PURCHASE, NY: November 03, 2016. Atlas Air Worldwide Holdings (AAWF) reported a loss of US$7.94 million on revenue of US448 million for its third quarter ending September 30. Net income for the first nine months of 2016 was US$13.09 million on revenue of US$1.30 billion.
The company said the Q3 result was prompted by non-deductible expenses of US$26.2 million following shareholder approval in September of warrants for Amazon "to acquire up to 30 percent of the company".
The warrants are part of the long-term agreement announced earlier this year between AAWF and Amazon that includes the lease and operation of 20 B767-300 converted freighters in support of Amazon's package delivery services.
A "substantial" share of the aircraft acquisition and conversion costs will be financed by AAWF as they are put into service with Amazon. President and CEO William Flynn added: "We placed our first aircraft into service for Amazon in August (right), and we moved forward with preparations to ramp up to 20 by the end of 2018.
"The agreements also provide for future growth of the relationship as Amazon may increase its business with the company," he noted.
Declaring a strong belief in the future of airfreight, express and eCommerce, Flynn said AAWF expected this year's peak-season demand to be "solid" with an improvement in yields. However despite the Hanjin Shipping bankruptcy, the company "did not observe any noticeable impact on airfreight demand or rates" during the last quarter.
Amazon reported net income of US$252 million on a 29 percent increase in net sales to US$32.7 billion for its third quarter ending September 30. The company also announced it will spend €80 million to build a 50,000 square meter logistics center in Germany’s Frankenthal region of Rhineland-Palatinate by the end of 2017.