Thursday, November 08, 2007 --  

Atlas Air Worldwide Holdings, Inc. (AAWW) (Nasdaq: AAWW), a leading provider of global air cargo services, today reported substantially higher earnings for the third quarter of 2007 compared with the third quarter of 2006. The strong results reflect an ongoing optimization of assets and operations, the positive impact of Continuous Improvement initiatives, and continued strong demand, particularly in the Commercial Charter segment.

For the quarter, AAWW earned $32.4 million, 357% more than in the third quarter of 2006. Earnings per diluted share equaled $1.50, more than four times the year-ago level. Revenue for the quarter totaled $395.9 million, with operating income of $35.4 million and pretax income of $30.7 million. Net income reflected a tax benefit of $1.7 million that was principally due to a deduction for extraterritorial income related to 2005 and 2006, which resulted in a permanent income tax benefit of $15.4 million, or the equivalent of $0.71 per diluted share, during the quarter.

“Our strong third-quarter performance confirms our strategy of optimizing our asset base, our product mix, and our operations,” said William J. Flynn, President and Chief Executive Officer of AAWW.

He added, “We have taken the necessary steps to optimize our fleet mix and allocation over the last 18 months, which, in combination with our Continuous Improvement initiatives this quarter, has allowed us to grow earnings on a reduced total fleet count. Our focus on operational execution delivered a 4.1% increase in aircraft utilization during the quarter and helped overcome the impact of continuing high fuel prices to produce a 28.8% improvement in EBITDA and a 14.9% improvement in EBITDAR. We also continue to focus on our strategy of realigning our business towards the leasing and outsourcing of new and efficient freighter aircraft as a means to deliver stable, long-term earnings growth.”

Operating income totaled 8.9% of revenues in the third quarter of 2007 compared with 9.1% in the third quarter of 2006, while EBITDA increased to 12.0% of revenues versus 10.2%, and EBITDAR improved to 21.9% of revenues from 20.9%. Operating income in the third quarter of 2006, however, benefited from a $6.3 million gain on the sale of aircraft. Adjusting for this item, operating income increased 32.9% in the latest quarter, while operating margin improved to 8.9% from 7.4% in the year-ago period.

Average utilization of operating aircraft on a block-hours-per-day basis increased 4.1% during the quarter compared with the year-ago quarter on a flat operating fleet. On a total fleet basis, operating income per aircraft increased 19.2% to $0.956 million, with EBITDA per aircraft rising 42.7% to $1.3 million and EBITDAR per aircraft rising 27.4% to $2.3 million. Adjusting for the third-quarter 2006 gain on sale of aircraft, operating income per aircraft increased 47.3%.

Continuous Improvement initiatives contributed approximately $15.0 million of cost savings to AAWW's third-quarter results. In addition to savings and efficiency improvements in maintenance, fuel, procurement and inventory, AAWW is beginning to realize benefits from longer lead-time projects which reduce aircraft down-time, lower cargo and ramp handling costs, and improve productivity. By year-end 2007, the Company expects to realize in excess of $65.0 million in annualized savings, and the Company is on track to exceed its goal of $100 million of annualized savings in 2008.

Mr. Flynn noted, “We are looking ahead to strong fourth quarter and full-year 2007 results. We expect that our full-year pretax earnings will exceed $130.0 million, well above pretax earnings of $93.8 million in 2006 and above $123.8 million in 2005.

“In late October 2008, we will begin providing express network ACMI service to DHL Express through Polar Air Cargo Worldwide. The commencement of our blocked-space agreement with DHL is expected to improve the profitability<