Michael Chowdry Success Story-Atlas Air

Michael Chowdry Chairman,  CEO and president of Atlas Air  When Michael Chowdry launched Atlas Air in 1992 he did so with a single Boeing 747-200 freighter and just one contract with China Airlines. Today Golden. Colorado-basedAtlas Air is a worldwide cargo carrier operating the largest 747F fleet in the world onlong-term contracts providing vital cargo services for major internati0onal airlines.

Atlas   Air   is   the   only   pure   air   cargo   outsourcer   and   the   largest   aircraft,     crew,maintenance and insurance (ACMI) carrier in the freight service business. The companymakes money from fixed rate,   long-term contracts,   where by Atlas Air provides theACMI to airline clients,   which the airlines paying all of the other operating expensesincluding fuel,  airport fees and services and cargo insurance. One aircraft is dedicated toeach customer,  with the client guaranteeing a minimum level of usage.

Atlas Air’s fleet today compromises 23 747-200Fs and seven 747-400Fs which currentlyoperate to 101 cities and 46 countries. Past and present clients include British Airways(BA),  China Airlines,  Fedex, Korean Air,  Catay Pacific,  Alitalia,  Cargolux,  Emirates,EI AL. Iberia,  Scandinavian Airlines System (SAS) and Thai International Airways.

Chowdry’s achievement is crating the world’s largest operator of 747 freighters and thethird   largest   cargo   carrier   operating   from   a   unique   business   model   is   even   moreimpressive when you consider the airline leader’s background. Chowdry emigrated to theUSA from his native Pakistan in the mid-1970’s. It was in the USA where his interest inthe airline business first developed. He learned to fly and his first job in the industryinvolved   flying   crop-duster.   His   early   experience   of   aircraft   sales   was   selling   Piperaircraft to pay for his college tution. By the early 1980’s he was buying and sellinglanding and take-off rights at constrained major airports.

Chowdry then founded the first Colorado commuter airline to have a United Airlinespartnership. One of his early major aircraft deals involved the purchase of seven Boeing727’s from Frontier Airlines and their onward sale to all-cargo operator Flying Tigerswhich   was   later   swallowed   by   FedEx.   That   transaction   provided   Chowdry   with   thecapital  to start  Aeronautics  Leasing  (ALI)  in 1984.  ALI  leaded  passenger aircraft  toairlines worldwide, with customers including PanAm, BA, TWA, Continental and SAS.

It was the collapse of PanAm,   which leased a 747-200from ALI,   in 1992 that reallyspurred Chowdry to form Atlas Air. At the time,  a deep world recession had taken hold,airlines were suffering huge losses and ALI was having difficulties placing its passengeraircraft. As a result,  Chowdry converted a passenger 747 to cargo configuration. ChinaAirlines required a 747 freighter,   but was not willing to operate the aircraft itself,  soChowdry formed  Atlas Air  offering freighters  on an  ACMI basis.  The company  hasgrown consistently in terms of fleet,  customers and revenues ever since.

Last year was a record one for Atlas Air,  Revenues and operations income were at an all-time high,    with  revenues   raising   51%   from   a  year   earlier   to   $637.1  million,     and operating income up 38% to $187.5 million. Net income climbed to $61.3 million,  up 33% from the previous year.

Because Atlas AQit’s customers pay for the fuel.  Atlas hasvirtually   no fuel  price   exposure,    unlike   other   airlines,     and   its   business   is   centredexclusively on the fast-growing international heavy air freight sector,  which saw stronggrowth throughout 1999. During the year,  the operator expanded its customer base by five airlines and placed intoservice for new 747-400s.

Last year Atlas Air exercised options for the firm delivery of two 747-400Fs for entryinto service this year. In addition,  a 747-200F was placed with Lan Chile under an ACMIcontract,  its contract with Emirates was renewed,  two long-term 747-200F agreementswere signed with Air France,  a short –term contract was signed with Cathay Pacific,  twolong-term   agreements   with   China   Airlines   and   Malaysian   Airlines   become   a   newcustomer,  confirming a four-aircraft contract.

The airline is looking ahead to a promising 2000. A further three 747-400s will be addedto the fleet this year and already the operator has secured a new contract from ChinaSouthern. As a result of the agreements signed over the last few months,  approximately95% of the company’s projected block hour production for the year is already undercontract.Chowdry’s achievements were recognized by a panel of independent judges drawn fromvarious industries last year when he selected as the 1999 Entrepreneur of the Year byErnst & Young in the USA.

The Aerospace Industry Awards panel of judges felt that Chowdry has done something“totally different” for the air cargo industry with the ACMI concept. It means that anoperator can use an Atlas Air freighter as if it was the customer’s aircraft,  but with outany potential problems with operators face with their own aircraft.