Atlas Air and Southern Air, both key US-based air partners of DHL Express, could soon be under the same ownership.
Atlas Air Worldwide Holdings (AAWW) has announced that it has entered into a definitive agreement to acquire privately-held Southern Air Holdings, Inc., "a premier provider of intercontinental and domestic air cargo services, in an immediately accretive, all-cash, debt-free transaction valued at approximately $110 million."
The transaction is subject to customary closing conditions and approval by the U.S. Department of Transportation, and is expected to close in the next few months.
“We are very pleased to announce a strategically compelling, highly complementary and immediately accretive acquisition of Southern Air,” said William J. Flynn, President and Chief Executive Officer of Atlas Air Worldwide. “And we are eager to capitalize on the substantial opportunities that the transaction will provide, especially 777 and 737 aircraft operations.
“The result will be a more diversified and profitable company offering access to the widest range of modern, efficient aircraft, together with a broader mix of services and a greater scale and global footprint that will drive significant value for our customers and shareholders.”
Southern Air is the parent company of Worldwide Air Logistics Group and its two operating subsidiaries, Southern Air, Inc. and Florida West International Airways, Inc.
Southern Air's main operating company currently flies five 777-200Fs and five 737-400Fs under flight services (CMI, or Crew, Maintenance and Insurance) agreements with DHL Express, which is thought to be its sole customer.
“We very much look forward to joining the Atlas Air family of companies,” said Daniel J. McHugh, Chief Executive Officer of Southern Air Holdings. “We share the same commitment to providing superior customer service via our exceptional team of aviation professionals. And Southern Air will now have a strong and viable parent to enable us to continue to grow.”
AAWW underlined that the transaction provides Atlas Air Worldwide immediate entry into B777 and B737 aircraft operating platforms, with potential for developing additional business with existing and new customers of both companies.
"The platforms provided by these aircraft will augment Atlas Air Worldwide's ability to offer customers the broadest array of aircraft and operating services for domestic, regional and international applications.
"Atlas Air Worldwide and Southern Air have complementary operations, which will aid in providing seamless operations for customers. Further, the transaction will enhance Atlas Air Worldwide's position as a leading global provider of outsourced aircraft and aviation operating services."
DHL Express' strong links with AAWW date back to 2009 when it acquired a 49% shareholding in the latter's subsidiary, Polar Air Cargo. It subsequently began using several of Polar's 747-400Fs for its US air transportation activities.
Collaboration between the two parties has since increased significantly with industry sources estimating that AAWW is currently operating 12 B747-8 and B747-400 freighters for DHL via Polar on an Aircraft, Crew, Maintenance and Insurance (ACMI) basis. Add to this two B767-300 and nine B767-200 freighters for DHL on a CMI basis and DHL accounts for almost 40% of AAWW’s entire fleet.
Also, Titan Aviation Leasing, AAWW’s dry-leasing subsidiary, supplies two B777Fs and one B757-200F to carriers who are DHL contractors.
