International Finance
Aviation Magazine

Rejuvenated Atlas Air eyes expansion

IFM_ Atlas Air
Atlas Air will become a privately held firm after the acquisition is finished, and its shares will no longer be traded on the Nasdaq

Atlas Air Worldwide offers aircraft and aviation operating services on a global scale. Atlas is the parent company of Atlas Air and Titan Aviation Holdings, and holds the majority stake in Polar Air Cargo Worldwide, with the world’s largest fleet of 747 freighter aircraft.

New faces at the helm

Michael T. Steen took charge as Atlas Air Worldwide’s CEO in June 2023, succeeding John W. Dietrich.

Spencer Schwartz, the Executive Vice President and Chief Financial Officer, will also retire on the same day. Steen has over 30 years of experience in aviation and logistics, including 16 years of executive leadership experience with Atlas. He has served as the Chief Commercial Officer since 2007 and is responsible for leading the company’s strategy and growing its market share. He has also been instrumental in developing and diversifying the company’s roster of blue-chip customers.

“Michael’s leadership experience, strong track record of innovation and success, and consistent focus on the company’s customer-centric mission make him the ideal candidate to lead Atlas forward in its next phase of growth,” says David Siegel, Chairman of the Board.

“On behalf of the Board, we look forward to working closely with Michael to execute Atlas’ strategic growth plans and continue building on the company’s strong commitment to safety, quality, and service excellence,” the official stated further.

Steen remarked, “I am thrilled by the opportunity to lead our incredible Atlas team as we design and execute our vision for growth and embark on new and exciting opportunities as a private company. This is a transformative time for Atlas, and the continued support from Apollo, J.F. Lehman, and Hill City will play an important role as we enhance our capabilities and deliver new solutions for our customers. I am grateful for John’s leadership and look forward to building on this strong foundation of global success. I also thank Spencer for his partnership and contributions throughout his time with the company.”

Dietrich added further, “I am immensely grateful for my time at Atlas over the last nearly 25 years and proud of all that our exceptional team has achieved together. Being part of Atlas’ growth and global expansion has been incredibly rewarding. I know that the company is well positioned to further accelerate its growth and will continue to deliver value for all stakeholders under Michael’s capable leadership.”

Recent takeover

A group of investors, including Apollo Global Management, have fully acquired Atlas Air Worldwide Holdings. Although FlightGlobal claims that the final deal had a value of about $2.9 billion, the deal was initially announced in 2022 August with an equity value of about £3 billion.

Atlas Air will become a privately held firm after the acquisition is finished, and its shares will no longer be traded on the Nasdaq. The company will keep using the name Atlas Air Worldwide.

The Apollo group in charge of the transaction included JF Lehman & Company and Hill City Capital’s investment affiliates. Shareholders of Atlas Air Worldwide will receive a cash payment of $102.50 per share under the deal.

The company, which has its headquarters in New York, declared about receiving all necessary clearances for the transaction in a stock exchange statement on March 14.

President and CEO John Dietrich and the present executive leadership team will continue to run Atlas.

According to Dietrich, the purchase “marks the beginning of an interesting new chapter for Atlas, and we are eager to start our partnership with Apollo, J.F. Lehman, and Hill City.”

“We are in an excellent position to fulfil our expansion goals while continuing to support the increasingly complicated global supply chain thanks to the assistance and resources of our investor partners. I want to thank the Atlas team, whose commitment to the customer’s needs allowed us to reach this milestone. I’m excited about this upcoming stage’s possibilities for our business and team,” Dietrich commented.

“We are excited to partner with the skilled Atlas team and build on the company’s strong foundation as a leader in the air freight industry,” said Chip Frazier, a chief investment officer of Hill City Capital, on behalf of the investor group, which included partners Antoine Munfakh and Jason Scheir of Apollo, Alex Harman of JF Lehman, and Antoine Munfakh and Jason Scheir of JF Lehman.

Although Atlas Air’s profits decreased in the fourth quarter of 2022-23, its revenues increased. If we want to locate a prospective multi-bagger, underlying trends might give indications. Typically, we’ll want to note a rising return on capital employed (ROCE) pattern and an expanding base of capital employed. This shows us that it’s a compounding machine, able to consistently reinvest its revenues into the firm and create better returns.

So when the International Finance Magazine examined Atlas Air Worldwide Holdings and its trend of ROCE, we liked what we observed.

Return of Capital

The critical question is whether Atlas Air is worth investing in and what its return on capital is like.

ROCE measures a company’s yearly pre-tax profit (its return) relative to the capital invested in the firm. Analysts use this formula to calculate it for Atlas Air Worldwide Holdings.

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) (Total Assets minus Current Liabilities) 0.10 = US$551 million (US$6.7 billion minus US$1.2 billion) (based on the trailing twelve months to December 2022).

Thus, Atlas Air Worldwide Holdings has a ROCE of 10.0%. In absolute terms, that’s a poor return, yet it’s about the logistics sector average of 12%.

Even if ROCE is still low in absolute terms, knowing it’s headed in the correct direction is encouraging. The figures demonstrate that in the previous five years, the returns earned on capital employed have climbed dramatically to 10.0%. The firm is making more per dollar of money invested, and in addition to that, 31% more wealth is being employed presently too.

The increasing returns on a growing quantity of cash are frequent among multi-baggers, and that’s why we’re impressed.

To sum it up, Atlas Air Worldwide Holdings has demonstrated it can reinvest in the business and create greater returns on the capital used, which is excellent. Since the stock has returned 74% to owners over the previous five years, investors are beginning to understand these developments. If Atlas Air Worldwide Holdings can keep these trends up, it might have a bright future in the stock market.

The owner of the last 747

Boeing and Atlas Air Worldwide recently celebrated the delivery of the last 747 to its freighter wing, putting to an end over a half-century of production.

Boeing personnel who planned and built the first 747, known as the ‘Incredibles,’ returned to be recognized at the Everett factory, where the voyage of the iconic jumbo jet began in 1967. The factory produced 1,574 aeroplanes over the length of the program.

The CEO of Boeing Commercial Airplanes, Stan Deal, acknowledged the hard work of Boprogram employees who contributed to creating an aeroplane that improved air travel and cargo efficiency.

He considered this day to be an important milestone in aviation history. The final 747-8 Freighter has been delivered to Atlas Air, the biggest 747 operator, where it will continue to inspire innovation and advancement in air cargo.

John Dietrich expressed his gratitude for Boeing’s shared dedication to safety, quality, innovation, and the environment. He also mentioned that Atlas Air has a long history of flying this iconic aircraft for their customers around the world. Atlas Air has covered the world, flying every fleet type of the 747, including the Dreamlifter, Boeing’s 747 Large Cargo Freighter, for the transfer of 787 Dreamliner parts.

As the first twin-aisle aeroplane and “jumbo jet,” the “Queen of the Skies” enabled airlines to connect people across huge distances and conduct non-stop trans-oceanic flights. Its development reinforced Boeing’s role as an industry leader in commercial aviation. The aeroplane’s main design, with its distinctive hump and seating on the upper deck, has charmed generations of passengers and operators alike. Boeing proceeded to improve on the cargo design with variants like the 747-400 in 1988 and the final 747-8 model that debuted in 2005; throughout all the generations, the jet has given unrivalled operating economics and come to the passenger and air freight sectors.

As a significant global aerospace corporation, Boeing develops, manufactures, and maintains commercial aeroplanes, defence goods, and space systems for customers in over 150 countries. As a top U.S. exporter, the company uses the talents of a worldwide supplier base to enhance economic opportunity, sustainability, and community impact.

Boeing’s diverse team is committed to innovating for the future, leading with sustainability, and developing a culture founded on the company’s core values of safety, quality, and integrity.

Atlas Air Worldwide Holdings, a leading provider of outsourced aircraft and aviation operating services, has undergone significant changes in its leadership and ownership.

Also, two other interesting developments have taken place. On one hand, English football giant and European champions Manchester City has reportedly chartered a Boeing 747-400 aircraft, operated by Atlas Air for the team’s pre-season trips to Japan, and South Korea. Also, the airline’s new chief commercial officer Richard Broekman became the venture’s new head of sustainability too.

Apollo Global Management, JF Lehman & Company, and the investment affiliates of Hill City Capital were among the investors who purchased Atlas Air Worldwide Holdings. The acquisition resulted in the company becoming privately held, with its shares no longer traded on the Nasdaq stock market. The addition gives Atlas Air the resources and support to pursue its expansion goals and continue serving the global supply chain. Despite decreased profits in the previous year’s fourth quarter, Atlas Air’s revenues have been increasing.

The company’s return on capital employed (ROCE) has also shown a positive trend over the past five years, with an increase of 10.0%. This indicates that Atlas Air has been able to reinvest its capital and generate better returns, positioning the company for continued growth and potential future success.

Furthermore, Atlas Air has been recognized as the recipient of the final Boeing 747, marking the end of over half a century of production for this iconic aircraft. Atlas Air has a long history of operating various fleet types of 747 and will continue to fly this legendary aircraft for its global customers.

With its new leadership, strong financial performance, and strategic partnerships, Atlas Air Worldwide Holdings is poised for growth and has the potential for a bright future in the airfreight industry.

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