Atlas Air Worldwide (AAWW) 12 Nov 172017 Q3 Earnings call transcript

Company Profile

Participants

Edward McGarvey	VP and Treasurer
William Flynn	CEO and President
Spencer Schwartz	Executive VP and CFO
Bob Labick	CJS Securities
Helane Becker	Cowen and Company
Jack Atkins	Stephens Inc.
David Ross	Stifel, Nicolaus
Kevin Sterling	Seaport Global Securities
Stephen O'Hara	Sidoti & Company
Scott Group	Wolfe Research
David Campbell	Thompson, Davis & Company
Christopher Stathoulopoulos	SFG

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Sarah and I will be your conference operator today. At this time I would like to welcome everyone to the Third Quarter 2017 Earnings Call for Atlas Air Worldwide. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. you. Thank Instructions] [Operator may conference. you begin Air, your Atlas

Edward McGarvey

call Thank Ed Worldwide. McGarvey, and Chief good Executive call. Welcome Flynn, Spencer by I Financial am morning, everyone. Officer. Today's conference Treasurer results our our Officer; quarter you, be our third hosted Bill Sarah, to XXXX will Schwartz, for Chief and Atlas Air

As viewed at be presentation that a reminder, can today's call is complimented by a slide atlasair.com.

of the the by clicking on link investor You information find in section the slides may site. to the presentations

on includes indicated like meaning uncertainties. remind statements they As relate Litigation two, slide to statements future the the These Securities to you we'd and about involve discussion events Reform risks company's that XXXX. expectations Act of within some and our the Private performance of today forward-looking and

differ or materially those results statements. projected forward-looking actual actions in from any Our may

references our release For please SEC amended supplemented information the GAAP by business, our XX-K press are today's in meant reconciled insights refer Appendix with and in to Any non-GAAP related risk slides. filed as factors attached XXXX Form to to provide is or to today's about subsequently that meaningful and measures are to our reports.

atlasair.com. You these find at can also

we'd this queue, to over questions and your answer Bill call happy the three be like point ask During question question period we'd to I'd our as participants we've to After may At through to time participants one possible. that today question accommodate to to the gone we and like turn and any slide permits. attention themselves so to additional limit as follow-up Flynn. answer principal one as many draw

William Flynn

you, Ed, and Thank morning, good everyone.

our an and Growth the contribution reflecting air the saw of for the the freight bright. expansion segments will believe are in direct grew and of services. ecommerce is during strong carry for the aircraft continued and Asian volumes on year into as We And further Revenues Asia and the trade and quarter grew as business. growing growth in balance goods. third economy. increased our Atlas also the disposable for demand and good the faster future and for in each strong our transforming momentum Yield utilization quarter. class in of Our focus middle we global positioned Increased for consumptions beyond. business through us express income well XXXX as strategic global of future support this a markets, significantly our

quarter direct aircraft increase segments. hours, earnings to revenue, Moving contribution XX% higher XX% block reflected increase third all utilization in and of in slide enhanced and yields our in our four, a higher

In addition, we placed and seventh began XXX-XXX aircraft Amazon. operating our for

quarter, we that our XXX-XXX Kong DHL for And year for introduced during flying to this flying Cumulatively We Forwarding placement ramp and and freighter routes and XX and new Amazon Global Air in second Nippon Hong commenced X XXXX. Cargo. a Complementing by full the this October aircraft XXXX. the growth track XX on we also remain XX in for we of to up we Asian ACMI will Aircraft end started customers Airlines. X, two added have in enjoy operating Cargo

press labor expense, and we that related Irma third of disruptions by hurricanes release As in our quarter higher was noted in today, Harvey. offset maintenance performance and the some

aid airline, employees efforts Island to provided tonnes donated areas Blue, efforts. humanitarian five, the Rico the Houston to and aircraft. fellow donations in Hurricane our pilots, and to slide for we recent the In on noted XXX local affected of relief October Maria following Jet Puerto York we In other to for hurricanes. on As affected and well and partnered as in recovery by relief the we with deliver our New communities charitable families to their pleased provide we support are assistance as September Miami

on charters our Air with relief hurricane provide. framework and growth speed our highlights can only for multiple behalf operated Slide the air six also customers of freight XXXX. that Atlas We

forward looking are Reflecting our anticipate to season Both and that year-to-date fourth results quarter our quarter. peak fourth strong expectations, and We and are we yields a volumes. experiencing our solid we customers from full percentage our XXXX operations with of to continuing adjusted single-digit a XXXX of our grow year $XXX income by net will low adjusted million. net income high double-digit taxes compared net

in expense million. we be with $XXX million Charter. XXXX year hours block should ACMI in and is about compared expected total $XXX the depreciation XXXX expect Aircraft to full XX% total and with approximately the and XX% approximately maintenance to in increase about For balance amortization

like are exclude which expenditures, point, capital $XX to parts this our purchases, At for I fleet. your mainly questions. Spencer? total would additional some core approximately have aircraft engine and third for After provide detail to quarter I'll our and and to take be addition, expected additional about Spencer comments In we'll million, ask to results. Spencer happy then some $XX million to components

Spencer Schwartz

everyone. hello, and Bill, Thanks,

income highlighted totaled basis continuing are operations, of million. slide On $XX.X seven. results from an quarter third Our on taxes adjusted net

As results increases and direct from loss reflected revenue segments. increase in million adjusted loss continuing a of third of the $XX.X an operations quarter. in price of and reported stock block net due hours the was all Hurricanes announced million to Harvey. $X.X Irma contribution Bill in by related On higher to to warrants, our in $XX.X million caused related the noted, our which reported income and included a during unrealized impact quarter Both our robust and basis we an

to of outstanding On an effective tax Our pay placed until XXXX aircraft we changes federal do due warrants. expense not the of into expect Based tax our and had in we during framework principally significant of the included of rate to was on basis approximately current adjusted an later. that adjusted effective service, that non-taxable value income third quarter the a continue reported and purchased rate quarter and any the we've or earnings tax income and tax tax XX.X% XX.X% we in a income anticipate to XX%. year the rate full

XXX in flying growth increase revenue an and Amazon, Cargo segment Cargo by Forwarding, primarily flying for Airlines, eight, known Cathay higher as ACMI was which XXX-XXX the Pacific Suparna slide Airlines, Nippon for aircraft our DHL were and reflected Asiana quarter Volumes block third for ACMI prices Average an cargo higher Global XXX-X at greater rates charter formerly our had customers Airlines. Charter utilization. primarily flights the in Charter flying CMI no increase volumes were River and hour increase yields. purchased of driven primarily commercial an in on we in by impact in the Yangtze from quarter ACMI capacity and that higher fuel block reflected in reflected third flying. revenues hours, rates. associated Rates Higher driven Looking segment

flying maintenance increase to to of The nine, $XX improvement quarter in the in maintenance greater XXXX. nearly higher ACMI Charter higher utilization, slide ACMI totaled partially contribution costs. XXX-X yields reflected to contribution redeployment increase the an the partially related by in $XX offset to by costs in Moving primarily million aircraft segment an during was primarily commercial due third million compared in period and offset aircraft with segment. the earnings

which seeking injunction. In and service addition, ACMI interruptions segment for preliminary are by slowdowns contribution impacted in Charter a work negatively both and we was

to primarily Dry We the segment debt expect reflected XXX aircraft. related on the In during aircraft higher interest repayment a month. expense the Leasing later a of placement XXX quarter and ruling reduction in this of contribution

equivalents, months million. XXXX of balance cash the first investments XX with slide cash and our nine we totaling and ended sheet, restricted including to cash Turning short-term $XXX

of million nine Our first cash provided operating primarily $XXX offset In engine the months of XXX-XXX three activities financing the partially cash the spare kits jet cash by raised proceeds $XX and financing and convertible during and investing financings and on included capital investing cash completed activities activities. payments and for XXth cash our modifications flight the at million and of partially October nine September offset used additional $XXX net Net position million reflected from XXX-XXX financings notes equipment aircraft, conversion aircraft, by first million. expenditures. activities, $XXX of related of by to during issuance obligations. for of provided our for we core by upgrade from Net including which payments XXXs, engines acquisition cash used of months debt

interest at of almost by to debt secured majority have rate, aircraft and value in vast the a which which related X.X%, is weighted our is is rate assets, all low Our fixed a average debt. excess has their that a now down of

remain to a XX, committed sheet our strong fleet. maintaining we to growing slide balance while Moving

As prior anticipated, our with net third end of the leverage the ratio consistent quarter at quarter. fairly stayed the

we gradually Looking higher expect place more and to generate it forward, service as in aircraft begin substantially time EBITDAR. over to we increase

back turn Now, it Bill. to I'd like to

William Flynn

Thank you, Spencer.

in business our XX, all encouraged underscore performance the direct slide continuing. opening quarter. to Revenues, my our initiatives our to I'd The in We're momentum grew Moving volumes and segments comments. contribution by the during third is of quarter. like from

growth on With ecommerce through us aircraft, the company and the Sarah, and please? and strategic growing we our XXXX focus and demand that, business into Asian and as Growth year which express, our our the global have reflected further for of freight the is transforming services. markets may the So the bright. Asia for did carry question position balance is faster first this air we economy beyond. yields utilization strong our for The in of future for

Operator

line Certainly, the first Labick, ahead. of CJS from go your Please question Bob Securities. comes

Bob Labick

morning. Good

William Flynn

Bob. Hey,

Bob Labick

a change outlook to Obviously year. for the quarter I the -- with the quarter's wanted maintenance. start there's been from this last

about amount expenses by million. Can you just would or going higher I just forward maintenance think that think we of the towards what forward? maintenance of is were to of raised things do occurred expectation expecting about pull how you that's shall $XX same going is what kind a next and you year your do talk it to and about have

Spencer Schwartz

Sure, Bob.

to So we maintenance that performed. of a expenses had one-time unplanned this number had quarter be

things Some events. of air wiring, flaps, reverser worked on included the wings, thrust that conditioning, were

work they to you then the performed findings really of is to So and jeopardize once isn't then primarily those until issues due perform need can't work the you safety. the that the were find the cost you and work, known

an fourth little quarter. that a the was and provided today. the the happened bit year really situation an don't into We beginning it There's that new in quarter built bit quarter think we little of that the a framework this in think the impact normal. So the a fourth We that's was quarter. and it is into full of the with issue

Bob Labick

guess don't in obviously discussed A, my just are Thanks. quantify know And impact the in of follow-up Okay, that resolutions talk I about -- terms if helpful. potential talk issues Could some you you of from able outcomes. quarter. and B, to then labor you timing or very I

William Flynn

Bob. I'll take Bill. is This Yes, that.

call and unlawful observed in negotiations. union the would it's here Act violation So essentially of an union is what what Railway we've issue campaign and leverage is we have by gaining with the concerted about Labor contract talked we've in what our about a we

So event, in longer this significant and kind what to has increase in recovery, the calls manifested time observed to we've and time that and sick open which of recover fatigue an of is departure, overtime. a takes itself increase take of an in refusal near makes

preliminary disruption the behaviors the seeking. have negotiations and these the continue injunction cost week. our So though, of in that point we this in we're that's negotiations with pilots. some operational meantime We're In

So we that as haven't well. of for we're impact results, fourth environment guidance that in the considered operation the the our we've framework well well kind the situation, as now we but a in in or number provided is impact, as quarter providing specific third that quarter the as so in quantification indeed provided the of

Bob Labick

Got it.

thank Okay, very you much.

Operator

from comes from of and the Company. question next Helane Your line Cowen Becker

You line open. is

Helane Becker

very you operator. Helane. Hi, Thank it's much,

can that kind maintenance how to don't know impactful pilots -- the I raise second the single-digit of is wondering a updated kind because I is I of had and kind for you stock market low guidance. with are is mean, not but you you're how performing because am to guidance the quarter us just the the through think of that year guidance and am full wondering providing high the -- low just I normally I the obviously you happy pretty -- get load this. is today, double-digit that the guidance If or just So good under walk and but you now midyear

Spencer Schwartz

Sure, Helane, it's Spencer.

year. impact has an so October related So which that obviously We a saw impacts the full we from fourth and fourth Hurricane the and quarter the talked fourth Maria, had quarter labor third certainly during during in then full maintenance, the had the third carries the happened the disruptions issues, quarter hurricane early that that about. as The that on we impact. and has some framework quarter so in through we quarter crew impact year for

framework a the then really good things strong peak weighing of and is a offsetting but those very are that sort on So season. freight course really, air of market

Helane Becker

benefit you iPhone Will from Okay. X the movement?

William Flynn

iPhone in movements. participate the to X going We're

already. are fact, In we

Helane Becker

Okay. said board? confined were in area you And is then, business. that, issues Is the crew is it across Bill, the that I think the it that Charter or to

William Flynn

that, I labor be would think AMC. No, that and disruptions ACMI The don't are Helane. and business I said both the in segments,

Helane Becker

Perfect, not but so clarification. thank for you much okay the

William Flynn

you. Thank

Operator

line Stephens. go Your next Please the ahead Jack question comes Atkins from from of

Jack Atkins

my Hey, guys, good for Thanks questions. taking morning.

William Flynn

Sure, Jack.

Jack Atkins

and this your week. negotiating guess just update to the the or your labor give ask this on stand I to negotiations be us a we I go I will am week reasons you with moment be understandable important that talk if Bill, maybe could for or negotiating it's but and think guessing you're you back to about of in Could negotiated an going front I pilots? question. the all sort So this you teams for hesitant have think where you're to said

be us update us a a in is impact all looks there the in just could we time on labor terms terms contract? pilots? revised rough agreement could of sort like give about you your new what we from So P&L how that with some you all give an think see should can the framework when of And you line of thinking

William Flynn

Sure.

been framework with been time back period year -- agreement reached we protocol we're our this for recommence began June I negotiating under October in of protocol the some that of discussions with or we XXXX. with our in we've that to a about framework think talking pilots and of agreement and So we that pilots a pilots commence or negotiating have back

the now collective now, know, And table is I so at we're some and, for at June time as think bargaining. the since been table. this We've you

parties negotiating, in Jack, large parties both joint new a table a is are faith to and time. a the of contract collective joint also collective what negotiate same good so this bargaining agreement both with agreement articles. And the bargaining and collective number at the so integrating we're And at bargaining it's have we're other into agreement

agreement not So the a able at not that's position going when what and some provide be. point time to of am concluded I cost that might today, Jack. a to impact say economic that this in place to take be that to in be We're agreement really might or really and just perspective

Jack Atkins

talked though. No like that's raised taking understandable, but Bill. you way if have this guidance, the that's the least it And certainly hour or am I morning increased which appreciate block that about then iPhone at X it. just your you just additional you could, was expectations I that color peak seems given the updated season

sort freight updated three XXXX? through how perhaps could and season into peak move last you your viewing maybe market the months talk at ago as today we So versus time you expectations of the air what, you're trends

William Flynn

Sure.

provide market and charter that's our that kilo, were of we're customers that perspective. experiencing. talking are what's our Jack, own to our they kind believes to think customers of the operations strong earnings think very So of both and in peak. quite range, behalf at that to about number yields think what And provide, market their publicly I they're yields and a asking firmly market strong so peak of what earnings our well and seeing I on so playing perspectives as very we strong of season That's in and are just peak in terms started is the in and quarter of just market kind Charter growth trends in for call seen our about that schedule And, clearly of we're July $X.XX month you we or month a month open out. operate the have after know them that us second my well. after as even volumes and really 'XX we this XXX, that, great in you a demand, seeing going listen you calls if this strong is and which from and what's look average a be available in own know, we've That's

into every kind what everything Will our market of and nearing strong on for of month us does how the strong to grow telling into doing. XX So us and I know next We've don't now very getting double-digits single-digit to these very, are seeing customers months? but growth, many question. high another because months that expect see we year-over-year a now strong growth comparables, you're strong XXXX carry that we going still months and that's prepare tells we're double-digit in very for today a growth XX we're is had in XXXX very XXXX.

Jack Atkins

Bill, great. to that look talking to and commentary for thanks I'll soon. forward Okay you

William Flynn

see we'll soon. you Yes

Operator

the comes David Your next Stifel. from question line from of Ross

open. line Your is

David Ross

morning, gentlemen. Good

William Flynn

Good morning, Dave.

David Ross

labor wrap the this issue granted Can is the not be month? to just and real on near-term if what hope if ruling is up talk you that's the injunction would impact the quick just or impact requested? later the business about granted the the What as is injunction expected

William Flynn

Sure.

you of Labor as context, the negotiate both for operations in That's broad timely has a there's while insure harm contract Railway going and inconvenience and no essential that's faith on no obligations to know, primary on and the agreement to the terms and a may Labor a Act union Act. reach to couple Railway components new key company David, to on of the that is good or the one disruptions the the public. to of so parties, So the obligation parties the

disrupt the maintain earlier, as observed so status of in by we've violations not the seen their violations quo, while we're I contract union status mentioned negotiations. quo of to we've operations and And and obligations the

those or I court as concluded in last earlier preliminary month. the the ruling the of we've this and, hearings expect mentioned that's that And Spencer sought a were we injunction judge from week essence might the later call, and have so in

going the the status we're provides, change what number to a expect to or see that's preliminary us without of the status And the which injunction. on provide or behalf going ruling to do that going way and is remedies preliminary the continue the are in is the predict so quo to forward. Whether we group the without status with available observance to of not With quo that and injunction ruling, respects our behavior go. of to quo, behavior point compel regs law the to without our a to with the seek the compel and to or law we're going the behavior

David Ross

it or that's a And you over of about you there? over helpful. come and Okay, the Asia in -- come in more customers deployment you do types? the then more the talking there. speaking, expect strategic business the mentioned are that's Xs just about plane focus moving from you more going about on types Where Do or comments plane your other to to broadly XXXs to mainly markets into of Dash terms growth

William Flynn

great a that's question. Sure,

in comments it's a with River operations, Global the signed focused. So with Forwarding, agreements And to Those DGF, cargo. the provide company yes the aircraft across XX or it's DHL talked just be both our new building deploy or in types, intercontinental, the so placements long That's at and XXX-Xs More us folks, we've centric is DHL. with them fleet talked and that Asia at the about aircraft as time we've as to grown the ACMI we've haul all aircraft capture and call Kong Asia were ACMI we used growth and as are that's of up expect variant as Yangtze with well XXX-XXXs knows which had The last the to our able and Asiana, CMI now new the Airlines. my about and are two the I and primary. services XXX-X But on in and aircraft customers while operation. have which Aircraft placed of all aircraft It's other Air Cathay around that remind we've that there's in and broadly terms It's but out growth same one of and we've and Atlas and Suparna, NCA. world to called agreements CMI continued XXX Spencer the we Hong interest both continue for year Cargo our growth XXX prior to our provide mentioned combination in the but a growth do. and that. disruptions XXX of we're

David Ross

XXs, mainly But the the within and Okay. XXs correct?

William Flynn

X would are North XXX for talked America so so an not been focused. be are there ongoing aircraft about would believe -- XX XXs certainly there we mostly would out let have and other that Well, are opportunities The XXs within the about. and I XXX we discussions our I in -- well. be there's Asia which ruling there have opportunity operations that as am the southern, types, be me, last long-haul

David Ross

Excellent, thank you.

William Flynn

Thanks, David.

Operator

comes the ahead. Securities. question of next go Kevin Seaport Your Sterling Please Global from from line

Kevin Sterling

Thank you. Good morning gentlemen.

William Flynn

Hi, Kevin.

Kevin Sterling

pilots maybe guess a is of Bill, of in so additional mistaken the am the I you a and so it, don't progressing have and XXXX? on more Hey, and matter are not for bringing if labor guys are you remedying overtime the issues so pilots issue that terms overwork of it how way you I hiring part

William Flynn

for us our goal a the negotiate I is so we're is going talking clarify. really the to I appreciate to union What the get achieve Kevin. for day in That's new contract airline we they issues our what pilots. going do we pilots faith. have I about but union's not without not and to successful. good mean the and question, at are. thanks the our We're customers the We're important with for here be Yes for have our end to do end obviously think to the of and and what we company and what it's that the campaign far an been results

overall the for hiring hiring ramp in a to brought pilots have and company to operating up been for operations, Now, XXXs we certainly pilots, ramp last operation increase we Amazon in more company. the pilots the into the for specifically years the up hiring of to several over your tempo hiring as pilots questions, number

And the peak so and call on as we're the required work demand we of that overtime part that's in reflected earnings that today. a time, force lower period hired in we in we it, to framework open the ensure provided with we've to reliance or have the that meet

Kevin Sterling

maybe obviously think And bigger the question the of thanks. added opportunities guys you new horizon, customers. Okay, kind a some you picture as on here, about

If You from getting forward kind more maybe went is through maybe light you is those opportunities but most a hey, where as having that both are you customers you I'm customers to are think are it about today combination existing years, the some and like shed new arrangement? and looking it's a see look customers? for or out the ACMI calls getting additional of maybe your from or new about the some you next thinking of maybe of on discussions you existing being or you're or couple it ACMI non-traditional from going but coming I'm calls CMI opportunity and you could sure leasing customers lift

William Flynn

freight that are had few customers are is with with based over the and having really they with against bright make exciting we're for our and existing all this existing. few we've we own our customers believe customers answer believe they point, we as your through express develop the quite the on the simply well and and as Amazon. on I growth to and future that and air added the Well, based enjoying on minutes Sure. new is we market to market and right? both, We've based expansion new growth both ago that believe went but growth the customers, backdrop with the our we're statistics of conversations I that information the comment a good we have and

by a for for forward, to major to new way fixed two DGF so exciting contract another another new see putting purchase not it's in dedicated new years. for and flying global on -- on with but it's we've levels a work DGF's of of forwarder for And example really or capacity, been and number new Panalpina in like it's completely aircraft ACMI dedicated

the our the underlying we is impact to customers. class global for of ecommerce, higher drive and think So demand of growth to consumption that's rising going dramatically rates for about and of middle us in continue favor impact and increasing and this

Kevin Sterling

this so how back seems fair few dedicated from seems kind chains you but for lot like need about it main away I swung, and up. a main of the like due guess vogue now the seems today you are has years Is is Yes, may speed supply that freighters in to assessment that of from it a speed it growth a the of if as of how see everybody market like today? dedicated was pendulum freighters like and it could capacity take ago seemed that will talk belly all

William Flynn

great a that's assessment, Yes Kevin.

to discussions sunset and X going was That's for going to Asia hasn't. bellies were the We're to of that's so capacity. way XXXs San the call change go from to not and Shion really higher The of kind that for the XXXs, flows. the still growth now that our Shanghai to And to it that San freighters. not of change. in Freight predominantly out and freight that going going through was in nature moves not we our logic of flows. the kind view but belly it about XXXs number a a we're a then with XXX. do nominal into trade interested go So All going ago about design Phoenix flying. is to to and to fundamentally cargo for long and the of the freight view new parties of having freighters Francisco of law wasn't are passenger Shion today Xs and reasons kind triple as investors not Shanghai, aircraft capacity hub; large Francisco, numbers. major Phoenix opposed That's coming to and market with The lanes of half half point-to-point freighters, of more

agree with point. in established yes, well So, market. Freighters are I the your

push they're bellies. flows integrated. other. the They're going not freight other the going to to and one growth air forward to essential freight going So contribution aside. It's both markets and are both versus be important are not both make disintermediate important and both that and complementary one to It's in or is are but their appropriate and have the

Kevin Sterling

you, additional color got appreciate time today Well, Thanks your and lot. okay. No really provided. the a

William Flynn

line Your Company. of Kevin. next the Steve from & comes from question Operator Thank you, O'Hara Sidoti

open. Your line is

Stephen O'Hara

morning. good Hi,

William Flynn

morning, Steve. Good

Stephen O'Hara

maybe to at are time? talk issues just you within the am of talk I pilot of number you to to lot you there's wondering you Hi, and issues pilots? just shortages guys any issue, the over pilots -- about had are I with passenger hire airlines going Are any rate you like back -- the a mean staffing? and over mean pilot your could I you the about been time pilots in staffed to might the typically hiring need you'd able point current relative have

William Flynn

a question. great that's Yes

talked that because has years look Amazon. and kind and at a done sense so bit we've for and hiring ramping we've of we've and, that the about force pilot the of our grown had considerably growth that in over total as we've quite amount So work of several the aircraft makes added up last

the few them Amazon. we deploying the to of of are For and we the through training We've hired decision top in might managerial work take example, of perspective that a XXXX called process our there And going the have, operations. into managerial perhaps that more of deploy risk or number we was ordered the so that open behaviors singing pilots because group, that to 'XX a our large number did aircraft already a what's right we bit would day-to-day in of on increase got have nine or hired in hire could we way so to each hire we because and of to the was a in them otherwise hired than pilots force. we large have past. the the the the we've made deploy in for get to to when we right? that taking operational on We were the our pilots than get can't our for otherwise experience refusal our service from or XXXX in saw one we cognizance more a the got And what's pilots might decision force required might the work late that here more number customer, were we've resistance have time of hiring

agree it the is. number say I right yes sure but of we have more we we've might I So thing do otherwise some and it pilots, to believe you'll was would certainly than would hired done, am

Stephen O'Hara

Okay.

than normal pilots So, carry number the guess I mean, of I you're carrying right in under maybe you more normal have I but than XXX sound probably terms of operational times. you're too obviously mean carrying you're a circumstances. that increasing you'd the number it you like of need now, pilots more I guess operational under does

William Flynn

because we've and hired otherwise observed we more the number than have and customers. fatigue from right of crews address the our that and desire ensure for Yes we're again, some seen. But additional operations might behavior that have view, short time carrying thing the change notice of sick to reserve notice the that's we've to my the some to point do to late or of

Stephen O'Hara

the maintenance quarter. the in you with then obviously higher the And was agree I maintenance, Yes, much there. just on

there come it were I there had to with You drop other your there expectations, explained pay? guess and any you increase away that would lose that I and the just I maintenance any hit the in or didn't bottom of would mean line. the bottom did line directly fly offsets that mean -- what how revenue where offsets? I think you were come much So as or was in-line didn't other you if majority would were

Spencer Schwartz

Yes, did bottom-line. right happen talked today results Steve, as we and the higher, not we would therefore we If about of The types that yes higher. of not in come that saw generally you're maintenance about the much been was think it flow Maintenance would would we right. higher. have issues majority to expense the have lower, if that talked in came

Stephen O'Hara

looks there and now I I quarter I I but directionally XX% the And like the give typically fourth think amount you in the -- one-time mean look outlook for think year Okay. guys maybe it mean fourth up mean your other is maintenance you don't you then the in XXXX? of a there's I think the that's (inaudible) do how for or projection into it fair leaking like you mean quarter. sounds directionally I

Spencer Schwartz

and maintenance, is We're new Well, incremental as from regard more new is that of things. flying. a for this as provide is maintenance now couple to ad more but I providing we said talked flying about, Bill don't today hoc will should XXXX help oversight lot before, that as of resources. think With our vendors network, a the expenses guidance going we've dedicating customers not We're you to nature flying what and more we're say, normalize predictable our as That of say normal. that placed overall we more well. aircraft with

our talked because typically for and then expense maintenance as that volumes the well. of flying increase be aircraft customer looking all Bill will kind XXXX we're XXXX And The much of it we So that number to we those we forward, of relationship to Amazon XXXX. expect offset expect We're new and accretive in said. to obviously increase growth have looking the Bill and things growth as more so in forward are that about.

Stephen O'Hara

you Okay, very alright. Thank much.

William Flynn

Thank you.

Operator

ahead. of Research. Your next go from Scott the question from Wolfe comes line Group Please

Scott Group

Hey, thanks. guys. Morning

William Flynn

Good morning, Scott.

Scott Group

impact net just you activity quarter? the for hurricane charter were in the benefit just hurricane that the the clarify you impact? guys for or of Can the the Is highlighting cost

Spencer Schwartz

of actual our the out South damage lost flights all Houston. it crew so some We flights to in of days. -- facilities in Sure, We Scott, then had We the We those cancel some taxes. numerous and to cost of had had to hurricanes. flights, some to Miami of costs together cancel there of net so was anyway passenger things America. related put were it's kind

Scott Group

do talked charter you increased offset activity how was by much the then idea of you And that rough any of have about for hurricanes? the

Spencer Schwartz

really lot amount charge and flying the a charter opposed the service did activity we a increased wasn't to Well, contributed for. there revenue fair we as hurricanes of of

the to the addition Pacific Our We lost and committed elsewhere. flying charter our charter in in peak aircraft in to Trans market operations. and largely were

charter America. large South operations in have We

which And needs perishable, Charter is so to revenue shelf some a life or because flowers it's and so fresh delayed had lot of fish get northbound two three fruit, and discarded it's lost we there. lift that days shipping, in

we've we As some talked revenue. Charter about, operated

of to so We that's think Company. fair the of net substantial the in revenue American a I operations representation a amount South also Charter the lost

Scott Group

Okay, helpful.

your the the of year an just hours you split think block this maybe next calendar what XX months? and military in think you kind of over team I quarter. kind us resets military means every team do update and Can split within on fourth give for your the

William Flynn

you're well Scott. right, Yes

X AMC entitlement about same us year. it our or a point course fiscal XX% activity guided terms expect FYXX from Of on operates of kind then as military into FYXX year activity, view FYXX. up in of team up to prior Mobility a and in levels year Command coming fiscal the new XX% as and and experienced essentially participation And will is we've our of beyond. that fiscal so a that to a and to -- of percentage Air entitlement we're year in view, of the we're October from kind points, the be team as a within similar point one is of From entitlement in few so point from

Scott Group

one Okay, And ask very if I just Bill. more, helpful. could

air a cash more don't you're free next could good environment, going year? So you flow. be to strong really do aircraft aircraft acquired think Obviously obviously if be some acquiring freight you

do year? about less next aircraft you so so, acquire aircraft If just acquisition obviously are you how thinking

William Flynn

fleet QX not I in added leased last we the into call that call. the Yes XXXs talked think the in and we've if or we've about QX the so that

if decision backed on XXs… On term to if in in and So be business solid that we business going -- case have certainly a would that wide would in, supported out bodies, go of us the our in going case particularly the aircraft terms opportunity to aircraft lease. for lease forward more to and and match that there by is view we want opportunities are with large perspective our bring the a is be and

Scott Group

So the that's a sorry. -- go change in ahead,

William Flynn

sorry. Go you no, ahead, question, ask

Scott Group

of That's a way acquisitions of cash is are about that right? of thinking and instead the in change planes guys leasing you in terms

William Flynn

we aircraft. type the and lessee about lease acquire mindful the of we've balance lease is as markets, and than from opportunities in on aircraft Yes we've that. it I mean obviously acted several see of and our attractive is a bit the of leverage a lease talked of that change for to rather the view sheet market and point aircraft

Spencer Schwartz

cash It's tomorrow. flow and today positive

Scott Group

guys. thank it. Okay, you Appreciate

William Flynn

Thanks, Scott.

Operator

question Campbell the Your next from & of go ahead. from Thompson, Please comes David line Davis Company.

David Campbell

be may you saw what like today We they morning didn't and cited have do for they carrying freight all good you read them up might am don't demand I that XX%, earlier of freight IATA months reported so they they it you sure slowdown, and from your do sound up I any in September's continue. Yes, a air slowdown when the slowdown Bill, air X% think? tonnage everybody. cargo all discussion know how but world's carry previous less XX% but what said versus been it

William Flynn

starting now and And the been have we're to September predicting very growth a volumes. then to last of a rates I and months year only double-digit capture out, number of on and XX a last top some slowdown earlier carriers or was and of go thing think of you for express been right? or choose I put I back other month the capture for if has response. go of or member see I and to months slowdown talked I I'll and about a we've express read think in September we're XX% XX chart it and every express the that I'm little that X% end so Whether don't And have double-digit made in market. growth. a it all XX of traded it's as report months months express had still each X% when you majority on so with growth those don't where it X% an growth in in think last freight months. the and well IATA They look pointed going ecommerce before. if read every the are air IATA volumes exceptional was freight, or all facetious high I'll believe right. the was positioned it's IATA gets serious, -- there's air my that they I what started it's in the heavy Well, be certainly out I for just freight they'll the comment year back airlines real the in is David, a at publicly has that, major that

had they're think conversation or too with missing much -- that and I've I IATA.

David Campbell

wanted Well, what's you hear I going I you agree. feel it. know really I just don't because it on on. going to say know you what's but

see you work. You for see you Thank thank and and demand much the your hard very don't your it; appreciate I comments you.

William Flynn

you, David. Thank

Operator

the from [Operator Christopher of line Instructions] question SFG. Stathoulopoulos comes Your next from

Your line is open.

Christopher Stathoulopoulos

make understand. to want just I question. my taking for I thanks Morning, sure

guidance? you in the is the your reflecting staffing any that that You address month additional expected and shortfall to place plans said have productivity of independent this ruling pilot revised

William Flynn

year. board talking full level staffing's year first Chris, in quarter framework, all fourth the of on hiring instance, the we're framework quarter fourth operations and the we've yes the and and because we about that So have been

hiring. now we've and open the time overtime time some to been take and For we've observed refusal

it's in We've your straight that's and overtime overtime work than model more, framework. one address clearly the what hire adjusting talk as time Our time to that's of the and It's some did. of I the net, has considered activity planning a for one is about, your hiring that mix that right? ways adjusting of we and force and -- component adjusted to straight more in

Christopher Stathoulopoulos

saying the APA in the Section or has footprint it's was time X around curious, just put going in saying back there the when perhaps think began way for having after but then debate gone an the injunction seems this of that and sent some court been docs why filed notice place up with even several XQ And be had year slowdown network your of earlier? some to it changed Okay. similar study Spirit that the showing goes XXXX of is was because order through pilot actually a this early to and the wasn't what years in on really the if restraining I

William Flynn

by that acquisition February in we view stated the we XXXX documents of our the union that on our of we actions under union the began be court when believe about in are there about importantly, new Air identical Coincidentally airline. the contract a for bargaining we language specific the a and but what happens what very joint our advised of another merger. happens acquire of about verbatim we when agreement Southern literally terms terms concerted the or what the So collective Southern when in that contract contract has almost would there's negotiating

the and to view. is -- a that that but action when terms our those case be It there's when contract. Exhibits between February after begins communications so under advised agreement activity and union lag our the and its our union presented to XXXX get that's That's what collective assertion in the the and communications conditions in our we would that point bargaining time And court joint back concerted a in in that's the indeed in testimony. negotiating if start what's we began we

Christopher Stathoulopoulos

up shaping strong Okay. Amazon what's into to the service And sensitive season? and response, customers go a looking especially like been DHL, it's for what's particularly customer as peak we like be

William Flynn

not all Well, I they're saying be sensitive what all cute. mean sell is customers I service sell that's that service. am and we to we service our are sensitive

-- closely about exactly the we with know closely have So we've negotiations. pilots, in them and kept They the our operations contract discussions are our about we and informed know. they customers kept informed where

of different very our also customers view as to preliminary air ultimately other and Our the hand including the the services. injunction buyers are remedies on and savvy freight

have we disruptions of deliver customers. their nature Labor think to and service of the own very negotiations they industry the kind of the bargaining, expect our and and their they you Railway and the status managing have we're are business We're to understand our if customers will, own I managing with they where delivering well. us pattern promises but the to the their They to they we they pilots. and understand perform. Act are airline And understand

Christopher Stathoulopoulos

address you you mentioned reason whatever to things if to where literal on are can know rules pilots peak for the take XQ time the procedures" I to to the drags and "work the some shortfall union labor they open but of and very situation do to season? productivity during bringing the on additional pilot the approach the decides what address a

William Flynn

call with the least and been think I the negotiating indirectly. on we've getting into here, at union that's negotiations almost

and the and in clear duties the Act about better is union. both believe obligations Labor the on within place it I as to and way the the parties, think think as establishes company Railway with well we to the I And rights customers business, manage that's our of be and take that growth law us and the the in context serve regulations advantage able our market. to out there will available

Christopher Stathoulopoulos

did the for you give ex core yields the Okay. Last fuel Charter one, quarter? commercial

William Flynn

that days. in and No include about and saw what them tell you're our but asking few are those fuel went up rates fuel rates last surcharge all fuel the in you we that perhaps generally fuel mechanisms all I Charter have can contracts inclusive and

Christopher Stathoulopoulos

okay. Understood,

Spencer Schwartz

I'll throughout all of just fuel Spencer. you year. that the cargo commercial it's have ahead yields if Chris, add XXXX XXXX exclude been in throughout yields

Christopher Stathoulopoulos

block number? ACMI in the question, last what above was terms And flying the minimums? that trend Okay. hour customers of about What

Spencer Schwartz

quarter. Sure, quarter a third very it the so during was strong

That Our year customers year. XX% X% of over was that. above minimum them their to for guarantees for a Last compared above with full be XX% about well customers year to X% above above nearly This expect flew year. last fly levels. minimums. third Typically bit quarter the their the we typical little

Operator

last of ahead. Global from Kevin Sterling Your from Seaport Please Securities. line go question comes the

Kevin Sterling

about got was above so to the that answered. I the minimum percent going ask question

William Flynn

Thanks, Kevin.

Operator

There are I'll you. time. no over turn further it questions Air, Atlas to back at this

William Flynn

look us of speaking Spencer that your questions we our Air, thank you again with operator. for we you, again, I Company, time and thank all interest your soon. forward you, once certainly you Atlas Sarah. and Well, And you Thank the to to would with and shared like today and in appreciate

Operator

today's call. conference concludes This

may now disconnect. You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.