Air Atlanta’s freighter dilemma

The Iceland-based ACMI operator is excited to be getting its first B747-400Fs, but does that necessarily mean it is time to retire the -200Fs? Peter Conway analyses the dilemma.

Not so long ago it seemed as ACMIoperator Air Atlanta Icelandic wouldneed to make a rapid transition fromB747-200Fs to more modern freighters.Now, however, the picture is lessclear.

True, the carrier is looking carefullyat the 12 -200Fs that form the bulk ofits fleet, and looks almost certain to sellthe two of them it actually owns whentheir leases expire in the middle of thisyear. But the future of the remainingten ¨C dry leased from their owners, andthen wet-leased to airlines ¨C remains tobe decided.

Current customers include MalaysianAirlines, which has four, due forrenewal in 2008; Cargolux, which hasone on a yearly renewable lease; andLufthansa, which sold and leased backthree to Air Atlanta, but currently hasone parked. Cathay Pacific sent back itslast -200F in December, however.

Giving Air Atlanta hope for futuredemand are two new contracts signedfor -200Fs last year: one for a year forSaudi Arabian Airlines and one forYangtze River Express. Air Atlanta’s vicepresident sales and marketing, Johann Onfjord Karason, in particular hopesthat China could be a future market forthe -200Fs, saying Air Atlanta’s qualityservice record may help persuade theauthorities there to allow airlines towet-lease its aircraft.

The future of the -200Fs also dependson external factors, however,including whether fuel prices soarback up to their 2006 highs again ¨C afactor which would weigh against thenot particularly fuel-efficient -200F;and on contract negotiations with theaircraft’s owners. “If they want to keep their aircraft in the game, then they will have to adjust their dry lease rates,” Karason says ominously.