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While Cargo Airline Plans December Filing, It Sees Profits In 2004
One of the largest cargo airlines, Atlas Air Worldwide Holdings [OTC: AAWH], plans to file a pre-negotiated bankruptcy in December.
Overwhelmed with debt and a declining demand for air cargo services, the Purchase, N.Y. parent of Atlas Air and Polar Air Cargo, has been negotiating with its lessors and creditors since March. In a filing with the Securities and Exchange Commission earlier this month, the company outlined a plan to return to profitability next year.
The holding company lost an estimated $36 million on $1.1 billion in revenue in 2002. Atlas Air lost $4.4 million while Polar Air had an operating profit of $113,000. The holding company projects losing another $16.7 million this year on revenue of $1.4 billion.
"In a word we have too much debt," said company spokesman Thomas Becher. "The company grew very rapidly in the late 90s. There were times when we were doing a lot of things to get business. We were growing and we wanted to be No. 1 in that niche. There are probably some things that we would not do today."
Atlas Air is a "wet lease" company. Under aircraft, crew, maintenance and insurance (ACMI) contracts, Atlas Air provides turnkey operations for its clients. Polar Air operates scheduled air freight routes around the world. Atlas Air Worldwide also provides commercial and military charter services.
"They were getting into trouble because they were leasing their planes for less than their costs and they did not know it," said David Campbell, an analyst with Richmond-based Thompson Davis. "There is no comparable...