Looks like another major move by Atlas. Hpoefully this will be another addition to the bottom line. Be interesting to see if we get a good bounce in the stock today. Anyone know why the weakness lately? Reflective of weakness in airlines in general?
Tony
November 12, 1998
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Atlas Air Set to Unveil Agreement
To Fly Planes for Federal Express
By SCOTT MCCARTNEY
Staff Reporter of THE WALL STREET JOURNAL
GOLDEN, Colo. -- Atlas Air Inc., which provides freight flights for airlines, is expected to announce an agreement today to fly three Boeing 747 jumbo jet cargo planes for Federal Express Corp.
The outsourcing deal, valued at more than $30 million in annual revenue for Atlas, is believed to be part of FedEx's strategy to restructure operations to reduce reliance on its own pilots. By contracting some international shipping to low-cost Atlas, FedEx risks further rankling its higher-paid pilots during contentious contract negotiations.
Possible Federal Express Walkout Threatens to Disrupt the Holidays
Federal Express, a unit of FDX Corp., Memphis, Tenn., declined to comment.
Atlas, a six-year-old concern that founder Michael A. Chowdry has built into the world's largest operator of 747 freighters, said service for FedEx would begin in the fourth quarter. Atlas will provide two 747-400 freighters, a 747-200 cargo plane plus crews, maintenance and insurance. The company declined to say how long the FedEx contract would last.
Last year, Atlas provided two planes for extra seasonal lift to FedEx in the fourth quarter and, in 1996, provided one plane for FedEx.
"Atlas has been having discussions with FedEx as a potential customer since our decision to purchase the ultra-long-range, high-payload 747-400," said Mr. Chowdry, who is chairman, chief executive and president of Atlas.
In June 1997, Atlas ordered 10 new Boeing 747-400 cargo planes and took options on another 10.
Atlas has grown rapidly to $400 million in 1997 revenue by offering airlines bulk cargo services at lower cost than the carriers could fly themselves. With low labor costs, a standardized fleet and minimal overhead, Atlas has mimicked in the cargo world what low-cost carriers like Southwest Airlines have done in passenger air service. Current Atlas customers include Alitalia, British Airways and China Airlines.
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