ATSG expands fleet in Eastern Europe with new leases

WILMINGTON, Ohio - Air Transport Services (NASDAQ:ATSG) Group, Inc. (NASDAQ:ATSG), through its leasing subsidiary Cargo Aircraft Management, has recently expanded its global footprint by delivering two Boeing (NYSE:BA) 767-300 aircraft to Georgian Airways. The delivery under multi-year leases includes one passenger and one newly converted freighter aircraft.

The passenger aircraft was delivered in June, while the freighter arrived in July, marking a further step in the relationship between the Ohio-based aircraft leasing company and the Georgian national carrier. This deal is indicative of the increasing demand for global air capacity, particularly for cargo services, and ATSG's commitment to providing flexible leasing solutions.

David Gaiashvili, general director of Georgian Airways, expressed satisfaction with the partnership, highlighting the airline's three-decade history and focus on safety and excellence. Georgian Airways operates a range of scheduled, charter, and regular flights across various regions including Europe, the Middle East, and Asia.

Mike Berger, CEO of ATSG, commented on the strategic importance of the Boeing 767 and Airbus A330 aircraft for cargo airlines in Eastern Europe and Western Asia. He emphasized Tbilisi's advantageous position as a midpoint for trade routes extending from China to Europe, Southeast Asia, and the Middle East.

ATSG, known for its comprehensive air transportation solutions, boasts a diverse fleet that caters to both cargo and passenger needs. The company's subsidiaries, which include several airlines with U.S. FAA Part 121 Air Carrier certificates, provide a range of services from air cargo lift to charter services, alongside aircraft maintenance, airport ground services, and material handling equipment engineering.

The information for this report is based on a press release statement.

In other recent news, Air Transport Services Group (ATSG) has made significant changes to its leadership team. Mike Berger has been appointed as the new CEO, Jeffrey Dominick takes over as President, and Joe Hete, the former CEO, has assumed the role of Executive Chairman. This strategic restructuring aims to sustain the company's momentum and secure its market-leading position.

In financial developments, ATSG reported a 20% decrease in revenue for Q1 2024 but raised its adjusted EBITDA guidance by $10 million. The company also reported an adjusted net income of $10.86 million, surpassing analysts' estimates.

The company announced an expansion of its partnership with Amazon (NASDAQ:AMZN), which includes the addition of 10 Boeing 767-300 freighter aircraft to ABX Air, an ATSG subsidiary. This deal could potentially include an additional 10 aircraft in the future. ATSG's pilot agreement for ABX Air has also been extended by four years, now set to expire in 2030.

In response to these developments, TD Cowen has increased its price target for ATSG's shares to $18.00 from $16.00 and maintained a Buy rating. These recent developments are being closely watched by investors, with particular interest in the extended pilot agreement and potential fleet expansion through the Amazon deal. These factors are contributing to the company's optimistic financial projections and the positive rating from TD Cowen.

InvestingPro Insights

As Air Transport Services Group, Inc. (NASDAQ:ATSG) continues to expand its global presence with new aircraft deliveries to Georgian Airways, investors may be looking at the company's financial health and market performance. According to InvestingPro data, ATSG holds a market capitalization of 1020M USD, with a Price/Earnings (P/E) ratio of 21.43, reflecting investor sentiment about the company's earnings potential. The P/E ratio has seen a slight adjustment in the last twelve months as of Q1 2024, coming in at 21.19.

InvestingPro Tips indicate that ATSG operates with a significant debt burden, which could be a point of concern for investors considering the company's financial leverage. On the upside, management's aggressive share buyback strategy suggests confidence in the company's value, potentially signaling a positive outlook to shareholders. It's also noteworthy that analysts predict the company will be profitable this year, and the company has been profitable over the last twelve months.

On the market performance front, ATSG has seen a strong return over the last month with a 17.16% increase and an even more impressive three-month price total return of 24.71%. These figures could be attractive to investors looking for companies with recent positive momentum in their share price.

For those considering a deeper dive into ATSG's financials and future prospects, InvestingPro offers additional insights. With more InvestingPro Tips available, such as the latest on earnings revisions and the stock's RSI status, investors can make more informed decisions. To explore these insights, visit https://www.investing.com/pro/ATSG and remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

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