A fantastic industry
Sweden’s Michael Steen has been at the helm of Atlas Air for ten years now, having previously worked as an airline manager and also served other links in the global supply chain for 15 years. Atlas Air is the world’s largest operator of Boeing B747Fs (42 units), and also has eleven B777Fs, 25 B767Fs, one B757F and six B737Fs in its fleet. Diversification is the order of the day – a partnership with Amazon plays a key role.
Mr Steen, can you first explain Atlas Air Worldwide’s structure for us please?
Our president and CEO William J. Flynn joined Atlas Air together with me, and we decided to redesign the corporate strategy. Until then activities had focused almost exclusively on the wet lease and charter segments. First DHL Express took a 49% stake in our scheduled service operator Polar Air Cargo and became the backbone of DHL Express’s trans-Pacific activities. At that time we deployed six units for our partner; now the number has grown to 37 aircraft, which makes it amply clear how important this type of business relationship has become for us.
Over and above this we’ve also made massive changes to the size and makeup of our fleet, which only had Boeing B747-200s and 400s in it at the time. Our new, technologically advanced models represent one of our unique selling points, enabling us to fulfil the needs of a very diverse range of customers. Simultaneously we’re managing to grow too, even in these economically difficult times. At the end of May we had a total of 91 aircraft in our fleet, and by the end of the year this figure may rise to more than 100 units. We’re now in the process of elaborating our strategy for the next ten years.
The major triple-seven provider Southern Air was taken over by Atlas Air Holding in 2016...
...and is now being integrated into Atlas Air. The Southern Air brand will thus disappear from the market.
What fleet expansion plans do you have?
We continuously analyse the requirements of our (potential) customers and are set to add B767 freighters to our fleet in 2018, amongst others. Their capacities are best suited to the needs of e-commerce activities. The first phase will see 20 B767Fs joining us, which the Atlas subsidiary Titan Aviation Holdings will deploy for Amazon in the US market.
How has your frequently-cited partnership with Amazon, which is sometimes also commented on critically, developed since it was announced in 2016? (See page 38 of ITJ 37-38/2016.)
We’re thrilled with our cooperation agreement, as it represents a solid entry into a growing airfreight segment for us. General cargo will remain the main pillar of the industry, and we already operate very strong express activities with several integrators. But B2C e-commerce is a completely different business model. Aeroplanes are the mode that guarantees that customers receive their orders as quickly as possible. And it’s really growing by leaps and bounds. Even the online saturation level of US households comes to just 8%, with 60% of the trade accounted for by immaterial goods, such as digital films or books.
Amazon also operates outside the USA.
We’ve initially limited our cooperation efforts to the US market. We’ll see what the future holds.
How do your ‘classical’ clients – airlines and integrators – perceive the deal with their new competitor?
You’ll have to ask them! But everyone knows that symbioses which serve every involved party in the end can be attained.
So every one of your business fields is growing. What about charters?
We’re very busy there too, be it transporting Formula 1 racing cars, live animals or new products launches. Airfreight is one of the global economy’s engines.
What role does Atlas play therein?
Look at Latin America for example. We serve it with three to four scheduled services a week from Miami FL (USA). We carry lots of spare parts south, and fill the aircraft with perishables on the northbound legs. 60% of all asparagus consumed in the USA and all of Costco’s Chilean salmon flies in on Atlas Air units. We’re proud of this performance.