AAWW - Earnings call transcript Q3 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 Inc.

Third 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. reminder, is a recorded. As Instructions] this being conference [Operator hand now over Holdings. [Operator would to the Worldwide Instructions] I Air like conference Atlas to the begin. Please

Ed McGarvey

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

on Act I’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

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

John Dietrich

in special our adjusted our of all best for everyone. challenging even to for It's in for moment quarter of the and I'd the operating is in hello third our very company's very this better. a Thank entire deliver earnings be quarter to terms revenues history next and results Ed earnings able like and their We've company. completed call. Atlas Thanks we've just This outstanding quarter thank we results. these Welcome team environment. joining. you in efforts pandemic been ongoing these their will expect that to efforts because delivering

from very we've market and to well As you've seen the optimized favorable positioned our capitalize company future. business the results, We've our leveraged for current also conditions. under

We XXX of have fleet to and the the best XXXs, XXXs, an air assets market, industry aircraft. freight serve XXXs, including leading

tier of top a have portfolio customers. We

have core well-positioned business. we that’s also take together, and is air that Putting precautions the employees safely customers and and protect the today we're to the transport future. the and essential market We of value our At growing our and our priority. all unrivalled a to Atlas, our continue simply team operating is around global customers best a a freight safety top With focus, us the in to world. as always in very capabilities, operations extensive to and our serve goods needs support

The time, We this what on focus of X union new we effective and pleased pilots are at September a our of continuing doubt new became asset enhanced often agreement for new existing Atlas. receive important even will were refer company to grow pilots the investment our higher This opportunities careers benefits. joint this all significantly in forward customer negotiating as well-being. as and largest competitive we're greatest as the our preparing new for working no or contracts their pilots an other possible. agreement, life a implement and to more safety to of to together rates build our reasons to improvements these of continue Union's that for their our to terms for pay future. JCBA. some agreement long-term when our quality industry five-year provisions very soon new group, we regard, leadership bargaining contracts. Under in with incorporated people agreement, with Our employer here to the stronger amending and JCBA and our reach collective provides and we'll In or We've pilots and leadership our our we've pay, look to new pilots even expectations new work when for collaboratively with been as

quarter. offerings brand we to acquired as by JCBA fourth years we platforms, the for diversified immediate way new for for Airs Atlas us service to us gaining XXXX. growth enabling it entry the merger during well our to Southern these continuing flying we complete paves with Atlas the occur served us the Air and in of Through has XXX perform our capabilities to which to expect XXX We forward in Importantly, XXX The the operations for Amazon. ahead. logistics Air, into since Southern well and Cainiao, Express Alibaba, DHL the engines leverage ultimately as XXX look arm as Southern,

Afghanistan. needs our third of proud also personnel are historic their have serve government's extremely the and we we to US customers of the evacuation supported quarter, As the and refugees businesses US in from

deployed passenger call of we part aircraft evacuation. the Air As to Reserve Civil help formidable the of Fleet, our of up fleet the

personnel States. the compassion the total, missions In to XX airlift flight as their locations from XX,XXX of operated we and Afghan volunteered the United well US refugees US various humanitarian with support our provider to into ground mission. transporting about and military, over up as largest and stepped personnel significant the great families As

In In our driving particularly strategic markets you Express fast-growing and long-term Express. our to continues in for new regard, aircraft increased e-commerce earnings financial excellent of business focus pandemic addition Asia extensions into the saw that agreements. with also global safely our as recently be entered services morning, despite aircraft extremely important this DHL long-term challenging America. We've announced South producing for operating our markets, utilization XX or on robust and an We've These to results. demand and we release environment. and extended important military contract this are

other in ever new mind, ACMI our with with efficiency the agreement Collectively, long-term improved looking and to unmatched be capitalize a current customers to loading among four They that will payload FedEx they'll taking noise demonstrates forward also and We're Atlas. we demand. XXXs balance entered delighted nose emissions. delivery market freighters new XXX-X our coming of future. provide fuel on relationships well With the that Boeing These we're this last as capacity, long-standing manage continually long-term are produce in strategic as capability into with deepening XXXX. capacity ability to fleet for We while opportunities agreements. our to

We take to between of expect next October -Xs May delivery of and these year.

acquired X, three recently of reported and our previously release discussed freighters to XXX-XXX our earnings on in acquired during October, today, As addition call. that XXX-XXX press to us. lease our we in more last were the we existing This in is

for our -X the freighters our As end XX. our will Acquiring strong wide-body Atlas to and – returns of XXX-XXX the their in a demand confidence at ongoing ahead. existing previously announced in of XX underscores lease XXX-XXX reminder, and bringing the years these X that XXXX the terms for excuse we other we XXX-XXX in provide acquired of existing purchasing number be freighters of new will total me,

results slide third quarter X. Now turning to on outstanding our

grew billion our revenue revenue new As to company's records. This $X our exceeding our the in first and earnings included quarterly history. I adjusted for mentioned, time

X, XXXX, the due operation Our and term of higher continued of reduction aircraft customer third chains pandemic. of They we yield to in during impact the the market long utilization. ongoing reflected global reflected extended the quarter contracts, numerous of that available the reactivated results XXX capacity the quarter and of increased cargo the also fourth disruption and supply new freighter

these quarter cost third the for our JCBA. by benefits evacuation maintenance to from flying expense. and heavy benefited related Partially performance also Our were efforts pilot higher new military lower US driven the charter Afghanistan passenger offsetting

Now moving operating market. air Slide certainly X. on to strong a freight in very We're

the ocean ahead favorable substantial our international capacity, not and aircraft levels, We the air are into yet has volumes long-haul manufacturers, retailers demand. as as future. particularly widely capacity demand and worldwide has that the very continue passenger to holiday shift for of international well bottlenecks Global This to air returned. industry ports new including as reported the shopping chain foreseeable strive services market, while challenges pace conditions routes with kept fewer freighter to levels, shippers pre-pandemic on that Supply remain belly includes for industry especially replenish amount not driving exceed inventory expect coming to season. freight of increased modal low the

longer e-commerce the growth has addition, across In environment express of and term a drive demand. to the structural both acceleration led and globe, airfreight which will current current

challenging one, very operating While very the seeing continues to the market the make quarter environment fourth we're a remain pandemic dynamics robust. the in

we nearly $X.X result, revenue record more of expect earnings in billion EBITDA XXX hours. adjusted and adjusted of approximately block revenue than and the As flying million quarter, from X,XXX record including a fourth

expect quarter the year. income in We last fourth $XXX.X fourth adjusted our net of net in excess of also compared income with prior to of XX% adjusted million grow record quarter

and mitigate the Our as and of utilization, initiatives help term of contribution continued by demand agreement aircraft our yields. including well also the to reflect impact higher strong long in fourth high customer quarter peak JCBA, as It costs increased volumes season agreements. XXXX outlook new proactive from the our solid the new includes levels driven

ongoing and as working impacted million. pay have We significantly a also expense continuing pandemic additional into all by safe been maintenance expenses COVID-XX driven of certain as for by costs employees for employees approximately expect locations including $XX provide to the for that environment flying well

comments point questions. and Spencer's For we our $XXX and $XXX amortization our quarter provide your details and approximately million about mainly I'll have additional happy exclude good capital to and to to parts results. total be after we'll for And $XXX purchases which on is a million projected total third are to for expect aircraft Spencer expenditures fleet. be Core and $XX to expense million. for remarks then the Spencer? aircraft around million take some full components more engine This depreciation to year maintenance

Spencer Schwartz

and hello Thank John everyone. you

net Our are X. with slide quarter results $XXX.X reported million. million totaled income $XXX.X adjusted basis, on net basis, adjusted On totaled an income $XXX.X excellent highlighted On third totaling a million. EBITDA

an included XX.X%. tax earnings rate adjusted Our income of effective

the to to top revenues billion slide Moving the in of rose X quarter. $X.XX

first in flying, revenue segment the block in was of CMI per Operations global was Volumes the costs. this primarily we during the driven generated fuel increasing of impact extended new cargo the over mainly higher-yielding by the an of disruption increased billion average reduction mentioned fleet long-term less meet including the an $X revenue during of Airline were was profitable customer smaller capacity Atlas time reduced supply hour the as gauge quarter. unchanged to flying to which demand. John and the Higher rate proportion chains ongoing strong market, higher due As period well while as available of in contracts relatively utilization current our as increase

shared, the was charter flying to reactivated relatively volumes military we benefited John of of the As during the evacuation increased XXXX the unchanged. XXX-XXX as as passenger support provided also we efforts. freighter well quarter the fourth that from Revenue Afghanistan that in one Leasing operation related for for U.S. Dry

Looking factors higher Bargaining noted were to now costs totaled the heavy I lower Agreement. benefiting Significantly scheduled driven the maintenance of Collective at by just contribution interest higher positive quarter. the related contribution as in of expense. bottom partially was segment operations related offset These the primarily Leasing due expense contribution lower slide airline Joint to repayment well revenue pilot million was our higher $XXX.X primarily third debt. the segment as to In segment Dry improvements by new

slide Atlas to next given take prices in increase recent you and the has moment to a limited move we fuel. direct to a that I'd very the remind like Before to exposure

price is by our longer-term prices. including index on based fuel those adjustments fuel charter risk commercial For contracts largely mitigated

as our the don't those commercial or limited For CMI responsibility. Dry customers' fuel fuel our ACMI charters of our for contracts services fuel our our fuel prices. reflect is to is cost shorter-term expense price Leasing incur market We and in typically fluctuations in exposure business as prevailing

expenses. risk don't military the in have in for US fuel pays military our it's for as In offset US revenue us fuel, addition, so we flying and

turning Now slide X. to

the Our We X.X equivalents improved two restricted ratio and finishing $XXX.X of cash million. ended cash, the cash with totaling net at quarter a low ticks, another leverage times. including record third quarter

flight activities, the financing Our cash cash used cash of XXth Net partially used XXX-Xs, and primarily four offset at September, equipment overhauls position engine months investing reflected XXXX and provided cash partially for as issuance. including payments for operating activities. upgrade by modifications, kits. first investing activities, the primarily cash engines, from nine payments offset for was activities for for pre-delivery from debt capital by Net financing by reflected debt core the proceeds spare used expenditures, especially payments, as during well and

We continue to financing. disciplined a to apply approach

indicated committed resulted secured We capital X.XX%. us which at by to average now and has unexpected allows excess to value business we've a have As balance And assets, opportunistically weighted interest of events. very cash in the debt. this low balance, stands majority deploy before a which aircraft is sheet remain our strengthen to as well rate, as navigate related to coupon which our in the a strong

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

John Dietrich

to slide Spencer. And you Thank moving Great. X.

quarter the and great we market We to expect continue. conditions have momentum. excellent delivered favorable an We've third

any proving reached in environment. Joint Bargaining and Collective we're strategy, Atlas our opportunities Our Agreement capitalize with this opportunities new again a excited the pleased provides that team agreement executing to on our them. have pilots for We're can to is on

assets of sum the you needs We we're operator, employees. network and To over our today to balance and every highest point, like first up market of all serve to to precaution and it capabilities. our And to it in unmatched customers airfreight operating turn this to the take world-class take have customers the of quality sheet the again, team strong, a very And well-positioned question growing we'll continue our protect I'd global at please. and unrivaled to future.

Operator

question Truist. first Moore with from Our Stephanie Instructions] [Operator you. Thank comes

line your is open. open. line Your Ms. Moore, is

Stephanie Moore

me? hear you can Oh,

John Dietrich

Yes, can. we

Stephanie Moore

Okay, Thank you. it. got

step-down this generation year. For my flow another ratio touch I just capital wanted net really a leverage first for a bit allocation, question, in performance strong Obviously, to your the and on quarter. cash here

just stand overall you your in view? share maybe you. So terms Thank and repurchases of acquisitions just where or

John Dietrich

very financing with start at and and it look our referred our you our highest So, to of all allocation using I'll to what We a our disciplined Stephanie. And Similar relates balanced to strategy. approach Spencer activities, thank that. on capital take for priorities frankly cash.

prepared we've our terms or in are. looking always on in pleased our M&A. for focus aircraft. we're remarks, new invested the on opportunity for whether XXX-XXX growth focusing down We're modern I as said our of well efficient in a very growth with in that's where bringing well. the And spent funding as time debt organic heavily we fleet. considerable As meantime acquiring And We aircraft technology as

of in We also marketplace. pandemic this in the still out have to there Spencer there still And remember mentioned environment. comments, as we're his uncertainty remains a in lot

strongly feel to we're want downturns. continue, the weather we positioned While potential position current sure that's saying conditions will a going I'm happen not weather in that to good any be we but to to that that. best we're

really on So table. are all options the

that said before. I think we've

to you So Spencer, want to to over I'll you see it add turn anything to if that.

Spencer Schwartz

Thanks, John. Yes, Stephanie.

returns is above capital while balance focus generating business strong sheet. the growing our a maintaining and of Our on cost

to capital as modern immediate as have market opportunities we aircraft of given evaluating we also the spaces. current disciplined We coming. given generate evaluate shareholders We're sheet careful four focusing efficient we're while for may flexibility make strength growth. the in have any that while thoughtful. see adjacent a the are like we these But both would we're and sort our us invest is M&A for in potential reducing our customers the and M&A valuation growth on happen helps strong opportunities doing taking on to organic And especially space think so in organic deployment. the leverage and we paydowns we we of events we're being focused and continue a so we're continue But approach, balance that unexpected debt want that -Xs John investing to said, in that really our regular best opportunistic that As that opportunities. prepare and normal returns investment for us well

Stephanie Moore

Got it.

further that expires reengage appetite, when little share the lockup in you in being a us to I I So guess share remind push to bit of, your repurchases? of just terms terms in can able mean, period repurchase

Spencer Schwartz

they of companies of scrutiny, end on received did at XX. CARES regard ended amount and restrictions longer they that There's Act grants but significant end Act the technically with CARES of The no those still September September Yes. course, there. so are to,

We've Board obviously, have if that go, share we'll As our it's as to our assets. considers repurchases been ensuring And modern share and considers. we've we've let and that something We far regular everyone efficient sheet. as repurchases that course, changes. been know want certainly balance we a finance talked board our have about the in down debt paying strong fleet

John Dietrich

add raised point. to to you Spencer, good too I'd that like because a

While remind created participated pandemic still in was time legal in has that pandemic. technical reasons, the CARES due the the by fundamental we And we environment. one to the to noted, like the as passed Spencer Act I'd uncertainty of the are

of out part that's We're not so And of yet. thought that our quite process.

Another in debt on growing but a Not available paying share that down matter. us Act we're tool M&A and organically in uses pandemic the a and that considerations our we CARES practical raise of factor exploring would aren't given towards business still cash the focus as to opportunities. the repurchases

Stephanie Moore

the color. Got Thank it. you. Well, it really I'll appreciate on. pass I all

John Dietrich

Thank you.

Operator

you. Thank

from next Securities. Our CJS Bob with comes Labick question

is line open. Your

Bob Labick

questions great congratulations Good morning. execution. for taking Thanks and on

John Dietrich

Bob. Thanks

Spencer Schwartz

Thanks Bob.

Bob Labick

from obviously wondering rest availability employees as pilots as Obviously, you if the about now? But is have the hire JCBA how also you it extraordinarily was availability to bit and impacting kind the your from board potentially labor right well whatnot. of new -Xs of across or strong the you need you more a to could relates little if demand. I talk labor any for

John Dietrich

is national consideration. industry Sure. global not Yes, Bob. a Thanks an certainly if labor availability

about we're availability of We across culture say of industry an great not That's resignation the do. others that to that availability our do. is we good issue. the We some challenges feel see labor You board. experience don't kind in. the the that in headlines certainly Pilot

believe and many that it's if great we that of with in the in very And here believe day. pilots if we the see I say. into organization. We the I have not entered provides The throughout our for pay industry us a you XX that is integrators stay JCBA a war good to -- a and headlines their have the personnel. said culture believe has worked the the reasons. well. very within said, express are everyone carriers right over said, years, pilots. and and every I talent Atlas of outcome longer, a theme are organization to can on an It good our we're the certainly rest starting we as in place mean careers. have across the look no feel comparators bargaining and that's true and the it down with hiring. I at for other agreement hiring management resonates team Atlas top That delighted You regard as from Atlas pilots as The the to and majors long-term this they together is exception. grow just of where all about a that agreement industry our our serve. rates People collective raise come competitive generally they pilots got to That impact well for and

we'll to out retain importantly every focused recruit looking be and day we're that. on So, and there

we're forward. manage to it's something and need everyone So, going to in else an is it's we'll say issue, summary, continuing manage but as I'd

Bob Labick

-X any future having signed that the it And Okay, but remaining update also agreement payments the maybe you having it to benefits on you're this going sign, great. interest for as an as relates to but future obviously, agreement And bargaining customer helps, from this, other for to on collective touched relates contracts PDPs. then deliveries the contracts? then done

John Dietrich

Xs It's one Yes. Well, can't and coming. about feel Thanks excited about Dash enough. look really coming airplane come they Bob. we we're really a soon to us. the good great Frankly

as strong best tremendous a in on the it a for but airplane aircraft. really the not about We're worried is and is talked where we're to about the too aircraft. the a the XXX placement interest. X best focused in we Dash customer terms So of the placement, is That's there's placing We're of environment. there's It's really market great really freighter And other great airplane. in what does. disparage aircraft not

feel course. about that we good of So

X crew much. to that. our Our is ability to talked staff put to as and Thanks continue Dash customers manage just for it work them we're about online. Super. I it be to bringing to about will excited and we're and sure important going very But the

John Dietrich

Thank you.

Operator

next question comes our And from Susquehanna with you. Chris Thank International. Stathoulopoulos

Chris Stathoulopoulos

up Good morning. on my Thanks congrats deal. and John, labor for taking question team this and tying finally Spencer

John Dietrich

Chris. Thanks,

Chris Stathoulopoulos

prepared rain you September. looks If here in not to in parade, I was the reflected September could it curious remarks on but deal anyone's said so your like

about and remember B or moved months charter coming years how some like other So what think the much relate quarter exit that about SWB for particularly half it here next for as and deals expire? when I summer rate And the Part in back that six the of or And for confidence need one up you about to contracts capacity gives new you then spring have to wages the to to more looks last can for point Thanks. you you are ACMI-like we of least that back into of that is adjustments already to any the And a at when renewal? year were to lot fourth these that come you of and three higher up widebody to those those come online. offset at two some this of much contract duration. how make the months of saying XXXX

John Dietrich

and thoughts. parade. you Sure. first some Chris, further But for our you over it on going to rain of all turn I'll to let not start then Spencer we're

any not capacity that effect You're immediate is right But certainly also And September online. you're into a rates right at went starting me to causes X. concerns. back the rate come

a as as And is be passenger coming be And coming It that watching certainly well like the more that and first capacity start capacity back see borders at that we coming of remember designed all into be In closely. to one for the cargo you're market. for trade see belly all capacity be important point-to-point. of future. the aircraft of seeing that other already that that. XXX expect And a it that of we where on expecting Trans-Pacific, more to was backend newer for is the that as That online coming what will hub to trade But capacity but is to to and transatlantic levels. will open back. Will that airfreight beyond is capacity point-to-point? also pre-pandemic I some demand we're on we're you us? And not come up back? going back? need belly really recovery. slowly, as what think the not Will or is lanes the the will capacity of international at a of considerations will the pace that coming can particularly? How kind demand words serve is go exceeding it the much pre-pandemic. lane Some is pace -- the question spoke, that first come which foreseeable at levels least There's well be but capacity the of into that typical back is capacity that number back also for coming in

we to that that's is amount exceed going coming demand the the the and to continue think rate back for supply. of that's capacity coming So back,

of Another the of to consider as express the factor going that pointed are well to e-commerce as growth grow and continue some we to is changes out.

demand as I new seeing a forwarders manufacturers capacity sustain, value customers, been passenger think the to And international some There's capacity. said the well we able been sector. As on new going and of as controlled the us the freight are of beyond customers we've from recovery that's to are that create. tremendous to some of fixed the

said today, where a we and favoring So The assets aren't people tie of feel the eventually to that your there are terms question, about signing and suggesting are And amending I go service month the to will six beyond three part think we our to not duration, well prospects. recent moderate. your but from we've considerations. into of contract we've duration. the don't good I'm that, more been going are long-term including They that of we second extensions things in provide. number deals of

play see feel we in ability Spencer suggests. better to you. what We pass to on this costs. a it as So our longer-term about over question those than your

Spencer Schwartz

Thank make I'll just you, the but comment more points, then John. Chris, duration. specifically couple of on a

Just a said. to couple John add to what points of

really well to I'll very need just that, cities continues hubs. will like And that are go to for is when are one point inventory and are when of other to know, at goods move move start these from duration you come things shortages they lows, about all levels that very, are goods passenger As manufacturing these airfreight, back large things talk of because goods, record the when available which quickly. there and available, if means and a bodes number reported and widely of that, and then, then back, chips people when have away – that malls and to

And so that focused. drives more that cargo airfreight to are airports

the belly the into as an to is them get so And of less contracts, capacity and those But vast lanes. long-term charter XXXX. of to not available, of the then duration and issue majority XXXX, it's these important in trade go

XXXX. Some of go them XXXX into and

XXXX, through a really years, good of During it an the customer goes for rate. we a X.X with April term a aircraft quarter, so at added

customer We also October extended XXXX, with goes term another to that with a higher rate.

extending higher rates, business. so agreements so long-term charter we these customer's basis on at about fairly regular feel the And are a good

Chris Stathoulopoulos

things time I buybacks Cares to for the all think that, back to follow-up allocation airlines a it XXXs. get the around probably to under as M&A, a buying into a And you Okay. Admittedly question the you it's I considered. capital so here. lifted in But stocks with respect not XXXX good be was to did Southern have so deal, restrictions on And think the earlier, there mentioned was Act. the

XXX, perhaps fair we or that something as look it something assume be moving or of would XXXs. As Should it could an something upstream, you long Airbus other or upstream? at be you're is we further something perhaps into the that carriers potential do, XXX, might kind MRO Thanks. or platform

John Dietrich

have to I on have a not aircraft all not Chris, want a been, technical be capabilities we in it's type. their that. right we the and business. And maintained about has Airbus go to I flown an people asset options are our for ops sufficient product. We're We great It's we to would the out that's ruling we're of product and our confident the from would the of be that Airbus to scale careers, so sufficient And Yes new certainly organizational think sure sure very flight have great scale concerned our perspective do just table. our into Many not view feel people product. that. question. any want

product opportunities I all. So, there With presently M&A regard an rule times. Airbus fewer Spencer and wouldn't at at and are to out other to this options, alluded fewer

MRO look we to else? something do adjacent space or So, Sure.

out are I the at so this on wouldn't point. think I table, options all rule anything

Chris Stathoulopoulos

you. Thank Okay.

Operator

Thank you.

Cowen. next Our Becker with from comes question Helane

open. is line Your

Helane Becker

the time. much very very Hi thank Operator. you much everybody Thanks for and

John Dietrich

Thank you.

Helane Becker

a Just couple questions. of

didn't up the tenures the would is, your on with if people I at see the went to starting up I question contract, salaries So longer compare have those what's look and But go the significantly. I I pilots tenure? average it significantly. for first The contract old

pilots to tenure So senior pilots about we junior the guess like, I and is ask the versus should way average best it? how think

Spencer Schwartz

Yes.

down. past So, XXX tremendous had I'll for We weighted know a down. platforms. sure we've really amount or years We've the Helane the so, It's The speak of you of coming growth. average is all large as the average XXXs tenure. The grown coming over in numbers. four to saw the

So, I'd I down. also it's what five be to And so when kicked the off exact -- hiring a but this contributing pilots. fingertips, you're then guessing, in I hired we've have hiring XX pilots, retirements years, I'll tenured there north a you're my shorter I'd in increase average goes had average younger, the have other because at don't to number that down. don't of And specific pilots mean probably guessing much. the number when and coming but scheduled your say, I Age say is be aggregate. new in younger rules significant we've tenure when I than say,

of So it. that's piece that

Helane Becker

No like Yes. just it would if to eight XX? be I'm versus range coming think would it's thinking over But down. I the in XX-year

Spencer Schwartz

at I aircraft It's for hire say it's have don't look this have us opportunity But again, that point. to able exciting an we're don't smaller to gauge. graduate entry-level XX the exact it's to the I but into don't And it's equipment. up think it's gauge to a number. an XXX larger pilots over aircraft generally want I and

have mentioned gauge, to types, enjoy as gauge variety for the different fleet operations. pilots we largest ability large, smaller when So well as really I our of fleet of a types

come So for a we for have to feel we attractive pilots really value us. proposition work

rates. on the So

Helane Becker

I’m sorry. Go ahead.

Spencer Schwartz

with negotiations with in all arbitration rates. about as So the the entry-level good and the our process was we competitive top be feel we strive scale as both the union, part and landed second through this comparators at there. marketplace. of question the well going of And rates, your to we looked In on where

generally That's low the younger we're true across end. board rates we're our scale higher I'd So say strive the of end I pilots top on on gives of our the to something people which the wouldn't for. certainly on say comparators. with

Spencer Schwartz

you. Got

for appreciate for John. question this Okay. Thank much you that very a I detail. might it. all then And think really I be

questions the think appreciate so wouldn't to the you made and on, all subsidiary, growth you the and you do ordering I it and company answer aircraft As You how other that shipping in about a new all comments for about to Star right, freighters? wouldn't – normally their about like Air see normally Maersk you wanting own somebody XXX two think the aircraft.

about so? would getting you thinking market are year folks or rates how the you about So and how or in impact any airfreight position that own think marketing the into might non-traditional that next like your

John Dietrich

comes minimum. hand, question. always get very It so personally that have of it, see the and cautious says keep airfreight making with other it. I you a sophisticated sustainability. it invest to that potential into want That's to about competitive if when the there mixed the But I so marketplace. value a earlier the was great players I comments a on feelings little it. new a you I'm competitor Sure. they're some look in in airfreight ties value much at and so of freight willing the about market the that very to in

extent, of I Spencer modal from customers created. it a to ties future being for with of air the a make there's in sea airfreight the modal meaningful doesn't on deal new long-term air the and to shift, So freight. well think to some take shift impact that bodes great comments of of

at the share you to as view what need make I compete is So continue best What and sign Atlas business. we airfreight. we sure we be that of have favorable at to our it think do also for means to to get the a

Spencer Schwartz

That’s Thank much. very you helpful. Thanks, very John.

John Dietrich

you. Thank

Operator

you. Thank

Wolfe next Our Research. comes Scott from question with Group

line Your open. is

Scott Group

Good Hey, morning, thanks. guys.

I differently. of one little to questions ask So want Chris' a

way business, that with repriced a what's less, any Just with year? get it's one compare next the longer-term And business charter the how thoughts rough typical in guessing that your of year or there? does another? I'm but will percentage

Spencer Schwartz

Hi, Scott.

They We have I as conversations long-term of these need of all with said, agreements. And these regular are a this in charter number customers. capacity. we

they for the And very five demand with entering so five-year into to marketplace. There's a out are years. those. all terms And basis in up extending on interest happening the for these are extending There's regular conversations those in us about time.

than because agreements, ACMI as are fairly those in So our say, typical, as it's, would I far long-term less nature.

have XXXX. so and As about they to go XXXX them and these I of far agreements, again, XXXX looking into some go they're all ensure XXXX, into it. capacity to good said, feel this we that as And charter as most

Scott Group

meaning XX% rough might No, of I it understand the XX% so hey whatever reprices year it's rails given ballpark the but it? Is truckers say, it, say, there is. can will or get like a our we in a business or

Spencer Schwartz

these, Scott contracts. case customers the or us, their different, we forwarders don't are with for be our for who ACMI forth that that our a have in of a We their right? of customers. But -- customers, we number freight dealings finite little have Perhaps because might many have charter so it's brokers and

finite these a long-term charter of have contracts. number We

numbers And not so It's very of of we're large kind all of managing closely. them thing. sort law

Scott Group

Okay.

John Dietrich

that longer additional a it's environment perspective when generally a as Scott, been we So and long-term because agreements by undervalue than and the Chris. tied agreement well, to comment times particularly with But that the is the capacity in complex the results. long-term I'd my a also capacity strong very has to in we long-term very fairly of balance add charter little the like that maintain we're yielding, that to hoc I swing we've rather design balancing to in, little charter high lower-yielding to don't at the significance commit charters. And capacity want ad with route bit flex contributed committing the short-term that right? to

we while favor capitalize the charter to wanting well. conditions as heavily the also in the ACMI, So near very very, long-term we're favorable on term

Scott Group

nobody calendar you up, now maintenance year a the on ago year grow don't two And XX% almost XX%, thought this at this anything items? and That earnings or to either is just on I I on you'd ability ask year. earnings? there's Can makes reset military know, will the and time year be more? probably So grow this sense. share next that could Any earnings thoughts those one

Spencer Schwartz

well in pandemic. know, a airfreight provide With of we is, to midst continue. has low things it's of call. inventory e-commerce. as an a some acceleration express about environment, of and more environment for all Scott, interesting during that the incredibly expect information of Yes, earnings The look levels, these the record -- that It's ’XX, talked and bode will John overall, adoption overall. our next regard you really we'll to the obviously strong

quarterly And guidance guidance provide next for only providing whether whether so, guidance We'll see the longer this more get we or a kind quarter, quarter to year. of back we been providing we're one normal, term.

there we So, there course, of expect really one you will about that big know, at more during are And factors. positive earnings And that normally do is we'll number our of point. call. yields. moderate are next some variable But a talk they

is lot and to when just that of have we'll we'll modelling a do see so, that. around And

John Dietrich

a could And view term I because just if that as on and point, add don't military. remarks, military flying thing. have necessarily Those see Scott, my prior mentioned to I may in some the you that, lower I one bad we I we mentioned flying, more flying. in for flying disparage additional any military. current market, it's adhoc to the uses. just, charter in military more be the speaking way gainfully in strong efficient have the will resources generally employed into market. commercial And the not other commercial That's It's versus the near

that bad, be to for us AMC So going if right all of a isn't softening the now. timing business cargo the there's

Scott Group

Makes sense. Thank appreciate you guys, it.

John Dietrich

Thank you.

Spencer Schwartz

Scott. Thank you,

Operator

our from And Galanti you. with question Thank Frank comes Stifel. next

Your line is open.

Frank Galanti

-- freighters much. talk return more you I forward, Great. normalized difference. what freight to passenger the like Thank about to dynamics of the took of moving that belly is? for it's XX% you historically supply what the to about From kind expect I international normalize Can up in a up, levels? moved environment, as kind of And very their make market. you wanted ask space what rate current transoceanic dedicated understand freighter wide-body

John Dietrich

main XXX, most of directly traders. favor in it's the versus operating XX/XX There coming from the closer about we premises, Frank, market. into pre-pandemic, of terms for heavily talked be freighters. the But weighted us, future, main we to in clearly, work as more feel belly taking be will to the you deck last know, it's deck more freighters was for foreseeable not XXXs. new what the of we're competitive going it's

largely are and the production. exclusively, going the leaves not the and not FedEx’s XXXs that and so DHLs largely the competitive integrators; integrators XXX to to XXX mainly know, for but us. the You new The

and of As heavy a employed there's equipment While when that investment, the is offsetting true lot need going there's on retiring that now, up they're to of for come of a there's gainfully I be going for think is Right? older also lot a a thought. to of expensive future. XXXs. many But they checks, to be may be lot which very MDXX questions that the

widebody I sure. then And the while. that for much minds or what And aircraft think retire Nobody whether passenger all knows reasonable out. large converted? retirements which knows passenger of be the be less for differ you AXXX Nobody the levels. belly. than towards know, The the is again will that many be the how question, deck will factor for okay be those it will the equipment last can years XX% international heavily main come of consensus of will going is given pre-pandemic -- back? in a The are capacity XXX general and equation that conversions was freighters couple conversions sure. will versus But out. would that are are weighted then factors pre-pandemic for it to So And into XX% belly that's some aircraft speaks that of more a the real that how play the older

the foreseeable So I future. more XX% than but that percentage main don't know don't it's an will I have deck for I exact would just say be

Frank Galanti

last a kind follow-up from get of said widebody parked. of lower through to back many guys' in your on I deliveries world? retired being your kind And are out? were going after my obviously XXXX today, prepared sense you normal them bunch freighters dedicated secondarily, year couple just Okay. guess what's supply the from outlook about XXX times? flying perspective what each growth usual. than helpful. And in deliveries really normalized the in more planes Can then you years of remarks for a normalized that freighters That's And what But more like. the of to I guess, From what talk relative understand it's is as with years of a I looks happened how brought trying

John Dietrich

one market come of time that. is to retirement aircraft speaking, of for I really asset-driven. and world number in normalized you're on comment I of before, The those the you've can regard to entirely life I the said And assets. Yeah, willing freighters. I market-driven the production, you think these don't it's be understanding Generally XXXs the up maintenance, it's are predominantly there's And invest honest I'll to in prolong line the of my will fluidity to XXX. or that's down what the got that's be conditions heavy and for a be speak how With rate retiring just but production know month, that the The something a many might than Boeing, I higher to world. is normalized there's want anymore parking what comes if a some at or on -- a like one think a more a high end retirements than month And what lot that. fixed are two to it decision? XXXs really no two little don't XXXs. of

heavy to know I numbers carriers any capacity behind So be or that into don't go market. want to, will you be detailed truly replacement market-driven again, you much But will what maintenance. capacity the answer? I there how invest coming are open to question, back an And extent which Spencer, to more think be have put into incremental? on willing I that's if that will

Spencer Schwartz

The only I the where add we is operate. long-haul wide-body can primarily really thing space in

aircraft won't announced four more going that. are be We of like and I to from think have are something announced XX customers most any the last there after to With the There XXX-Xs. XXXs, Boeing regard those integrators.

the capacity some and coming So are FedEx most Europe there's it's space. Middle are those. DHL not airlines much of Asian Eastern and and getting just also that There But well. as into

a So really that's consideration, Frank. important

Frank Galanti

Appreciate you it. very Thank much.

Spencer Schwartz

year. thing demand such per typical there's typically, just the as X% X% I'll in air to said, no anymore. grows Historically, John Yes. freight as demand grows and add

orders for you are number just Plus aircraft there. you be out X% added further out number of really there to so, of But more aircraft if the that the means have that the retiring, aircraft talked need and times there incremental so, to that X% that older it's aren't And about every John are many as need year. take aircraft.

Frank Galanti

Got it. it. Thank you. Appreciate

Operator

with And a Chris you. Stathoulopoulos with follow-up Susquehanna. I have Thank

Your line is open.

Chris Stathoulopoulos

taking my Thanks for follow-up.

every important least get it's And But sensitivity, certainly through percent than do, are about even feels, today. questions that though play X. But were of XXXX. that some the is of like should a that Atlas next sensitive that block remain going perhaps that since of how least you with spot or block stages XXXX. through I'm and going your think hours on I lot last sounds of what Thanks. recovery? do out is believe a spot? X now new -- your is contribution mix Spencer, anticipate the just ask, I where versus to I sort to course you this sounds of based in certainly to to we And dollars? around at year. X%, answer XXXX, because lack quarter this hours number about that currently So, at to you payload of ask, like at the And is for But respect better think it word, level of on John longer that changed comments,

Spencer Schwartz

Chris. Sure. Thank you

give rundown. I'll So overall the

X%. do leaves, Our for that ACMI do the space Flying military block hours we traditional Flying is XX% hoc long-term and the ad all XX%. around are we and in is somewhere in of, America that sort somewhere somewhere are to charters X% about now X%. X% South around at between do. we XX% flying of somewhere that These around

that true. is So hopefully

expectations for our think are at perhaps a little normal. becoming change Chris. They least The other part levels. was new foreseeable future the do your question expect do this I to of This we we continue? Yeah, is At the bit. these

us to down John look you slightly, they're back in operate bit, the these percentages but more change a said, you long-term can As which if so consistent. tell space, military little charter came allowed fairly

Chris Stathoulopoulos

If in some about weeks over Amazon, for I looking There there some Airbus squeeze think one two so for last here. was in freighters. I or last the press could out Okay. an article the and XXXs around

even is you. side, flight how from outbound if able point-to-point an something something terms flights is XXX China, about would that from else On of participate something this hub knowing Thank like China; be that? anything you spoke? that is the to without But and work fly is in for and that that it could you in would outbound

John Dietrich

that by asset Amazon. this What don't with we're that the start and saying, and is can my prepared talking about have remarks comment can't in say speak we I I'll ties I'll and speak we capabilities types operating for global here. So, in on

rights could get global player we'd, have but at obviously, and whether are So the involved we route and rights, be XXX. the right to would what a XXX the the traffic we look in

Operator

queue I'm And over questions for time. Atlas to no to in Air hand like showing you. at Worldwide this Thank the the conference closing back I'd further comments.

John Dietrich

Great. operator. your to Thank And questions. you you, really of appreciate thanks to and for all the I opportunity great Spencer engage.

results and our going. we're about where are excited really we're said I and As where we

Our soon. term. appreciate you future look your We the hope long today. you We much. the the to focus with operator. Thanks speaking is we us and stay safe taking again and forward really time families you with you on all so Thank and

Operator

concludes This call. Thank conference your you. today's for Thank you participation.

have day. Everyone disconnect. now wonderful may You a

Atlas Air Worldwide (AAWW) 3 Nov 212021 Q3 Earnings call transcript