ATSG Looking for B737 Freighters for China Joint Venture

The rush into the Chinese air cargo market seems to be never ending.
It’s not only internal Chinese air cargo carriers such as YTO Express and SF Express who are juggling for position and slice of this lucrative market in the future.
The Wilmington (US), Ohio-based company, Air Transport Services Group (ATSG) is said to be on the lookout for suitable Boeing 737F aircraft in order to start their joint-venture program in China.

ABX Air is a leading member of the Air Transport Services Group  -  company courtesy
ABX Air is a leading member of the Air Transport Services Group - company courtesy

Tianjin hub is planned for start up
ATSG together with China’s United Star Express Airline have got together to operate a JV which will run under United Star’s name.
The hub for the planned express operation is Tianjin where both parties plan to base a fleet of Boeing 737 freighters and operate them throughout China.
Could it be that the recent order given to AEI Miami (see also this week’s version of SHORT SHOTS) from a yet undisclosed customer is directed towards this deal?
ATSG and United Star plan to start their operation sometime next year. It cannot be earlier seeing that there is a backlog of orders now for Boeing 737 P2F aircraft.

ATSG’s Amazon deal - the start of a new era?
The Wilmington-based carrier again came into the spotlight a few months ago when it was made public that Amazon signed a contract with ATSG whereby the carrier will supply twenty Boeing 767 freighters solely for Amazon’s use within the continental USA.

The Air Transport Services Group has come a long way within the past few years.
Basically an American aviation holding company, which offers air cargo transport and related services to other air carriers, ATSG subsidiaries include three cargo airlines which all have U.S. FAA Part 121 Air Carrier certificates.
These are ABX Air, Airborne Global and Air Transport International.
The Group runs their own Maintenance & Engineering Services (AMES) as well as a Maintenance, Repair & Overhaul (MRO) unit.
A Cargo Aircraft Management (CAM) - dry leasing division coordinates aircraft leasing and rental to other carriers or logistics companies.

In December 2013, ATSG also took a twenty-five percent stake in the U.S. carrier, West Atlantic.


Large Boeing freighter fleet expands
The deal with Amazon, which will initially run for five years, was managed through ATSG’s leasing division and the twenty B767F’s will be operated by both ABX Air and Air Transport International.
As is with the Amazon - Atlas Air deal, ATSG also granted Amazon warrants to buy 9.99% and even up to 19.9% of ATSG common shares which are listed on the U.S. NASDAQ stock exchange.

The first quarter of this year showed ATSG generating revenues of US$177.4 million, which represents an increase of 21 percent compared to the same period last year.
The fleet consist of 56 Boeing 767 and B757 freighters and there are a further five B767-300 aircraft in ATSG’s hands awaiting their P-to-F conversion

The joint-venture in China opens up new horizons for ATSG which until now was more-or-less dealing in the U.S. domestic market and South America.

John Mc Donagh

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