Air Transport Services Group Reports 5% Revenue Decline and Prepares for Merger

Air Transport Services Group, Inc. (ATSG) reported a decline in financial performance for the fiscal year ending December 31, 2024, with total revenues of $1.96 billion, a decrease of 5% from $2.07 billion in 2023. The company's consolidated earnings from continuing operations fell to $27.4 million, down from $59.7 million in the previous year. This decline in profitability was attributed to lower revenues from aircraft leasing, customer flying, engine power services, and fuel sales, alongside increased operational costs, particularly in depreciation and interest expenses.

In terms of operational developments, ATSG's fleet comprised 167 aircraft as of December 31, 2024, including 112 owned and 33 leased. The company took delivery of nine newly converted Boeing 767-300 freighters during the year, which were leased to external customers under long-term contracts. However, the company also faced challenges, including the return of several older aircraft from lease agreements, which contributed to the revenue decline. The total number of employees decreased to approximately 4,745, reflecting a 6% reduction from the previous year, primarily due to fewer customer ground service contracts.

Strategically, ATSG is preparing for a significant merger with Stonepeak Nile Parent LLC, which was approved by shareholders on February 10, 2025. The merger is expected to close in the first half of 2025, after receiving necessary regulatory approvals. If completed, ATSG will become a privately held company, and its securities will be delisted from the Nasdaq Stock Market. The company has incurred costs related to the merger, including advisory and legal fees, amounting to $8.3 million in 2024.

Looking ahead, ATSG anticipates that the merger will enhance its operational capabilities and financial flexibility. The company has secured additional aircraft conversion slots through 2027 to meet future demand for freighter aircraft, particularly in the e-commerce sector. However, the company also faces risks from fluctuating market conditions, including potential impacts from geopolitical tensions and inflationary pressures on operational costs. The management remains focused on maintaining strong relationships with key customers, including Amazon, the U.S. Department of Defense, and DHL, which collectively accounted for 76% of total revenues in 2024.