ATSG and Air Canada Agree to Sale, Conversion and Leaseback of Two Boeing 767 Aircraft

Rhea-AI Summary

Air Transport Services Group (NASDAQ:ATSG) has announced a significant milestone, agreeing to purchase two Boeing 767-300ER aircraft from Air Canada. The deal includes converting the planes from passenger to freighter configurations and leasing them back to Air Canada. The first aircraft will undergo conversion in March 2021, with an expected redelivery by year-end. This partnership marks ATSG's first sale-leaseback agreement with Air Canada, aimed at enhancing Air Canada's cargo operations in response to growing market opportunities.

Positive

• First sale-leaseback agreement with Air Canada enhances strategic partnerships.
• ATSG's experience in passenger-to-freighter conversions supports operational efficiency.
• Expected delivery of converted freighters aligns with Air Canada's growth strategy in cargo services.

Negative

• None.

Air Transport Services Group, Inc. (NASDAQ:ATSG) today announced that its Cargo Aircraft Management, Inc. subsidiary has agreed to purchase two Boeing 767-300ER aircraft from Air Canada of Montreal, convert them from passenger to freighter configuration, and lease them back to Air Canada. This is the first sale-leaseback agreement between ATSG and Air Canada.

The first aircraft will be inducted for conversion in March 2021. Both are expected to be redelivered to Air Canada by the end of 2021.

In November 2020, Air Canada announced the next steps in its strategic plan to use converted freighters to grow its cargo business across the global supply chain in response to evolving opportunities in the air freight market.

“Getting these two 767 freighters into our operation in 2021 is aligned with our announcement in November,” said Jason Berry, vice-president of cargo at Air Canada. “We are excited to be in a position to capture the market opportunities that currently present themselves. Delivering on our commitments is critically important to all of us at Air Canada.”

ATSG has substantial experience in managing the passenger-to-freighter conversion process, which requires extensive engineering modifications such as reinforcing the floor beams to support heavy cargo, installing a main-deck cargo door, and installing a rigid metal barrier behind the cockpit to protect against sliding loads. The aircraft will be converted by Israel Aerospace Industries (IAI) of Tel Aviv, Israel.

“It is always a great feeling to gain a new lease customer, and we are proud to be able to again support a great airline like Air Canada,” said Mike Berger, chief commercial officer of ATSG. “We are looking forward to delivering these airplanes and extending our special partnership with Air Canada. We continue to see growth outside of the United States, and ATSG continues to enable great companies to take advantage of growing global e-commerce and mobile-commerce trends.”

About Air Transport Services Group, Inc.
ATSG is a leading provider of aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. ATSG, through its leasing and airline subsidiaries, is the world's largest owner and operator of converted Boeing 767 freighter aircraft. Through its principal subsidiaries, including three airlines with separate and distinct U.S. FAA Part 121 Air Carrier certificates, ATSG provides aircraft leasing, air cargo lift, passenger ACMI and charter services, aircraft maintenance services and airport ground services. ATSG's subsidiaries include ABX Air, Inc.; Airborne Global Solutions, Inc.; Airborne Maintenance and Engineering Services, Inc., including its subsidiary, Pemco World Air Services, Inc.; Air Transport International, Inc.; Cargo Aircraft Management, Inc.; and Omni Air International, LLC. For more information, please see www.atsginc.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210114005524/en/

FAQ

What is the recent announcement by ATSG regarding Air Canada?

ATSG announced it will purchase two Boeing 767-300ER aircraft from Air Canada, converting them to freighter configurations and leasing them back.

When will the conversion of the first aircraft begin?

The first aircraft will be inducted for conversion in March 2021.

How does the agreement benefit Air Canada?

The agreement supports Air Canada's strategic plan to expand its cargo operations in response to market demands.

What type of aircraft is involved in the ATSG and Air Canada deal?

The deal involves two Boeing 767-300ER aircraft.

What is ATSG's role in aircraft conversions?

ATSG specializes in managing the conversion of aircraft from passenger to freighter configurations, ensuring compliance with engineering standards.