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Atlas Air's 2016 profit soars 468pc to US$41.5 million
IN spite of recording losses in the second and third quarter, Atlas Air Worldwide Holdings Inc's net income soared 468 per cent year on year to $41.5 million in 2016 on revenues of $1.84 billion, up 0.9 per cent year on year.
Profit in the second and third quarter were dragged down by non-deductible expenses related to vested warrants granted to e-commerce giant Amazon.com Inc, reported American Shipper.
The cargo aircraft operator and outsourced services provider in May agreed to dry lease and operate 20 B767-300 freighter aircraft on behalf of Amazon. Under the agreements, Atlas Air operates the converted freighters for Amazon on a crew, maintenance and insurance (CMI) basis on a seven-year term and provides dry leasing through its Titan Aviation leasing unit on a 10-year term.
Amazon was also granted vested warrants to purchase up to 20 per cent (after the issuance) of Atlas Air Worldwide's common shares for $37.50 per share over a period of five years, and additional warrants to purchase up to another 10 per cent over seven years at the same exercise price, which resulted in a $26.2 million one-time expense.
In addition, Atlas in 2016 completed its acquisition of Southern Air Holdings, valued at $110 million, and then sought buyers for Southern Air's Florida West subsidiary. However, it could not find a buyer and closed down operations instead, according to its annual 10-K filing with the US Securities and Exchange Commission (SEC).
"As part of integrating Southern Air, management decided and committed to pursue a plan to sell Florida West," Atlas said. "In February 2017, management determined that a sale was no longer likely to occur and committed to a plan to wind down the Florida West operations. The wind-down of operations is expected to be completed during the first quarter of 2017."
Profit in the second and third quarter were dragged down by non-deductible expenses related to vested warrants granted to e-commerce giant Amazon.com Inc, reported American Shipper.
The cargo aircraft operator and outsourced services provider in May agreed to dry lease and operate 20 B767-300 freighter aircraft on behalf of Amazon. Under the agreements, Atlas Air operates the converted freighters for Amazon on a crew, maintenance and insurance (CMI) basis on a seven-year term and provides dry leasing through its Titan Aviation leasing unit on a 10-year term.
Amazon was also granted vested warrants to purchase up to 20 per cent (after the issuance) of Atlas Air Worldwide's common shares for $37.50 per share over a period of five years, and additional warrants to purchase up to another 10 per cent over seven years at the same exercise price, which resulted in a $26.2 million one-time expense.
In addition, Atlas in 2016 completed its acquisition of Southern Air Holdings, valued at $110 million, and then sought buyers for Southern Air's Florida West subsidiary. However, it could not find a buyer and closed down operations instead, according to its annual 10-K filing with the US Securities and Exchange Commission (SEC).
"As part of integrating Southern Air, management decided and committed to pursue a plan to sell Florida West," Atlas said. "In February 2017, management determined that a sale was no longer likely to occur and committed to a plan to wind down the Florida West operations. The wind-down of operations is expected to be completed during the first quarter of 2017."
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