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Atlas Air Worldwide profit up 34pc despite US$37 million cartel legal bill

US-based freighter lessor Atlas Air Worldwide Holdings (AAWH) posted a year-on-year 34.1 per cent net profit increase to US$125.3 million.

The gain was attributed to a "solid peak-season volumes and yields supported by continued e-commerce growth" in the fourth quarter.

But there was also a net profit loss of $37.5 million due to a settlement when Atlas unit Polar Air Cargo paid $100 million to plaintiffs in a class action suit over price fixing.

The settlement involved a $35 million payment in January this year, a further $35 million by January 2017 and final instalment of $30 million in 2018.

Otherwise "2015 was a great year", said Bill Flynn, president and chief executive, adding: "We grew earnings substantially, outperforming the air freight market."

Mr Flynn said the company also added to its fleet. "We added a tenth 747-8 freighter, increased our CMI operations by four 767s, returned a 747-400BCF to our growing global charter business, and expanded our dry leasing portfolio to include two 767 aircraft that we will also operate on a CMI basis.

"In addition, we refinanced higher-cost debt on two 747-8s and five 747-400 freighters, enabling us to reduce our cost of debt, increase cash flows, enhance adjusted earnings per share, unencumber these 747-400s, and add flexibility to our fleet."

AAWH, which announced a $110 million takeover of US-based ACMI rival Southern Air in mid-January, said that it began 2016 with "a favourable view about the demand from our customers for our aircraft and services".

Said Flynn: "We believe that the demand we are currently seeing, as well as the benefits we expect from our 2015 fleet initiatives and debt re-financings, provide a foundation for earnings growth this year.

"In addition, our acquisition of Southern Air is expected to increase our adjusted earnings to low- to mid-single-digit percentage growth over 2015," he said.