"What we're seeing is pretty strong consistent demand improvement," Atlas Chief Executive William Flynn told Reuters.
The provider of charter freight services to commercial airlines such as Qantas Airways and the U.S. military said demand has been helped by shipments of goods for inventory replenishment and introduction of new electronics products such as Apple Inc's iPad tablet computer.
At the same time, the retirement of older, less fuel-efficient aircraft is keeping fleet capacity in check and aiding pricing power for freight carriers, Flynn said.
"We're seeing very very high sustained charter demand and charter pricing," Flynn said.
Air freight is a leading indicator of world trade movements since shippers tend to switch to air when speed is more important than cost.
Atlas operates Boeing aircraft, and expects to take delivery of its first next-generation 747 freighter in early 2011, Flynn said.
Business also will be helped by a nine-year contract announced last month to operate Boeing Co's Dreamlifter aircraft. These modified Boeing freight planes are used to transport major parts of the carbon-composite 787 Dreamliner plane.
Research firm CJS Securities estimated last month that the Dreamlifter deal could add 50 cents to per-share earnings in 2011 and beyond for Atlas.
Flynn said the Dreamlifter work will provide a new earnings stream in coming years as charter flying for the U.S. military winds down due to expected troop withdrawals from the Middle East.
Currently, Atlas Air's service to the military accounts for about 20 percent of the company's flying. Flynn said the military work helped offset weakness in late 2008 and in 2009 as falling demand for goods hurt cargo traffic.
"Just looking at the forecast we have from Boeing, the Dreamlifter will be ramping up operations as we anticipate we might be drawing down some of the military operations," Flynn said. (Reuters)
