago and higher expenses, including start-up costs to fly ten more aircraft provided by Amazon. I am delighted to report that the 10th aircraft entered operations this week.
'For the quarter, we once again generated strong free cash flow, bringing the total to $193 million for the year. Going forward, certain contractual price increases effective in the fourth quarter position us for strong improvement in our ACMI Services segment and we expect to execute three new leases for CAM-owned freighters by year-end 2024.'
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The company, which is in the process of being bought by investment firm Stonepeak for US$3.1 billion, saw revenues decline by 9.9 per cent to $471.3 million, operating income was down 52.9 per cent to $21.7 million and it swung to a net loss of $3.3 million compared with a profit of $17.2 million last year.
The loss primarily came from its aircraft, crew, maintenance and insurance (ACMI) division, which reported a pre-tax loss of $14 million compared with a profit of $12 million last year. That said, profits at its certified aviation manager (CAM) leasing division were also down on a year ago, dropping 22 per cent to $18 million.
The ACMI segment's pretax loss for the third quarter of 2024 included $4.9m more for customer incentive costs stemming from warrant agreements reached with Amazon in May of 2024.
In addition, cargo block hours were down 7 per cent and revenue block hours were down 13 per cent compared with last year.
ACMI also experienced increased expenses for maintenance, travel and ground services, the company said.
On a more positive note, ACMI began operating seven Amazon-provided Boeing 767-300 aircraft during the quarter, with three more added subsequently.
Mike Berger, chief executive of ATSG, said: 'Our leasing business continued to benefit from strong demand for our freighter aircraft, as we added four Boeing 767-300 freighter leases during the third quarter.
'Our third quarter results were affected by fewer block hours flown than a year ago and higher expenses, including start-up costs to fly ten more aircraft provided by Amazon. I am delighted to report that the 10th aircraft entered operations this week.
'For the quarter, we once again generated strong free cash flow, bringing the total to $193 million for the year. Going forward, certain contractual price increases effective in the fourth quarter position us for strong improvement in our ACMI Services segment and we expect to execute three new leases for CAM-owned freighters by year-end 2024.'
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