PPRuNe Forums - El Al & Atlas Air

WASHINGTON, Aug 10 (Reuters) - Evergreen International Airlines and Gemini
Air Cargo want the U.S. to deny Atlas Air a second set of U.S.-Brazil route
rights through its $84 million purchase of Polar Air Cargo.
Atlas and Polar are two of the four U.S. all-cargo carriers with U.S.-Brazil
scheduled services.

Atlas has applied to the Department of Transportation (DOT) to have all
international route authorities possessed by Polar transferred to its name.

However, Evergreen says in a DOT filing that transferring the Polar route
rights would give Atlas/Polar 14 of the 24 weekly Brazil frequencies
allocated to U.S. all-cargo carriers.

It would be against the public interest to approve the transfer because it
would let Atlas/Polar dominate a limited-entry market, says Evergreen.

Atlas/Polar is a different proposition than the Fine Air Services/Arrow Air
consolidation in which the merged entity kept both airlines' U.S.-Ecuador
designations, says Evergreen.

In Fine/Arrow, that represented only a third of U.S.-Ecuador frequencies.

The U.S. is allowed four all-cargo airlines in the U.S.-Brazil market. Were
Atlas and Polar to merge, there would be no question of it keeping two
carrier designations in the Brazil market, Evergreen said.

The fact Atlas intends to keep Polar as a separate company should not
qualify it to keep both Brazil designations.

"Polar, as the carrier being acquired, should therefore be required to
relinquish its U.S.-Brazil designation and its four frequencies," said
Evergreen.

Gemini seeks a different remedy to get a similar result.

Gemini was designated by the DOT as backup carrier should Atlas not use all
of its 10 frequencies in the timeframe set out by U.S. rules.

Gemini is asking the DOT to strip Atlas of its 10 frequencies and activate
Gemini's backup designation. Alternatively, it would accept de-activation of
Polar's designation and four frequencies so long as Gemini inherited them.

Currently, Atlas is operating three of its 10 weekly frequencies.

10 Aug 2001 - 11:23
Atlas Air says customers behind Polar acquisition
By David Gersovitz

TORONTO, Aug 10 (Reuters) - Atlas Air Worldwide Holdings said its $84
million acquisition of Polar Air Cargo has been well received by customers
even though Polar competes with some of them.

Atlas also said it is expecting Polar to become a near break-even operation
shortly after the acquisition is completed.

Atlas, based in Purchase, New York, provides a worldwide customer list with
long-term ACMI charters. Polar of Long Beach, California, is a scheduled
cargo airline.

Earlier this week, a LanChile cargo executive said the Polar acquisition
could have a bearing on his airline's relationship with Atlas.

LanChile has returned one of three Boeing 747-200 freighters it wet-leased
from Atlas. It may return another at the end of 2001, depending in part on
"the future approach and marketing plans of Atlas-Polar in our region,"
Claudio Silva, vice president of Lan Chile's North American cargo operations
told Reuters.

However, Atlas said in written responses to questions from Reuters on
Thursday that customer reaction to the all-cash takeover of financially
troubled Polar has been "very positive overall."

"It is not our intention to do anything in the transaction that would be
detrimental to our customers," the company said. "We've assured them of that
and they are satisfied regarding our plans...

"(They) see the potential for new business opportunities through our
acquisition of Polar," it added.

Despite $26.5 million in losses in the first quarter of 2001, Polar should
be profitable in 2002, said Atlas.

As part of the $84 million cash sale, GE Capital Aviation Services (GECAS),
Polar's owner, agreed to eliminate all of Polar's debt.

GECAS renegotiated leases on Polar's 747 freighters to market rates, and
Polar's eight 747-100s are being permanently removed from the fleet.

That will leave Polar with nine active B-747s, including five 747-400s.

"We expect that Polar will begin to show a profit in 2002 and should be
close to break-even shortly after the acquisition is completed," said Atlas.

Atlas has made no secret of the fact that the acquisition of Polar's
U.S.-Japan route rights and 16 weekly Narita Airport takeoff and landing
slots was a key factor in the transaction.

Polar has two more 747-400s on order - one for delivery in October, the
second in July 2002. Atlas has four on order for 2002 delivery.

"The orders haven't been changed due to the acquisition," Atlas said.

The current plan is to maintain separate Polar and Atlas brands and
operations, with no merger occuring in any way, Atlas said.

All of the job losses resulting from the downsizing of Polar will occur at
Polar. Atlas employees will not be affected.

However, the two airlines could engage in functions like joint purchasing
without merging any operations, Atlas said.

(( Air Cargo newsroom, +44 20 7542 7706 fax +501

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