'A different company' – Atlas Air CEO unveils carrier's express operator ambitions

Atlas is changing. So said CEO Bill Flynn at yesterday’s investor meet in the Nasdaq headquarters.

Diversification has always been one of Atlas’s strengths – and it has not ignored the opportunities available in the ever-growing e-commerce and express business.

While many airlines turn circles trying to work out how to capitalise on these growth areas, Atlas has gradually – but firmly – steered its business towards the international express market – the last sector where there still appear to be boundless opportunities.

Atlas can no doubt do it, but you won’t hear much focus from it on pharma, or horses, or whatever the product of the day is at the combination carriers, who are held back in cargo by the necessities of their passenger operations.

By being a full freighter airline, Atlas has the flexibility (as well as the financial muscle) to meet the opportunities.

Of course, much of the investor day was one big advertisement to make Atlas investors feel confident that their money will be safe – and grow. But among all the marketing was a clear vision of a move into the e-commerce field.

“We are moving away from heavy freight and into the integrator, express and e-commerce market,” said Mr Flynn. “We are becoming a different company.”

With its biggest customer, DHL, and Amazon waiting in the wings, Atlas also operates for FedEx and UPS. Already, 47% of its widebody fleet and all its medium-sized aircraft are supporting the express market.

The carrier has placed another five aircraft with DHL Express, and while it has also garnered new deals with El Al and Latam, it is the disruptive element of e-commerce that clearly excites it most.

CCO Michael Steen outlined how supply chains were changing: from a 15- to 30-day delivery time in traditional retail supply chains by air, to one to ten days in online retailing. And while noting that there had already been huge growth in e-commerce, Mr Steen said that in most markets, it had so far been dominated by domestic operations. That left room for growth internationally.

“We see massive growth opportunities in the US and globally. Air freight and dedicated freighter networks will become core operations in this sector,” he said.

He added that Atlas customers were actively looking to expand in the potentially huge markets of India and China.

“The next big e-commerce battleground is in India. It is forecasted to grow to $220bn by 2025, with 35% CAGR over the next 10 years.

“Supply chain requirements are changing very fast – Amazon and Alibaba are building their own transport networks, which shows that the market is changing. And India’s transport structure is being rapidly developed.”

And Atlas, purely through the might and knowhow of its customers – who presumably will do the hard, and risky, work of developing the right networks – will be there to capitalise on the growth, merely by providing assets and operations, at limited risk. It’s a good place to be.

The only fly in the ointment is Atlas’s relations with pilots, who protested outside the event.

It is hard to understand why a company which describes itself as “second to none” and “committed to the highest levels of safety”, while also acknowledging “rumblings of pilot shortages”, would not make itself the very best cargo operator there is, by giving its pilots something to crow about too.