Key Points:

  • Atlas Air Worldwide has ordered two Boeing 777 freighters, set for delivery in 2024, in response to robust international e-commerce shipping demand.

  • The company, which also operates for MSC Air Cargo, has a diverse clientele including Amazon, DHL Express, and the U.S. Department of Defense.

  • Despite a general downturn in the airfreight industry, Atlas Air's expansion contrasts with other cargo operators who are scaling back or postponing fleet additions.

Atlas Air Expands Fleet Amid E-Commerce Growth

NEW YORK — Atlas Air Worldwide has placed an order for two Boeing 777 freighters. This decision, announced on Tuesday, comes as a response to the sustained demand in international e-commerce shipping. The freight market has generally experienced a downturn over the past 18 months, leading many airlines to curtail their expansion plans. However, Atlas Air sees an opportunity in e-commerce, an area exhibiting significant growth. The two newly ordered 777 cargo jets, booked in October, are slated for delivery in the latter half of 2024.

Atlas Air, along with its joint venture Polar Air Cargo, operates a substantial fleet of 116 aircraft. This includes the world's largest fleet of Boeing 747 jumbo freighters and about a dozen 777s. Additionally, the company maintains a selection of passenger aircraft used primarily for charter services. Atlas Air's prominent clients include major players such as Amazon, DHL Express, the U.S. Department of Defense, Alibaba's Cainiao, and Kuehne+Nagel.

Atlas Air's Market Position and Future Outlook

Besides its own operations, Atlas Air also provides services for MSC Air Cargo, a new entrant in the market from Mediterranean Shipping Co., launched in late 2022. Atlas Air had previously ordered these aircraft, branded with the MSC logo, from Boeing in 2021. To date, three of these long-range freighters have been delivered, with the fourth expected in December.

Atlas Air CEO Michael Steen expressed optimism about the new additions, noting the impending retirements of older widebody freighters and limited introduction of new capacity in this segment. The company foresees significant customer interest in the 777 freighters and is confident in securing long-term agreements for them.

Earlier this year, Atlas Air transitioned to a privately held company after a $3.2 billion acquisition led by Apollo Global Management. This move comes at a time when airfreight volumes are noticeably lower than in 2022 and even below the levels of 2019, a particularly weak year for cargo demand.

The current market conditions have also impacted manufacturing and conversion projects in the sector. Boeing, for instance, has seen a significant decrease in freighter orders, with only eight orders this year, including Atlas Air's latest order. This marks a stark contrast to the higher order volumes in previous years. Similarly, aftermarket overhaul specialists are experiencing a downturn in orders, and several cargo operators are either halting or deferring plans to expand their fleets. This context highlights the strategic nature of Atlas Air's decision to invest in new aircraft amid challenging market conditions.