Reports: Apollo Group in talks over takeover bid for Atlas Air
A group led by investment firm Apollo Global Management is in talks to buy air cargo group Atlas Air Worldwide Holdings, according Reuters.
The newswire quotes a person familiar with the matter as saying talks are at an advanced stage, although no details of a deal being struck or the offer have been released.
The Wall Street Journal, who broke the story, said a deal could be reached quickly if the talks do not collapse.
Air Cargo News contacted Apollo and Atlas for comment.
News of the deal sent Atlas stock price skyrocketing yesterday from just over $75 a share before the news to $84.99 at the close.
Cargo planes have been in high demand over the past couple of years as air has benefited from a rebound in demand following the Covid outbreak in 2020.
Meanwhile, passenger planes, which have traditionally carried around 50% of global air cargo, are still being rolled out post-pandemic and lacking in major cargo destinations, such as China, due to ongoing restrictions.
Going forward, continued e-commerce demand, congestion at major hubs, supply chain diversification and increased use of passenger aircraft with less cargo capacity are expected to sustain demand. of freighters.
Over the next 20 years, the the global freighter fleet will increase by 80%with conversions accounting for two-thirds of deliveries, Boeing predicts.
As of March 31, 2022, Apollo had approximately $513 billion in assets under management.
Atlas Air Worldwide is the parent company of Atlas Air and Titan Aviation Holdings and is the majority shareholder of Polar Air Cargo Worldwide.
Its airlines operate the world’s largest fleet of 747 freighter aircraft and also provide B777, B767 and B737 aircraft for domestic, regional and international cargo and passenger operations.
In the first quarter of the year, the company reported improved revenue despite lower volumes.
The charter and cargo operator saw revenue rise 20% from a year ago to $1 billion in the first quarter, adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) rose 11.9 % to $202,814 but net profit fell 9.4% to $81.5 million.
Last year, the company received $40.9 million in grant income, $31.9 million after tax, from the CARES Act (US government Covid support).
The company said its figures were also negatively affected by increased pilot costs resulting from a new collective bargaining agreement, a reduction in less profitable small-gauge CMI flights, operational disruptions due to the omicron and higher fuel prices.
The company has been busy increasing its fleet over the past few years, most recently receipt of another B747 freighter.
Atlas Air takes delivery of the last B747 freighter
Atlas Air revenue improves despite lower volumes