ATLAS buys POLAR
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ATLAS buys POLAR
Atlas Air Worldwide Holdings, Inc. to Acquire Polar Air Cargo
Gains Access to Japan
PURCHASE, NY--(BUSINESS WIRE)--July 12, 2001--Atlas Air Worldwide Holdings, Inc. (NYSE:CGO - news) announced today that it has entered into an agreement with an affiliate of GE Capital Aviation Services, Inc. (GECAS), a wholly owned subsidiary of the General Electric Company (NYSE:GE - news), to acquire Polar Air Cargo for a stated purchase price of $84 million. Agreements to monetize assets and arrangements to place surplus aircraft, restructure leases and financing commitments of GECAS are expected to reduce the effective net cost of the acquisition by $25 million to $30 million. Atlas Air Worldwide Holdings, Inc. will acquire Polar Air Cargo free of any debt, with restructured aircraft operating leases, and will operate it with a resized fleet. The resized fleet of primarily B747-400 aircraft is expected to be fully utilized in scheduled service.
Polar Air Cargo specializes in time-definite, cost-effective airport-to-airport scheduled airfreight service. Its fleet is comprised exclusively of Boeing 747 freighter aircraft. The company's scheduled route network serves all of the world's major economic regions, with significant international route authorities in key markets around the world that have been acquired over the last eight years.
Atlas Air Worldwide Holdings, Inc. is the parent company of Atlas Air, Inc., a United States certificated air carrier that operates a fleet of B747 freighters under ACMI contracts. These contracts include the provision of Aircraft, Crew, Maintenance and Insurance for some of the world's leading international carriers. Polar and Atlas Air will be operated as separate subsidiaries of the parent company. Polar will maintain its operations from its Long Beach, CA headquarters for the immediate future.
Completion of the acquisition is subject to receipt of certain regulatory approvals and other customary closing conditions.
"In meeting the current challenging economic environment, we have initially focused on sizing our existing operations appropriately to ensure that we emerge an even stronger and more efficient company when demand begins to improve. We are now turning our attention to strengthening our position in the industry through strategic opportunities,'' said Richard Shuyler, Chief Executive Officer for both Atlas Air Worldwide Holdings, Inc. and Atlas Air, Inc. "With its valuable route authorities and its similar fleet of B747 freighter aircraft, Polar offers a strong fit - and a significant opportunity. Combined with Atlas Air Worldwide Holding's financial discipline and industry expertise, this acquisition will allow both companies to offer complementary services to their separate customer bases.
"While we plan to keep the Atlas Air and Polar brands separate, we expect to achieve significant synergies between the two companies. More importantly, however, this transaction will give us access to the Japanese market - a market we have sought to enter since Atlas Air's inception - and beyond to other points in Asia. Tokyo is the world's fourth largest freight market, and operating rights there are greatly sought after and highly restricted. Gaining Polar's substantial rights there is of tremendous value to us. We expect that our shareholders will see revenue and earnings per share benefits from this acquisition as early as next year,'' Shuyler added.
"We welcome Polar Air Cargo to the Atlas Air Worldwide Holding family. We see tremendous opportunities to continue to grow our business, synergistically pursue new market opportunities and further expand strategic partnerships as we continue to build a world-class company of which we all can be proud,'' Shuyler concluded.
Gains Access to Japan
PURCHASE, NY--(BUSINESS WIRE)--July 12, 2001--Atlas Air Worldwide Holdings, Inc. (NYSE:CGO - news) announced today that it has entered into an agreement with an affiliate of GE Capital Aviation Services, Inc. (GECAS), a wholly owned subsidiary of the General Electric Company (NYSE:GE - news), to acquire Polar Air Cargo for a stated purchase price of $84 million. Agreements to monetize assets and arrangements to place surplus aircraft, restructure leases and financing commitments of GECAS are expected to reduce the effective net cost of the acquisition by $25 million to $30 million. Atlas Air Worldwide Holdings, Inc. will acquire Polar Air Cargo free of any debt, with restructured aircraft operating leases, and will operate it with a resized fleet. The resized fleet of primarily B747-400 aircraft is expected to be fully utilized in scheduled service.
Polar Air Cargo specializes in time-definite, cost-effective airport-to-airport scheduled airfreight service. Its fleet is comprised exclusively of Boeing 747 freighter aircraft. The company's scheduled route network serves all of the world's major economic regions, with significant international route authorities in key markets around the world that have been acquired over the last eight years.
Atlas Air Worldwide Holdings, Inc. is the parent company of Atlas Air, Inc., a United States certificated air carrier that operates a fleet of B747 freighters under ACMI contracts. These contracts include the provision of Aircraft, Crew, Maintenance and Insurance for some of the world's leading international carriers. Polar and Atlas Air will be operated as separate subsidiaries of the parent company. Polar will maintain its operations from its Long Beach, CA headquarters for the immediate future.
Completion of the acquisition is subject to receipt of certain regulatory approvals and other customary closing conditions.
"In meeting the current challenging economic environment, we have initially focused on sizing our existing operations appropriately to ensure that we emerge an even stronger and more efficient company when demand begins to improve. We are now turning our attention to strengthening our position in the industry through strategic opportunities,'' said Richard Shuyler, Chief Executive Officer for both Atlas Air Worldwide Holdings, Inc. and Atlas Air, Inc. "With its valuable route authorities and its similar fleet of B747 freighter aircraft, Polar offers a strong fit - and a significant opportunity. Combined with Atlas Air Worldwide Holding's financial discipline and industry expertise, this acquisition will allow both companies to offer complementary services to their separate customer bases.
"While we plan to keep the Atlas Air and Polar brands separate, we expect to achieve significant synergies between the two companies. More importantly, however, this transaction will give us access to the Japanese market - a market we have sought to enter since Atlas Air's inception - and beyond to other points in Asia. Tokyo is the world's fourth largest freight market, and operating rights there are greatly sought after and highly restricted. Gaining Polar's substantial rights there is of tremendous value to us. We expect that our shareholders will see revenue and earnings per share benefits from this acquisition as early as next year,'' Shuyler added.
"We welcome Polar Air Cargo to the Atlas Air Worldwide Holding family. We see tremendous opportunities to continue to grow our business, synergistically pursue new market opportunities and further expand strategic partnerships as we continue to build a world-class company of which we all can be proud,'' Shuyler concluded.
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The beginning of the end, or the end of the beginning? I opt for te first...
I guess now ALPA has to put a very big foot in Mr. Suyler's door and kick hard. And I start to understand why they did get rid of mainline Atlas pilots, as they would have enough woth Polar's...
I guess now ALPA has to put a very big foot in Mr. Suyler's door and kick hard. And I start to understand why they did get rid of mainline Atlas pilots, as they would have enough woth Polar's...
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I bet this caught more than a few guys "off guard".
I for one, thought Atlas was more in a survival mode: Parking planes, laying off crews and the former "A" rated stock way down.
Yet it makes sense: Polar is a Common Carrier, entry to the Japanese market etc.
As the Polar pilots already have an ALPA contract, perhaps this will be way for Atlas managment to save face and give the boys a pay increase? Even conditions across the board? (Or Polar guys taking a pay cut?)
Wonder what they will call the new combo:
Potlas..?
I for one, thought Atlas was more in a survival mode: Parking planes, laying off crews and the former "A" rated stock way down.
Yet it makes sense: Polar is a Common Carrier, entry to the Japanese market etc.
As the Polar pilots already have an ALPA contract, perhaps this will be way for Atlas managment to save face and give the boys a pay increase? Even conditions across the board? (Or Polar guys taking a pay cut?)
Wonder what they will call the new combo:
Potlas..?
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Certainly not surprising in todays' depressed aircargo market. Wonder what will happen to AACS? As the contentious management has been away from Polar for sometime, this deal just might work. Suspect that all of the B747 classics will be disposed of in the combined companies, leaving the -400 eventually as their only aircraft type.
Time will tell.
Time will tell.
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Seems like a lot of pessimism here, when the deal won't even close until 4Q 2001 some time...
OTOH, it does portend a good dose of doom & gloom for current Polar guys -- the "monetiz[ation]" of Polar assets probably means Atlas only wants Polar's route authority and the -400s, NOT any -100s, -200s, or debt. Byt the time Polar comes under Atlas Worldwide Holdings, it will likely be MUCH smaller than it is now.
As for the ALPA equation, if Polar is retained as a totally independent wholly-owned subsidiary of AWH, just as is Atlas Air (technically, though there is no effective division of AWH and Atlas Air right now), the 2 sepaeate ALPA contracts will likely remain intact and separate. Scope clauses on both contracts will be VERY closely scrutinized!
OTOH, it does portend a good dose of doom & gloom for current Polar guys -- the "monetiz[ation]" of Polar assets probably means Atlas only wants Polar's route authority and the -400s, NOT any -100s, -200s, or debt. Byt the time Polar comes under Atlas Worldwide Holdings, it will likely be MUCH smaller than it is now.
As for the ALPA equation, if Polar is retained as a totally independent wholly-owned subsidiary of AWH, just as is Atlas Air (technically, though there is no effective division of AWH and Atlas Air right now), the 2 sepaeate ALPA contracts will likely remain intact and separate. Scope clauses on both contracts will be VERY closely scrutinized!
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This deal has been on the cards for some time now. It was a case of merge or have both carriers beat each other to death.
As the acquiring company, ATLAS' work practices would be paramount, I'd assume ... and that would include the non-ALPA situation!
However, moving out of one's core competency (ACMI leases in the case of ATLAS) is never a really great idea ... especially bearing in mind that Polar's loads have been well down over the last few months.
I think this will be interesting!
As the acquiring company, ATLAS' work practices would be paramount, I'd assume ... and that would include the non-ALPA situation!
However, moving out of one's core competency (ACMI leases in the case of ATLAS) is never a really great idea ... especially bearing in mind that Polar's loads have been well down over the last few months.
I think this will be interesting!
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It must pointed out that the mainline Atlas pilots still do not have a contract, and a legal strike still may be looming on the horizon for Atlas. The question is begging to be asked, is this just another attempt to bust not one but two alpa pilot union groups with one neat little manuver. This is looking more like the Eastern and Continental deal every day, move the assets and run with the money. There is something rotten in Denmark here?
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Unfortunately, I think we'll see a lot of Polar pilots departing because the 747-100's and some/most of its 747-200's are superfluous - Atlas already had the intention of reducing its own 747-200 fleet because of the aircraft's more-limited range capability.
If I were a Polar pilot, I'd be looking at Jetblue (fast-growing and profitable A320 operator out of JFK and soon Long Beach). Jetblue could potentially be the next Southwest and cover the US. Plus, those A320s are a lot nicer to fly than junky 747-100s...
Good luck to all pilots involved!
If I were a Polar pilot, I'd be looking at Jetblue (fast-growing and profitable A320 operator out of JFK and soon Long Beach). Jetblue could potentially be the next Southwest and cover the US. Plus, those A320s are a lot nicer to fly than junky 747-100s...
Good luck to all pilots involved!
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You can ban me from using this forum, but
let's call a shylock a shylock. Atlas CEO
Schuyler is a snake of the worst kind. He and
his merry band golden parachute makers. I can guarantee when this goatrope is all said
and done, I'll bet sure as hell as there are
zits on my ass, that prick and the rest of his idiots will having a jolly nice meeting with their accountants. Shuyler is living proof that the Devil at one time mated with
babboons!!
let's call a shylock a shylock. Atlas CEO
Schuyler is a snake of the worst kind. He and
his merry band golden parachute makers. I can guarantee when this goatrope is all said
and done, I'll bet sure as hell as there are
zits on my ass, that prick and the rest of his idiots will having a jolly nice meeting with their accountants. Shuyler is living proof that the Devil at one time mated with
babboons!!
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Polar ALPA got a crap contact and bargained under the cloud of insolvency. I don't think Atlas pilots will settle for anything as weak as the Polar contract. Polar's 100's are junk and the 200s have Pratt engines, I think - non-common with Atlas. I really don't see what Atlas wants with Polar, as a company entity - just maybe some of the "stuff" like routes and the 400s.
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Unfortunately it looks like all that will be left of Polar Air Cargo is their 400s. Atlas doesn't need nor want any of the other aircraft. As stated in the previous post, they are mostly junk. If the need for a 200 came up I'm sure it would be one of the recently parked Atlas aircraft that would be put on the contract. Ultimately I think the plan will be to operate the company with solely the 747-400s.
It's a shame it has to end this way, there are lots of good people there and I wish them all the best of luck.
It's a shame it has to end this way, there are lots of good people there and I wish them all the best of luck.
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Hey, Lavdumper:
Jet Blue is OK if you can stomach a huge pay cut. Start at USD 45/Hr, with a commute to JFK, and for that you'll be working your balls off; 75+ hours per month, multiple short legs.
But it's better than working at Home Depot.
Cheers.
Jet Blue is OK if you can stomach a huge pay cut. Start at USD 45/Hr, with a commute to JFK, and for that you'll be working your balls off; 75+ hours per month, multiple short legs.
But it's better than working at Home Depot.
Cheers.
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Guv:
There was no way Polar was going to "beat [Atlas] to death"! Polar was already close to insolvency, and only constant infusions of cash from GE Capital kept them afloat. They could only compete by continuing to operate at a loss. Apparently, GEC decided to cut loose, write off the sunk costs, and go back to lending money.
OTOH, with Polar sinking and an ex GE executive as Atlas Chairman, the deal was indeed no surprise, if not predictable.
Also, this deal allows Atlas (or Polar, at Atlas/GEC direction) to take some of the "oversupply" of lift capacity off the market by parting out the old, inefficient, and CHEAP -100s. They might even choose to part out some of the -200s (especially the Pratt-powered ones), just to keep any competitors from getting them!
One of the few things yet to be seen is whether Atlas can make Polar profitable with its smaller size, and still keep it as an "independent" subsidiary with all its duplicated operations and maintenance functions. I'm REALLY skeptical there!
There was no way Polar was going to "beat [Atlas] to death"! Polar was already close to insolvency, and only constant infusions of cash from GE Capital kept them afloat. They could only compete by continuing to operate at a loss. Apparently, GEC decided to cut loose, write off the sunk costs, and go back to lending money.
OTOH, with Polar sinking and an ex GE executive as Atlas Chairman, the deal was indeed no surprise, if not predictable.
Also, this deal allows Atlas (or Polar, at Atlas/GEC direction) to take some of the "oversupply" of lift capacity off the market by parting out the old, inefficient, and CHEAP -100s. They might even choose to part out some of the -200s (especially the Pratt-powered ones), just to keep any competitors from getting them!
One of the few things yet to be seen is whether Atlas can make Polar profitable with its smaller size, and still keep it as an "independent" subsidiary with all its duplicated operations and maintenance functions. I'm REALLY skeptical there!
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Since Atlas has been making noise about getting into the freight forwarding biz, buying Polar and killing it eliminates a competitor and it gets some more 400s. As for the 100s and 200s - the chainsaw. As for the crews? Beats me. Does anybody know what the successorship clause in their contract reads? My guess is that they'll furlough the classic crews as the airplanes are phased out. When the Atlas 200/300s go back in service this fall, the Polar crews may/could take up the slack in the horrendous F/O attrition of the past year - depending on the ALPA contract provisions. If Atlas bought Polar for a song, it makes sense. Atlas still has lots of cash, methinks.
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Do I feel some optimism from some pilots out here? I would not be optimistic, if smells the Eastern/Continental here. Who tells us it was not a 'you buy my company or I close you down by not giving you better lease rates-deal' from GE? You never know in the world of the top-echelons.
Let's look at some facts here:
- Polar is in the direct sales business. They have their agents and sales people selling the capacity of an airplane, not the time of the aiplane to fly. Presently, due to their rather minimal service, Polar has huge problems. But they are not much bigger than the problems they had since their beginning. Trouble in that business is, that you cannot afford to fly half empty more than once a year on each route. After that you can fill the aircraft to the top each flight and still just recover. The difference to recent years now is, that GE is not willing to further pour money into the system (paralell to SR/SN here???) Polar is for sale since three years, and finally GE found someone stupid enough to take it over. Michael would not have done it!
- Atlas is clearly in the ACMI business. The only risk you have is, that your customer gives a plane back, as the market is bad. So you might have some problems to have all your fleet in the air. It can be tough, but the business as such is rather straightforward. But now, separate company or not is no factor, Atlas is going to compete against it's own customers. I want to see Stan Wraight's face when his next customer tells him that the contract is off as they (Atlas) are the direct competition. My prediction: all their customers will do that. And believe me, direct sales is enormously more difficult than ACMI.
- So what will happen? Atlas is going to have to fly on it's own account, will lose all it's ACMI customers (as direct competition is a definite NO GO) and go bust. The route to Japan is worth ZERO. Japan since three years is in s downward deflationary spiral and will take a very long time to recover. Freight yields are falling rapidly as everyone wanted to get in there, but now capacities are much bigger than demand. They don't know how to deal with Asian forwarders, they don't know about the loyalty of Indian forwarders, Thai forwarders, Cinese forwarders to their carrier. If you don't believe me, check Eagle!!! And the Atlantic is dead, yieldwise. SOuth America is a small market, you cant move more than 15 airplanes in total there, and the compatition is fierce.
They will fly empty, and this is soemthing even the Atlas cash reserve (if it still exists by then) is not going to survive longer than a 3 to 4 months.
If I were an Atlas of Polar pilot, i'd run as fast as I can.
Let's look at some facts here:
- Polar is in the direct sales business. They have their agents and sales people selling the capacity of an airplane, not the time of the aiplane to fly. Presently, due to their rather minimal service, Polar has huge problems. But they are not much bigger than the problems they had since their beginning. Trouble in that business is, that you cannot afford to fly half empty more than once a year on each route. After that you can fill the aircraft to the top each flight and still just recover. The difference to recent years now is, that GE is not willing to further pour money into the system (paralell to SR/SN here???) Polar is for sale since three years, and finally GE found someone stupid enough to take it over. Michael would not have done it!
- Atlas is clearly in the ACMI business. The only risk you have is, that your customer gives a plane back, as the market is bad. So you might have some problems to have all your fleet in the air. It can be tough, but the business as such is rather straightforward. But now, separate company or not is no factor, Atlas is going to compete against it's own customers. I want to see Stan Wraight's face when his next customer tells him that the contract is off as they (Atlas) are the direct competition. My prediction: all their customers will do that. And believe me, direct sales is enormously more difficult than ACMI.
- So what will happen? Atlas is going to have to fly on it's own account, will lose all it's ACMI customers (as direct competition is a definite NO GO) and go bust. The route to Japan is worth ZERO. Japan since three years is in s downward deflationary spiral and will take a very long time to recover. Freight yields are falling rapidly as everyone wanted to get in there, but now capacities are much bigger than demand. They don't know how to deal with Asian forwarders, they don't know about the loyalty of Indian forwarders, Thai forwarders, Cinese forwarders to their carrier. If you don't believe me, check Eagle!!! And the Atlantic is dead, yieldwise. SOuth America is a small market, you cant move more than 15 airplanes in total there, and the compatition is fierce.
They will fly empty, and this is soemthing even the Atlas cash reserve (if it still exists by then) is not going to survive longer than a 3 to 4 months.
If I were an Atlas of Polar pilot, i'd run as fast as I can.
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Hunter:
Your airline market observations are logical and easily understood. But the real world of aerial freight markets is a dog eat dog phenomena wich defies ordinary logic.
Shipping rates and earliest airplane availability drive the market. There is no brand loyalty. The shipper of perishables wants his time sensitive cargo delivered TODAY at the LOWEST cost. He doesn't care what color the airplane is or whether the airline also carries a competitor's freight.
The asparagus on the tarmac at Lima will not necessarily wait for one belated Polar or Atlas 747 flight to come through. It may go on the Lan Chile 767F that's on the ramp right now with available space, with a shipping rate negotiated on the spot. Perishable cargo is a slippery business. Worldwide.
Your airline market observations are logical and easily understood. But the real world of aerial freight markets is a dog eat dog phenomena wich defies ordinary logic.
Shipping rates and earliest airplane availability drive the market. There is no brand loyalty. The shipper of perishables wants his time sensitive cargo delivered TODAY at the LOWEST cost. He doesn't care what color the airplane is or whether the airline also carries a competitor's freight.
The asparagus on the tarmac at Lima will not necessarily wait for one belated Polar or Atlas 747 flight to come through. It may go on the Lan Chile 767F that's on the ramp right now with available space, with a shipping rate negotiated on the spot. Perishable cargo is a slippery business. Worldwide.
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As a Polar Bear I can tell you this just plain sucks! Our ALPA contract has a scope clause in it that prevents Polar from selling the company if it results in a reduction of crews. Well, they just did and Atlas has made no bones about downsizing. The thing that hacks me off is the fact that I am sure Polar knew this but kept any inkling of what was to happen in the dark so the union could not organize any kind of opposition and get laid off before anyone knew what happened. We were told of a forthcoming "alliance" that would improve everything. Personally I am beginning to believe the scope clause of pur contract is a waste of good paper. Try talking to the union, Hah; no answers there. We have no idea is they are going to pursue job protection (my bet is not). And I really believe tha Atlas is going to use us against their union. Or at least try. We'll see. And too add insult to injury, last year United tried to buy us for more money! But for now there will soon be a pot full of former Polar Bears on the street.