Wealthy Corrado, chief executive officer and president of ATSG. Photo: ATSG
Lessor ATSG hasn’t seen a dip in demand for freighters despite a difficult first quarter on account of “operating headwinds”.
The Wilmington, Ohio-headquartered firm said its aircraft leasing business Cargo Aircraft Management (CAM) “has seen no reduction in demand for its desirable leased freighters, and continues to speculate with the expectation of delivering attractive returns for the midsize freighter aircraft we expect to lease through the remainder of 2023 and into 2024”.
Results from the CAM segment show aircraft leasing and related revenues from external customers in the primary quarter of 2023 were up 8% in comparison with the primary quarter of 2022.
This primarily reflected “the good thing about eight newly converted Boeing 767-300 freighters leased for the reason that starting of the primary quarter of 2022, offset by lower revenues from engine pooling arrangements for patrons leasing 767-200 freighters”.
CAM deployed two 767-300 freighters to an external customer through the quarter. One 767-200 freighter was returned upon lease expiration.
92 CAM-owned 767 freighter aircraft were leased to external customers at the top of the quarter, six greater than a yr ago.
CAM intends to deploy 18 more freighters in 2023, including 12 767s and 6 Airbus A321s. 27 CAM-owned aircraft were in or awaiting conversion to freighters, 12 greater than a yr ago. The quarter-end total includes nine A321 aircraft and 18 767s.
In a cargo outlook for the remainder of 2023, Wealthy Corrado, president and chief executive officer of ATSG, said that e-commerce and sustainability will drive midsize freighter demand.
He said demand for ATSG’s freighter aircraft stays very strong, including its 767s, the narrowbody A321s, and the A330 freighters the corporate will begin to deploy next yr.
CAM is anticipated to generate greater than $70m in 2024 revenues from freighters it expects to lease this yr.
“Our customers remain desperate to lease the freighter aircraft we intend to deliver,” he said. “The persistent growth in online commerce throughout the world, and the necessity to interchange older, less efficient aircraft types, implies that midsize freighters will remain essential to global economic growth.”
The general business recorded revenues of $501m, up 3% in comparison with the identical quarter last yr, but adjusted EBITDA was down $20m to $138m.
Corrado said: “These results, while disappointing, do reflect the operating headwinds we talked about in February, including lower 2023 results at our airlines.
“The primary quarter Adjusted EBITDA reflected lower than expected passenger airline revenues, and the continued impact of inflation at our airlines.”