AAWW - Earnings call transcript Q1 2021 | Atlas Air Worldwide Holdings Inc.

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Operator

Good day. And thank you for standing by. Welcome to the Atlas Air Worldwide Holdings First Quarter 2021 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. advised, conference be being Please Instructions] that is today's recorded. [Operator to I Air. conference would Instructions] hand now Atlas [Operator speakers, like the our over to go Please ahead.

Ed McGarvey

in you, by, quarter XXXX Ed conference call. everyone. Air Thank will Welcome results good be call for hosted presentation Chief the Worldwide. first Treasurer Dietrich, atlasairworldwide.com, is complemented call Executive Officer. Financial Today's at Atlas section. Officer I'm our to our Information viewed Today's a and Ajay, Investor and that slide Chief under be Spencer John Presentations Schwartz, McGarvey, our morning, can by

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

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

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

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

John Dietrich

friends particularly to by ahead. On encouraged all to regions world days to stay disheartened around our frontline operate are time, and and within the We're their as both and to Yet and thank earnings organizations quarter world our customers to actively the of that at support progress us in Atlas, the with We're prolonged that others recovery vaccines. outside we to We're to and I safe, for protect X,XXX our incredible to dedication precautions frequently same continuing families support. to like you, many employees in behalf hello, their relief for India. again I'd operations, essential also and want in efforts. everyone. stepping more at the our brighter employees be ensure contributions. We first region goods the Thanks, see industry provide to we're responders the hope distribution I workers critical continues all we're towards path and engaged Ed, continue the world, efforts. of take wide-ranging of your thank up needs. the than also that pleased, many of the Welcome able to transport call. to so to and multiple safely

they can customers Atlas airfreight solutions seeing and e-commerce, from even supply we This we and out Advancing have our chain, and that because always conditions. to to innovative business many leveraging capabilities strategic developed part, And a services to PPE on delivering highlighted can team and reporting. speed well to they're in model, medical with chains, at that charter our role express supplies, services for the necessities the for we're demonstrated their operating daily doing pre-pandemic levels. we the perishables, from initiatives to that other on this and flexible global it and market recognize And grow, world. we've expertise. in market on been years and allows goods positioning us of global weren't difficult of capabilities general plays keep the count see need vaccines, the Our This essential more includes, we're Throughout we've now around operating the been play components and manufacturing and We transporting the tonnage born, reliability. work our chosen airfreight to and operating We're They've moving important has At long-term Atlas, market you ever. times provide agreements scale. services their to on and supply through with capitalize they important global diversification, global the Atlas, opportunities unmatched beyond. continues times. pandemic. excellent our pandemic, current And to to certainly high-quality extend capitalize unprecedented moving. enter to into the even supply provide our chain of future, been keep the and These pandemic networks customers critical how brings Atlas than these and continue essential. numerous tirelessly results them committed role in have us in which growth that, unmatched

to reportable we Charter Dry have But them our manage reportable the we likely share Before have businesses Dry to opportunities the change I'll segment. evolution are segments briefly quarter and release of reporting the of we ACMI Many more moment this familiar most business. also Beginning details are use. Charter to and both first change with Spencer now ask and with business We'll you one Airline Leasing. had as we three results, operating to namely next during I'd more to the put analyze discuss new operating Leasing. profitable as segment take previously remarks. to similar, to in review become announced to and ACMI, ensure segment of reflect XXXX, his review that move a current changed and and we our how operations reflects morning. we've our the and slide segments resources our and Operations press our reporting now like This segments the the two our

quarter Now our results turning slide first to on X.

business well above and global typical this as team thank our strength in and well current at to I of our by our environment. are that airfreight driven demand model again of delivering very challenging with safe, on our flexibility seasonal continuing capitalize all levels. environment yields for want high-quality service for was to customers Atlas operating employees the as performance Our the

continue leverage to our global We airfreight network aircraft increased match and significant to demand. utilization

reduction results high first quarter and wide-body the and aircraft extended international yields continued cargo capacity. demand our of and commercial Our customer to for expanded our strong reflect significant belly agreements, services, Charter

by for also throughout customer partially serve XXXX results the costs and our one benefited fleet reintroduced XXX heavy related demand. pay into COVID-XX, May areas higher operating increase expense. freighters certain have that to our from significantly and freighter higher impacted to benefits premium were Our pilots provided pay offset we by XXXX four maintenance that XXX in These to we pilots been the XX%

and bargaining in on reaching closer parties new Turning list. proceeded information provided decision, committed implementing will critical hearing with agreement. joint JCBA. sometime the and now our to we've merger to arbitrator report now our completing new collective the both has briefs to with of we is agreement for pilot pleased Xst half the an with and April pilots a This to expect a to between is We're moved time submit which seniority the render for schedule consider recently the that the concluded on in a all remain The the presented post Atlas after arbitration we on a the agreed binding Air connection union labor company and next The this year. step integrated negotiations, Southern second which Air. item scheduled

XXXX as wide-body to Long-haul in model. of second Now passenger being adjust and prepared well less able This good moving many closed. includes to conditions business and recover are business quarter. capitalize market struggle X. borders continued continue be in We're COVID-XX likely any slow the diversity monitoring to successfully to to aircraft being off slide return start global will countries to on momentum has a closely the and remain and market to seeing as We're flying as our international on very with the leveraging changes. been

increases about levels which air gauge a it's pent-up be of demand less of is any been US what will there's leisure recent for by improved attention and on largely driven to international important impact lot these have normal smaller travel. domestic new important will the Although, impactful traffic, note regional to that recent passenger aircraft, also to be international business pandemic including airfreight. It monitor with travel the beyond been

remain long-haul cargo and strong with With we the on remaining tight. for trade strong to yields airfreight outpacing global capacity airfreight demand anticipate air supply, lanes demand

to hours XX,XXX Looking approximately million of EBITDA of the revenue fly quarter, adjusted second approximately we with to $XXX about $XXX million. expect and block

the in approximately by adjusted adjusted year. $XX.X income with expect million this first of net grow we net addition, quarter In XX% income compared of to

quarter levels, Our but above cargo yields XXXX. high experienced to Charter the remain seasonal below historically the outlook second of yields commercial anticipates typical during

We also and the safety including expect increase expense provide costs continuing provided we to by costs measures to workplace, driven COVID in million. the pilots maintenance the for $XXX our premium May pay the from for second expenses pay our additional approximately pandemic, higher in XXXX, pilots, quarter in of

than aircraft XXXX, expect be totaling to year, and about For lower $XXX million. continue the we with expense maintenance depreciation full to amortization

and approximately and fleet. for projected capital components aircraft million, addition, parts to total million core are In expenditures, our $XXX $XXX purchases, to exclude which engine mainly for

a providing look ask take remarks, the market point other and virus, including we'll a happy quarter quarter on and few COVID in but additional and results our this Given the related providing more then not the segment we first of questions. surges XXXX forward to forward good economic is as look I year to outlook, and for cases globally, providing to Spencer's details be to ongoing and providing outlook after at factors, reporting time, comments progresses. restrictions our variants we updates XX, are your new a provide This second travel to uncertainties and a Spencer? full-year me Spencer

Spencer Schwartz

of On like next we'll past Thank to slide over we've and our you, I'd and first the segment great results. everyone. and change move these then how calls, about blurring have the more I'll prior start and ACMI to quarter the agreements reporting, John, similar between Charter, to earnings years. and lines become talked discuss few and by discussing operations hello the our

businesses, long-term and the a pronounced business ACMI demand. ACMI the services providing expanded long-term amount now Charter XXXX, reduced significantly our flying serves operating aircraft we've long-term on the capabilities both more with Charter similarities streams. ad-hoc percentage that And take basis, customers fixed with contracts, our or including more pay performed Both revenue of grew our the majority us for and we've contracts nature. that's as of business became predictable of of outsourced a under provide As Charter even during

block aircraft exchange fly regularly look capitalize by team they operations, service. destinations hour ACMI staff have to allows between sales, demand or And and whether want, we and the maximize Charter. employees we outstanding by and us As assisting that ACMI a flight activities. customer with customers to from of perspective, both ACMI pay flexibility cargo the to same we and with operating Charter and on the support Charter returns, regardless This of transport

For services, and similar provide we are routes, both airports, for operate goods, responsible fly similar on to ACMI primarily Charter, and similar customers fuel. carry similar

$XXX.X to Now, first X. income reported income a are increased results, adjusted growing slide net On to On with highlighted net totaled our moving adjusted million. million, basis, to $XX.X which million. strong on basis, quarter EBITDA $XX.X an

income effective Our an adjusted first earnings the tax XX.X%. rate included in of quarter

X, services, slide of of growth in by reflected volume strong to increase for top Charter flying, volumes, by the and airline the cargo available totaled was capacity global utilization. Higher the in million supply block and quarter. air primarily freight hour. market, the driven our reduction and CMI Block-hour aircraft significant demand to disruption revenue revenue average per increase driven rate primarily a chains, higher of our Commercial ability in operating operations $XXX.X Moving the the

military of were one is the Revenue In taking items movement partially relatively our the AMC personnel. benefited the military revenue precautionary by dry XXXX, the unchanged. including as XXX. limit measures and from addition, passenger was of to offset XXXs flying freighters that throughout operation five segment US leasing lower segment in These four we activated

higher $XXX.X positive by primarily Looking just were benefiting now million of noted. unchanged. totaled contribution partially Similar at the segment period Leasing the Dry These segment was higher I during heavy first the pilot in operations quarter. Higher was bottom offset and airline the the segment factors to by driven maintenance. contribution revenue benefits contribution revenue also relatively costs slide,

Now turning to slide X.

with We leverage ratio X.X totaling net of end the Our cash, restricted consistent first cash $XXX is XXXX XXXX. quarter year ended at cash million. including with ended and times, quarter the which equivalents

activities, provided primarily XXX-X pre-delivery position proceeds capital the engine, and cash period partially by for modifications used cash from cash and activities. partially, spare debt offset for cash flight Net payments during cash investing Net engines equipment the financing order payments for including as investing financing payments for as Our operating for activities debt XX kits. used for by first core was our used overhauls reflected March activities quarter by at reflected upgrade primarily well offset on during issuance. and obligations, expenditures,

We apply financing. a to continue to disciplined approach

mitigate of coupon which resulted a As by aircraft our the at noted interest has to the liquidity in average by we've of excess rate the which stands We before, the secured committed strategically X.XX%. and low now remain in this And sheet assets majority resources. actions a weighted value enhancing is have costs, or related worsening of a allocating we're and balance to reducing continuation any pandemic impact strong debt. taking

I'd like back to it turn Now John. to

John Dietrich

Spencer. you, Thank

I Moving a X. are continued And to second off business the to good in we're slide XXXX seeing quarter. in very start as mentioned, momentum and

continues to service protect and goods can that continue ensure operator, question employees have this high-quality joint the look our we'll our safe precaution collective our for please. the We our we agreement the to take finalizing and forward to environment, every with capitalize team may new first bargaining team operations we to of current pilots Our to while continue essential delivering around At transport world. airfreight on customers. the point to world-class

Operator

comes [Operator question line Instructions] from first of of Securities. CJS the Bob Labick Your

line Your is open.

Bob Labick

and as well. a morning. attractive Congratulations performance on for very the Good guide QX

John Dietrich

Bob. Thank you,

Bob Labick

contracts? contribution strong half. I in to relates contracted get long-term kind and the, or just half of, of the take-or-pay Hi. recurring kind a nature charter, wanted trying and a much with get to the to start hoc performance -- trying first flying to the spot of, first of sense ad sustainability ACMI how I'm sense versus of

Spencer Schwartz

Sure, Bob.

About was So flying about X% hoc traditional our now or now traditionally, America South in charters. market. XX% is About is X% only the of with about is XX% is what around is ad kind was XX% spot now to XX% what and military, X% long-term ACMI. US flying about in of,

So has flying aircraft. it really business, of is on very and a our dedicated all the small percent so overall a of become approximately XX%

Bob Labick

in up? thinking and And Got -- that of, the the it. information flying just then get the mind much pilot already to year XXXX what since for and kind than for then other the Great. by of you'll your variables so labor looking end locked half second this the second you're are is, with half about that XXXX of pilot costs biggest

Spencer Schwartz

pandemic. course, a Yes. we're middle Really, of of in the

play as good that So on seeing, we in and are might a of Based uncertainties the that there continued feel and airfreight to overall. of what that mean there, related it's team supply/demand, the big really everything yields, lot that we're environment. operational really challenges. our pretty the we know. strength challenges work space about impact those on to uncertainties the plenty Other are operational of are overcome the Those out items. amazing But you that, does there than

John Dietrich

my Yeah. statistics And we're a I IATA the And what and that pretty a related economic comments, closely. related still on going in that, pandemic. said And economy to recovering. which I overall show through out that close Bob continuing. add conditions. economies to we've the with came are watching are about some XXXX, as keeping be lies lot But and to could we're beyond recently if watch pandemic talked also movements, COVID

down. inventory levels are Our

now. to which it's back strength, to manufacturing full to expect get We right not want

pandemic, -- looking beyond keep the are to of and important I'm some eye an an things on. those to the variable So

Bob Labick

very Super. much. Thank you

John Dietrich

Thank you.

Operator

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

is line open. Your

Helane Becker

very Thanks much very Hi the operator. much everybody. you thank And time. for

John Dietrich

Halane. Hi.

Helane Becker

have just couple I a questions. of

you'll And fly you the I you're the years. bunch Dash taking Xs. guess four XX over of about As aircrafts years think or next like, last years, them XX these

this maybe? think XXX-XXXs you older have So isn't you But thinking for of too question the soon. replacement aircraft some to a how about about are maybe

John Dietrich

with we you at And useful a look XXXX it's the to within described Yeah. start is still well life. build. the the And models I'll And are on have if for its remember just XXX-XXX still airplane. that it XXXX, the average great that that that. And to XXX-XXX. important XXX-X you applies the lifeline, still

less I our come. as So we on be years would the of to that productive overtime to to to capability. workhorse, converted, XXXs say as the also loading And in the would retire. be think similar passenger likely there's as the expect will value to -- the XXX range is older have going what pure are And will that payload XXX-X, continue to say freighters the scarcity that overtime some capabilities I mean ones we a to its its likely start comments those by with earliest. I which are ones freighter. retire well nose

about the So future the feel and X. really XXX into this the good XXX we both, Dash

our Now, some XXX as as The a looking XXX aircraft We're great airplane, there. converted that going freighter of But operation. existing Airbus all also we said, XXX fleet other to types. the forward great are with always is fleet the talking out well looking about types. the do to airplanes the there as is at be the and is AXXX. backbone kind of

Helane Becker

other year? Got increase pilots helpful. have your that. of thank you That's pay a last you, I And gave very question for you then, the okay. And is, May in

John Dietrich

Yes.

Helane Becker

a another off, raise this as beginning, want about would and -- see think year-end close just them you're end, went is you're cover pay Would not to year? good you progress that think getting glad because depending year to hopefully before would contract, -- it's on this to it. came maybe so it's this that would holding -- to an you agreement one you're making giving And that how on now encompass or that, an year May this coming

John Dietrich

Helane, arbitrator We're coming to briefs is an end. where we Well, to in within specific coming due. April it's was XX-day hoping of is see pleased us agree there's And arbitration has weeks have the the period. can't to soon coming I you. an to an And that. complete. is There it it And end are completed a question. possible. end. And now as as an large that The on to say coming lot to We're reasonably with this was committed pleased negotiation dates, hearings. And an end. to about time post-hearing two arbitration that record is The I and a we're outcome Xst, a to submitted. get it But

So prevent dialogue union. to there's with from us nothing continuing the

have for of representatives arbitration touch it half Our the specific But a procedure in but long each date, this a pushing that it's happening conclusion, to in in of year. so we've with been result. you second we the to give through can't other we and I been the expect process. the terms bringing expect

Helane Becker

say you the on that heard I call.

Okay. Well, thank you was very congratulations. much. And quarter, a quite that

Ed McGarvey

you. Thank

John Dietrich

Helane. Thanks,

Operator

next Your from Truist. from Benjamin Stephanie of question line the comes

Your line is open.

Stephanie Benjamin

Hi. Good afternoon.

John Dietrich

Stephanie. Hi,

Stephanie Benjamin

Charter touch wanted the on in I business. to long-term

Charter in strong last some longer-term You had incremental year really success these locking contracts. of

the update the as demand XXXX types has if customers. So on And just well contracts maybe as through hear of love XXXX? momentum the from year Thanks. for you're seeing to continued types these of really this an

John Dietrich

freighters a customers. entered are from -- the but in that strong call seeing prior interest Thanks, passenger early seeing belly capacity some described new beyond. to attractive. and customer being And overdependence both of contracts lessons this deck this And Yes. in were on as learning in these is I some that also be very secure capacity. learned a We're base of is what perhaps pandemic into But is customers within when main many environment, to and able from is these important Stephanie. and our pandemic

term and we've pointed contracts It's they as I seeing not Spencer And we're are are and agreements ACMI only existing have that. customer strong mentioned that or new entered of as excited because more about seen in them extensions they with interest into, remarks, a So agreements. out base. of whole like all attributes many of my the ACMI. associated but And new

of there's that's lessons responsive about to on the going main a all your So freighters also question kind capacity. deck pandemic be interest. I think the dedicated learned of post some to about attractiveness

Some recognize sell. moving already may and of carrying I benefits inventory rather of economy. of the post pandemic airfreight that the be not will our think inventories product key large customers than real-time component that around may a in or And

Spencer Schwartz

very now we just And to briefly long comments contracts. dozens it's add I'll there. have John's Stephanie, of Spencer. these That term

of that customer quarter, go majority into and we first years. were vast added for by one aircraft. the that passenger two had and not either be two four or lanes And go these we on and contracts added contracts operated 'XX During extended. some trade XXXX. are majority had into of the fastest-growing sort We returning will XXXX aircraft And the new the probably rotations had they

Stephanie Benjamin

Great. all so color. Well, much thank the you for

John Dietrich

Thank you.

Operator

comes question Susquehanna from line from Group. of next Chris Stathoulopoulos Your International the

is open. line Your

Chris Stathoulopoulos

question. Good for taking Thanks morning. my

John Dietrich

Hi, Chris.

Chris Stathoulopoulos

about that longer short-term Spencer, so Charter prioritizing in or if it of contracts with in flow permanent think to free here we the are more duration change the changes business? you through or margins And change Meaning are can nature? EBITDA So we dollars so given it's cash the year no pursuing want you however reporting the interpret in whether the in should John, quantify here ACMI there? or EBITDA Thanks. or then how this the structural -- now cycle

John Dietrich

of I'll ACMI in prioritization start is terms provides The secure question. attractive. model very your revenue Chris. It assured streams. Thanks

long-term about talked And more of are Charter seeing ACMI the what we we're like. agreements some as

is offer us aircraft. And versus the for partial out customer. remainder to and traditional and and ACMI, which combining pair the another I the ability get Spencer demand of is think of mentioned is allows Another both aircraft charters of of to dozens agreements aircraft demand use the fully utilization it long-term desire full full-time customers these for dedicated customer sometimes for typical element a our by there's

So network for in basis. a that's worked quite well global our on planning us

certainly for So, that capabilities from long-term are amount flex fleet and to But, basis. the keep hoc ad know of times a And prioritization And and doubt. of no these secure a able There's case, to on we like of lot of results. spot charter. in we we are level the really both the also kind deals deliver us standpoint, those charter aside allowed that's for we a a charters, good to the and two, been will consistent the -- there's interest, take ACMI always advantage that's long-term of because our in challenging times market.

Chris Stathoulopoulos

cash So, we positive so, for if or look that capital to And the -- pursuing this that PSP should expire as or book generally restrictions or other returning activities. think that when towards direct flow? capital order about accretive would the you free

Spencer Schwartz

then regard kind there Yes. There question parts think. cash Chris, and to was with free a -- capital flow sort of was a two of question of allocation question. I that

really see, strong that can and free way. have you Our cash flows, stay have been to continued

As and far down take pay that for down to and We return capital allocation, our you've debt approach XXX-X our balance pre-delivery We're as at disciplined deploying use our continuing aggressive is low-Xs. to ratio sheet, our the set a capital pay targets. the really leverage we net seen to cash strengthen payments. to

cost us determine CARES and place that our continues at have are Board the something Right balance we will place in a dividend that's to put on a really Act sheet. moment, the that maintaining limitations, strong can't. It's are restrictions Board generating at share either We be to those same to always But that of just consideration focus and business now, at time. the put or growing program. that point. in the capital, when Our something to that gone a have not the time considering don't above while this repurchases allow is it's returns at

Chris Stathoulopoulos

you, a follow-up Okay. Thank then and question. just

your some looks to starting some pre-pandemic Just respect supply flights color what like next back back being few looks we're of give wondering with if commercial we you're America, heading you on of some It the key be and indications towards months. seeing routes. like on to could could long-haul Latin like areas in levels added see wide-body

realize for network three but then the how So that top currently is second that half? you look dynamic if like maybe thinking curious, complex, does pretty five are your I or Thanks. lanes, your what about and

John Dietrich

not Yes. we're really all. that at seeing Chris,

fact, mentioned slow to In close. still it's I my remarks, borders as in recover, remain

Now, passenger I favor major come expect airfreight, the also believe service Once appetite being it's lot still aircrafts lanes But to -- lanes. dynamics slow used carriers a back of cargo going aircraft been to to and number of that there there the some running. will passenger it's their we is of out going slow. that freighters. and passenger as that a to get And and significant that are up the what's likely to are for traffic there back returns, But of trade be continue a capacity out of market. they're also aircraft going trade including are called come be passenger to

necessarily describing. you're seeing we're So, what not

at when is but going the one about. be talking in side passenger there differ is on attention next to few improvements. lot will all. the going on not seeing who reasonable months But, I'm it And running and -- of minds return given timeframe to of within believes to what a it's lot back a there's pre-pandemic to the some be tout carriers right and not up can think to I of now you're the demand the get levels, we're

Chris Stathoulopoulos

been number coming a But -- back routes difference where perhaps are was And -- a there's a Okay. still versus the I overall, few just curious ago? was if months of the referring on was flights small. America. route Latin seen that's to I you've marked any

John Dietrich

really. No, not

Chris Stathoulopoulos

Okay. Thank you.

John Dietrich

Sure.

Operator

Wolfe Group next Scott the [Operator Instructions] from question of Your Research. line comes from

Your line is open.

Scott Group

Good thanks. guys. morning Hey,

John Dietrich

Hi, Scott.

Scott Group

to back high margins ACMI. times reporting, rates mean the go been what never lower. look And have charter segment to I want because are I I when as charter So never have been three ACMI as margins higher

feel and different. look from they So still a very financial standpoint,

I'm So should margins this longer-term look the segment with like? just struggling what of

Spencer Schwartz

Yes. are that Thanks they We don't anymore. different Scott. think

have talked segment. been over been about That while similar as the businesses and converging a segments one now. As them becoming we transpired company as not more two manage we more the view a and we and It's the have time for pandemic. that just during something

was them. about long-term both we similar staff both a most There have and maintenance standpoint in record exchange routes, them basis. they our to has we talked our comments, of similar keeping short-term significant short-term cost because it Both incurred carry as as ACMI allocation from them. of As the in aircraft well. similar all sort two even challenge goods an we a opening provide also arrangements part between on for services, pretty support the nature same Even separate, fly

So performed. a the the may year whole maintenance have incurred flying full of But have to may maintenance, was may that years' either to we the disproportionate worth been ACMI for maintenance allocated have have or where quarter where been charter. the may how to -- then flying quarter in the been allocated

we example, the necessarily not have allocated get And disproportionate played so historically when of example, have And It's we times were the even there amount allocate margins lower. allocated about the just maintenance, way that and a talking way way. year ACMI that's would out. for you're for though being that ACMI consistently would

of segment. point at or to presented the them way. it that at two problems it harmed the better other together just one we And It's So look think. segment this

about So sorry yes, you a go long-term -- ahead. asking are

Scott Group

now. how understand should I'm think I just you're struggling look Yes. with about consolidating. saying, combined why what over Yes. this like time to segment I'm

Spencer Schwartz

Yes.

regard. contracts we've as that they're now, into entered similar and charter These into some long-term a contracts lot and look said more go So go XXXX. I XXXX so in XXXX to into starting these

a to starting more they're ACMI. traditional lot act So like

So aircraft extend over see and think, have to to customers, those number of networks is it the those be those longer. long-term here years, of And in committed the expect having hope what talked and John even and capacity to dedicated going really their of capacity. next are about both. I to as them for able to this and that we you'll taste is charter contract want margins that stay normalize getting to kind those arrangements stay customers operate And they're

Scott Group

if know maybe you with don't but can help I then this And you can.

representing way still then of that's want that longer-term hoc based business any XX% business sort of to move that understand more think I are now, just those as to or there. is do XX% fixed, X% the that's now? conditions? market the about of say earnings the the all the what ad on there you the percentage on And So rates

Spencer Schwartz

Sure.

move, for So, example, as the far US plus a that's do cost military as contract. the rates so for

could that flying do South then the loop America. change, costs change, South we we fly around certainly if a America, around So,

rates contracts So change, X%, those change do rates charters over when only those typically ACMI time. those up The renewal. long-term those change. obviously the The and rates for come

Scott Group

guys. thank Okay. you All right,

Spencer Schwartz

Thank you.

John Dietrich

Scott. Thank you,

Operator

question from follow-up We Chris have International of a the Susquehanna coming line Stathoulopoulos Group. from

Your line open. is

Chris Stathoulopoulos

thanks Hey, for my taking follow-up.

changes, look if So at just margin from then question getting EBITDA Scott’s getting that, my and it back you to we different it here. Should want first perhaps an perhaps at that on you're to think still a angle spot? a kind fact on level, the these business the moving missions high-teens that this a cycle XX% and corporate of here you're with through a is fewer -- overall

Spencer Schwartz

absolutely. Yeah,

you at, them look But together whichever. just And at our year, You the if separately just add you in can look can the the segment two margins. ACMI those you arrangement, you at growth And talked to have before, see done, we or past look see piece at versus as see -- Charter been then can look you long-term continue can if schedule trying as increasing that margins. we really see focused John XXXX utilization, see our look when do charter them we see when now that you at and and at And network these can versus about to you with you up XXXX every utilization, we'll margins we contracts. it successfully the look growth XXXX, tremendously. altogether. XXXX, of can and we're we'll really has And utilization. our and group and strong each our each that is every on And

in increased. XXX-X's traditional And of ACMI both increased, Our utilization has those XXX-XXX's. utilizations

down customers understandable, circumstances, that's utilization XX% the and US The that military, Commercial is. during was is passenger utilization that on was ACMI given minimum above the their flew the only guarantees which was Our side, up. the quarter. Charter

driving which those is So utilization really strong strong been has margins.

Chris Stathoulopoulos

fleet route on color follow-up What if left active count been on order Okay. with or And Amazon could growing a book tranche business. how it's Thanks. any the is served, warrants? are on the you or what's perhaps the of update frame, we where and the next

John Dietrich

airplanes running. for towards think the brought all But grow we continuing Those give of as a Amazon. business. tail Working I'll So business the us. at going to customer. Amazon. so year. relationship. up it's with their the I on operating XXXs It's providers appreciate they great we eight, for great and closely XX as the we're in And the be are end warrants. the XXX-XXXs, and operating and We on comment last a can Spencer three and XX competing we're fleet last let total diversify best They're that their that's to

to up now. airplanes XX we're So right

Spencer Schwartz

comment the briefly on just I'll And warrants.

of January and So and Amazon exercised warrants of year in October last January of this this year October -- year.

issued on we doing in because they exercise shares. shares. X.X of actually canceled So X.X But surrendered cashless sort basis, they about a million about so, or million

existing dilution -- a there's there. a from So an less potential standpoint, lot dilution equity shareholder

there B C warrants outstanding, of XXX,XXX remaining company. As far the as no to warrant are about warrants to are is that vested. shares revenue paid have that worth tied shares are warrants Any vested vestings and

the paid they So that company. revenue Amazon based to on vests

Chris Stathoulopoulos

plans Okay. Then Thanks. Spencer apply any PSPX? for to

John Dietrich

answer that I'll one.

to plans apply no have PSPX. for We

Chris Stathoulopoulos

Thank you. Okay.

John Dietrich

Sure.

Operator

the questions And Presenters at this phone may there are over line no continue. further time.

John Dietrich

we in you and questions. us interest families time And On Air you of and employees, that speaking you much. sharing Spencer behalf today. Thank We and great Worldwide. for again We look would thank appreciate to so of all like all your stay safe. with your hope for Thanks to all our you soon. Great. your you forward with Atlas you to your I of thanks operator,

Operator

Thank This participating. concludes today's for conference you call.

now disconnect. may You

Atlas Air Worldwide (AAWW) 5 May 212021 Q1 Earnings call transcript