Raises Adjusted EBITDA Guidance for 2020 to $490 Million
Air Transport Services Group, Inc. the leading provider of medium wide-body aircraft leasing, contracted air transportation and related services, today reported consolidated financial results for the quarter and nine months ended September 30, 2020.
Freighter lessor and operator ATSG saw revenues and profits increase in the third quarter of this year, partly due to its quarterly record of seven Boeing 767 freighter deployments to its leasing customers.
In the third quarter of this year, the Wilmington-headquartered company reported a 10% year-on-year increase in revenues to $404.1m and a 15% year-on-year increase in adjusted Ebitda (earnings before interest, taxes, depreciation, and amortisation) to $125.5m.
Rich Corrado, president and chief executive officer of ATSG, said: “In the third quarter, ATSG’s businesses continued to deliver better than expected results, aided by a quarterly record seven deployments of 767 freighter aircraft to its aircraft leasing customers, and by seizing opportunities for charter and cargo ACMI operations to supplement the capacity of our customers.
These opportunities helped to offset pandemic-driven year-over-year declines in commercial passenger and Boeing 757 combi operations at two of our airlines. We will achieve our goal of delivering a record twelve 767-300 freighters in 2020 to external customers, including four in the fourth quarter, while also re-leasing three 767-200s to customers in Kenya, Malaysia and Mexico.”
Looking at its different divisions, Cargo Aircraft Management (CAM) saw revenues for the third quarter 2020 increase by 7% and pre-tax segment earnings increased by 13.5% a year earlier to $19.8m.
The company said revenues increased primarily from eleven more converted 767-300 freighters in service, compared with September 30, 2019.
ATSG’s ACMI business saw revenues increase 10% to $1.1bn, due to incremental charter assignments for Omni Air International from the federal government and expanded flying for package delivery networks.
Meanwhile, the division’s pre-tax earnings were up 325% to $18.6m.
“Principal factors were lower than expected aircraft and engine maintenance expenses, reduced travel costs for positioning flight crews, lower ramp-up expenses versus those associated with last year’s expansion of Amazon’s air network,” the company said.
Looking forward and taking the effects of the pandemic into consideration, ATSG said it expects adjusted Ebitda for full-year 2020 to be approximately $490m.
Corrado added:“This new adjusted Ebitda projection reflects ATSG’s current assumptions about the level and duration of pandemic impacts during the fourth quarter including opportunities to mitigate those effects, and the outlook for ad-hoc cargo aircraft operations during the holiday peak season,” the company explained.
“We expect another record year for cargo aircraft leasing in 2021, given an order book that already calls for us to modify and dry-lease at least fifteen more 767 freighters, while re-deploying others to new customers. We are also hopeful that demand from Omni’s commercial passenger charter customers resumes in early 2021.”
