ATSG Provides Outlook for Fleet Transitions in 2023 and Beyond
February 06 2023 - 6:00AM
Business Wire
Air Transport Services Group, Inc. (Nasdaq:
ATSG) today provided outlook guidance for changes in its operating
fleet of cargo aircraft. The guidance is in anticipation of
meetings that ATSG executives will hold with investors on February
7, 2023, at the Stifel Transportation and Logistics Conference in
Amelia Island, Florida.
At the conference, ATSG will maintain guidance provided on
November 3, 2022, for full-year 2022 Adjusted Earnings Before
Interest, Taxes and Depreciation. Fourth quarter and full year 2022
results will be announced in late February 2023.
Regarding its outlook for cargo aircraft leases and subsidiary
airline operations in 2023 and beyond, ATSG expects to:
- Through its Cargo Aircraft Management (CAM) subsidiary,
complete the passenger-to-freighter conversion and deliver fourteen
Boeing 767-300 freighter aircraft in 2023 and sixteen in 2024, most
of which will be leased to customers based outside the United
States.
- Complete the passenger-to-freighter conversion and deliver at
least six Airbus A321-200 cargo aircraft to fulfill lease orders
from customers based in Europe and Asia. A similar number of Airbus
A321-200 cargo conversions and deliveries are anticipated in 2024.
Deliveries and dry leases, however, are pending regulatory review
by the European Union Aviation Safety Agency (EASA). ATSG
anticipates EASA approvals for the A321-200 design it developed via
a joint venture before mid-year 2023.
- Begin the passenger-to-freighter conversion of what it expects
to become a leased fleet of thirty Airbus A330-300s, equal to the
number for conversion slots it holds. CAM expects to begin leasing
A330 freighters in 2024 and continuing into 2028. It has already
received customer commitments to lease more than two thirds of
those A330 freighters, which are medium widebody aircraft that
perform regional missions, but with greater payload and range than
Boeing 767-300 freighters.
- Continue to lease into 2024 four of twelve Boeing 767-200
freighters currently leased to Amazon and operated by ATSG’s cargo
airlines. Leases for the other eight are due to expire between May
and September 2023. CAM expects to retire at least three of the
eight due to airframe cycle limitations and utilize the engines
removed to support other 767-200 lease customers. CAM expects to
re-lease and/or sell the remaining five 767-200 freighters which
Amazon may not extend.
- Operate 767 freighters dedicated to principal customers DHL and
Amazon for reduced schedules and fewer block hours per aircraft
across the United States in the first half of 2023 versus 2022.
Both companies are adjusting their ground and air distribution and
fulfillment networks in the United States to conform to reduced
U.S. economic growth and consumer spending levels in the first half
of 2023. ATSG’s passenger aircraft operations are likely to face
similar effects.
Rich Corrado, president and CEO of ATSG, said, “Despite the
macroeconomic headwinds, we expect moderate Adjusted EBITDA growth
for ATSG in 2023, reflecting the resilience of our business model.
Demand to lease the newly converted freighter types we offer
remains as strong as ever. The entry into new Airbus platforms
along with the significant increase in leasing deliveries will
increase our capital expenditures above 2022 levels. But clearly,
2023 will be a transition year for us, due to both a changing mix
of leased freighters in service, and changes in flight schedules
from customers of our U.S. airlines. I look forward to sharing our
outlook for 2023 in more detail when we report our fourth-quarter
2022 earnings results in late February.”
About ATSG
ATSG is a leading provider of aircraft leasing and cargo and
passenger air transportation and related services to domestic and
foreign air carriers and other companies that outsource their cargo
and passenger airlift requirements. ATSG, through its leasing and
airline subsidiaries, is the world's largest owner and operator of
converted Boeing 767 freighter aircraft. Through its principal
subsidiaries, including three airlines with separate and distinct
U.S. FAA Part 121 Air Carrier certificates, ATSG provides aircraft
leasing, air cargo lift, passenger ACMI and charter services,
aircraft maintenance services and airport ground services. ATSG's
subsidiaries include ABX Air, Inc.; Airborne Global Solutions,
Inc.; Airborne Maintenance and Engineering Services, Inc.,
including its subsidiary, Pemco World Air Services, Inc.; Air
Transport International, Inc.; Cargo Aircraft Management, Inc.; and
Omni Air International, LLC. For more information, please see
www.atsginc.com.
Except for historical information contained herein, the matters
discussed in this release contain forward-looking statements that
involve risks and uncertainties. A number of important factors
could cause Air Transport Services Group, Inc.'s ("ATSG's") actual
results to differ materially from those indicated by such
forward-looking statements. Such factors include, but are not
limited to: (i) the extent to which changes in market conditions
impact the number, timing, and scheduled routes of aircraft
deployments to new and existing customers; (ii) the cost and timing
with respect to which we are able to purchase and modify aircraft
to a cargo configuration, which may be impacted by global supply
chain disruptions; (iii) our operating airlines' ability to
maintain on-time service and control costs; (iv) our ability to
remain in compliance with key agreements with customers, lenders
and government agencies; (v) persistent elevated rates of inflation
and changes in general economic and/or industry-specific conditions
such as higher labor costs, increases in interest rates, an
economic recession, and downturns in customer business cycles; (vi)
the impact arising from COVID-19 outbreaks, including the emergence
of COVID-19 variants; (vii) mark-to-market changes on certain
financial instruments; and (viii) other factors that are contained
from time to time in ATSG's filings with the U.S. Securities and
Exchange Commission, including its annual report on Form 10-K and
quarterly reports on Form 10-Q. Readers should carefully review
this release and should not place undue reliance on ATSG's
forward-looking statements. These forward-looking statements were
based on information, plans and estimates as of the date of this
release. Except as may be required by applicable law, ATSG
undertakes no obligation to update any forward-looking statements
to reflect changes in underlying assumptions or factors, new
information, future events or other changes.
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version on businesswire.com: https://www.businesswire.com/news/home/20230206005274/en/
Quint O. Turner, ATSG Inc. Chief Financial Officer
937-366-2303
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