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Vol. 39, No. 5A
Southern Air begins flying 737-800Fs for Amazon

Atlas Air Worldwide’s subsidiary carrier Southern Air today put two 737-800BCFs into service on a CMI basis for Amazon Air. The two aircraft (32882 and 32611) are among at least five 737-800BCFs that Southern Air will begin flying for Amazon in 2019.
Breaking away from a pattern of what appear to be test flights between Jacksonville (VQQ) and Tampa (TPA), both aircraft have now completed flights to destinations outside of Florida. Yesterday, 32882 left Jacksonville (VQQ) for Tampa (TPA) and subsequently departed from Tampa at 12:45 am for Chicago’s Rockford Airport (RFD), on what appears to be the aircraft’s first commercial flight. It subsequently departed Rockford for Portland (PDX), where it landed this afternoon. The other unit, 32611, also flew to RFD last night, before returning to TPA.  
Unlike the e-tailer’s 767F fleet, which is dry-leased from Atlas and ATSG affiliates, and then handed back to affiliate carriers for CMI operation, the 737-800BCFs are leased from GECAS, Boeing’s customer for the freighter conversions. As part of the agreement with AAWW, Amazon has options for the CMI lease of up to fifteen more 737-800BCFs by May 2021. Cargo Facts believes Amazon will likely elect to exercise options for all fifteen and that GECAS has already lined up conversion slots with Boeing to do so.

Separately, Atlas Air Worldwide reported its 1Q earnings this week. For more on that click here.

ATSG, DHL renew 767 lease and operating agreements

Earlier this week, ATSG announced it had reached an agreement with DHL to extend dry leases on a total of eleven 767Fs for three more years, through April 2022. Operational agreements for five 767s currently in service with ABX Air – four 767-300BDSFs and one 767-200BDSF – were also extended. The other six 767-200BDSFs involved in the extension are dry-leased to DHL and are in service with its Bahrain-based airline affiliate DHL International Aviation ME. ATSG told investors during its 4Q18 earnings call that it was close to inking a deal for the renewals with DHL, and so the deal was not unexpected. Three other 767-300BDSFs, owned by CAM and operated by ABX Air for DHL, are covered under separate agreements that expire after 2023. ABX’s sister carrier, Air Transport International, meanwhile, provides CMI services to DHL on four 757-200Fs leased from CAM. 
UPS’ growing 747-8F fleet boosts air volumes in 1Q
UPS reported first-quarter 2019 net income down by 17.4% year-over-year to $1.11 billion, on revenues that were up slightly (0.3%) at $17.1 billion. Operating profit for the quarter declined 8.3% to $1.39 billion, as the company was hit by forecasted economic “headwinds” and a series of severe winter storms that impacted the US Domestic segment.

Looking beyond the financials, demand for airlift remained robust, with average daily volume growth for air services up 8% y-o-y, according to Richard Peretz, CFO at UPS, during a call with analysts.

The impact of the ten 747-8Fs that UPS gradually added to its network is also starting to become apparent as UPS Airlines deploys the larger freighters. Most recently, UPS Airlines began utilizing the aircraft on routes between Hong Kong and Europe. Even as slowing global trade has translated into declining air cargo traffic for many Asia-Pacific carriers in 1Q, UPS said express volumes bound for the United States ex-Asia-Pacific were up 3% y-o-y during the quarter. Volumes out of Asia-Pacific to Europe were up 2%.

For a breakdown by operating segment, read the full story here.
Cargolux ferries first ex-ASL 747-400ERF to Luxembourg
Last Friday, a 747-400ERF (35234) previously operated by ASL Airlines Belgium was ferried to Cargolux’s main hub in Luxembourg [FAT 004858]. Following paint and maintenance, the aircraft will be the first of three incoming freighters the carrier will add to its fleet this year.

Domenico Ceci, EVP of sales and marketing for Cargolux, told our sister publication, Air Cargo World, that the three used aircraft would give the carrier flexibility to add capacity where it was needed. Additionally, the incoming freighters will “provide for maintenance downtime as our 747-8F fleet are now also entering into more intensive maintenance checks.” 

Cargolux’s 747-8F fleet is nearing an age where they’ll soon require extensive D-Checks. A spokesperson for Cargolux confirmed that its first 747-8F to undergo a D-Check is already in maintenance (35806). A second 747-8F, meanwhile (35809) will be taken out of service for a D-Check later this year.

As for the other two 747-400ERFs joining the Cargolux fleet, two more aircraft currently operated by ASL Belgium will soon be headed to Luxembourg. Cargolux has not confirmed how soon the incoming aircraft will be repainted and could enter commercial service.
Recent freighter aircraft transactions:

UPS took delivery of a 747-8F (64621) ferried from Boeing’s Paine Field (PAE) to Louisville International Airport (SDF) on 30 April [FAT 004859]. UPS is the only named carrier with additional 747-8F orders listed in Boeing’s backlog, and with this most recent delivery, the express operator is awaiting seventeen more deliveries based on its current outstanding orders.

Aeronaves TSM ferried an MD-83 (53122) for passenger-to-freighter conversion with Aeronautical Engineers, Inc., at the Commercial Jet facility in Miami [FAT 004860].
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