Atlas Air Worldwide Holdings Inc (AAWW)

A. Company Overview

Atlas Air Worldwide Holdings Inc. (AAWW) is a holding company with a wholly owned operating subsidiary, Atlas Air, Inc. It also has a 51% economic interest and 75% voting interest in Polar Air Cargo Worldwide, Inc. AAWW is the parent company of several wholly owned subsidiaries related to dry leasing services. The company is a leading global provider of outsourced aircraft and aviation operating services and is the largest outsourced airfreight provider in the world.

B. Products and Services

AAWW operates the world's largest fleet of 747 freighters, along with a variety of other aircraft models including 777, 767, and 737. The company offers a wide range of aircraft for domestic, regional, and international cargo and passenger operations. Its services include ACMI (Aircraft, Crew, Maintenance, and Insurance), CMI (Crew, Maintenance, and Insurance), Charter, and Dry Leasing.

C. Customer Segments

AAWW serves a diverse range of customers. Its customer base includes express delivery providers, e-commerce retailers, the U.S. Military Air Mobility Command, charter brokers, freight forwarders, direct shippers, airlines, manufacturers, sports teams and fans, and private charter customers.

D. Strategy

AAWW aims to provide unique value to its customers by offering highly reliable modern production freighters with low unit costs, combined with outsourced aircraft operating services that are considered to be industry-leading in terms of quality and global scale. The company focuses on enhancing its services and has the flexibility to expand its fleet in response to market conditions. AAWW has recently signed agreements with The Boeing Company for the purchase of new aircraft to further enhance its fleet.

E. Marketing and Target Group

AAWW has regional sales offices around the world that cover the Americas, Asia Pacific, Europe, Africa, and the Middle East regions. These offices market the company's services to a wide range of target groups, including express delivery providers, e-commerce retailers, the U.S. military, charter brokers, freight forwarders, direct shippers, airlines, manufacturers, sports teams and fans, and private charter customers.

F. Merger Agreement

AAWW has entered into an Agreement and Plan of Merger with Rand Parent, LLC, and Rand Merger Sub, Inc. Upon completion of the merger, AAWW will become a privately held company.

G. Operations

AAWW's business is organized into two operating segments: Airline Operations and Dry Leasing. The Airline Operations segment provides cargo aircraft outsourcing services to customers on an ACMI, CMI, and Charter basis. The Dry Leasing segment provides aircraft and engines to customers for a fixed monthly amount.

The company's fleet includes a total of 112 aircraft, with seven aircraft being dry leased to other operators. AAWW has extensive operations across Africa, Asia, Australia, Europe, the Middle East, North America, and South America.

H. Dry Leasing Joint Venture

AAWW has a long-term joint venture with Bain Capital Credit, LP called Titan Aircraft Investments Ltd (TAI). TAI aims to develop a diversified freighter aircraft Dry Leasing portfolio to capitalize on the demand for cargo aircraft driven by e-commerce and express market growth.

I. DHL Investment and Polar

DHL holds a 49% equity interest and a 25% voting interest in Polar Air Cargo Worldwide, Inc. Atlas and Polar have various agreements in place to provide air cargo capacity to DHL and supply administrative, sales, and ground support services to each other.

J. Amazon

AAWW has agreements with Amazon.com, Inc. and its subsidiary, Amazon Fulfillment Services, Inc., to provide CMI operation of Boeing 767-300 and 737-800 freighter aircraft, as well as Dry Leasing services.

K. Sales and Marketing

AAWW's sales and marketing activities are conducted through regional sales offices located around the world. These offices market the company's ACMI, CMI, Charter, and Dry Leasing services to a wide range of customers.

L. Fuel

Historically, aircraft fuel is one of the most significant expenses for AAWW. The company has measures in place to mitigate fuel price risk and minimize currency risks associated with international business.

M. Human Capital

AAWW has a team of approximately 4,500 employees, including approximately 2,700 pilots. The company maintains a comprehensive training program for its pilots and other safety-sensitive positions. Pilot employees and flight dispatchers are represented by the International Brotherhood of Teamsters.

N. Safety and Security

Safety is a top priority for AAWW, and the company has established a task force responsible for policies and procedures related to COVID-19. The company adheres to TSA and international regulatory body regulations to maintain the security of its aircraft.

O. Aircraft Maintenance

AAWW outsources its primary maintenance activities to third-party service providers. The company is subject to extensive FAA regulation and oversight to ensure compliance with maintenance, flight operations, and safety regulations.

P. Insurance

AAWW maintains various insurance policies to protect against liability, property damage, and other risks associated with its operations. The company participates in an insurance pooling arrangement with DHL and its partners to obtain aviation insurance at reduced rates.

Q. Governmental Regulation

AAWW is subject to regulation by the DOT, FAA, TSA, and other U.S. and foreign government agencies. The company holds DOT-issued certificates of public convenience and necessity and FAA-issued air carrier certificates. AAWW complies with various international, federal, state, and local laws and regulations governing environmental protection, health and safety, airport access, security, and other matters.

R. Competition

AAWW operates in a competitive market for outsourced aircraft and aviation operating services. The company competes based on access to capacity, efficiency and cost-effectiveness, and the scale, scope, and quality of services provided. AAWW's primary competitors are other airfreight providers and aircraft lessors.