Tag: Air Transport Services Group

ATSG sign deal with Qantas and DHL

Air Transport Services Group (ATSG) announced the commencement of new wide-body freighter service for Qantas Freight between Australia and New Zealand, and for DHL between Europe and Africa.

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ATSG reports second quarter results

Air Transport Services Group, Inc. reported a 40 percent increase in second quarter revenues, and a loss for the quarter, principally due to certain unreimbursed overhead expenses as a result of the recent arbitration ruling.
ATSG’s revenues were USD 394.9 million for the second quarter of 2008, compared with USD 281.3 million in the second quarter of 2007, an increase of USD 113.6 million.

Second-quarter DHL revenues from expenses subject to markup decreased 11 percent, as ABX Air operated fewer aircraft and managed fewer facilities for DHL than a year ago.
As previously reported, arbitrators ruled that ABX Air’s general overhead expense, excluding certain corporate costs, should be reimbursed in full with mark-up by DHL through the end of 2007 per the commercial agreements, but reimbursed only in part based on a negotiated allocation formula starting in 2008.

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ABX Air aims for smaller but more profitable post-DHL future

ABX Air is planning for a post-DHL future based on a smaller but more profitable business with other customers.
Joe Hete, President of the airline’s parent company Air Transport Services Group (ATSG), told analysts and investors in a conference call that the company still believed it could offer DHL a competitive model compared to the planned DHL-UPS cooperation, and warned that the connection of the two global air express networks could prove “expensive and challenging”.
Admitting that the transition from DHL operations would not be easy, Hete commented: “We expect ABX to grow and prosper without DHL.” DHL currently accounts for about 74 pct of ABX Air revenues.
ABX Air had already been diversifying its customer base for several years and was well-positioned to place the B767 fleet with other customers on a wet-lease or dry-lease basis, Hete said. About half of the DHL-dedicated B767s could be placed with other customers, he added. Key customers include USPS, the US military and freight forwarder Schenker BAX.
CFO Quint Turner noted that ABX’s activities for DHL had been “low-margin business” and stressed that the company believed it could generate a higher return on capital from other customers. Although ABX has a ‘put’ option to return aircraft to DHL, the planes have a low book value, and higher prices might be achievable if the planes were sold on the open market, executives noted.
ATSG is also talking with DHL about severance packages for ABX pilots and aircraft mechanics.

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