Atlas Air Reports Record Second Quarter Earnings; 36% Operating Margin.

GOLDEN, Colo.--(BUSINESS WIRE)--July 22, 1998- Atlas Air, Inc. (NYSE:CGO) today reported net income for the quarter ended June 30, 1998 of $10.1 million, or $.45 per diluted share, a record for second quarter earnings and the second best quarter in the Company's history.

These results represent a 189% increase over second quarter 1997 net income of $3.5 million, or $.16 per diluted share, excluding non-recurring items.

Operating income for the second quarter of 1998 was $31.5 million, the best quarterly performance in the Company's history, compared to operating income of $16.4 million in the second quarter of 1997, excluding non-recurring items. The 1998 quarter's results represented a 36% operating margin, also a record for Atlas.

Net income for the first six months of 1998 was $15.4 million, as compared to $9.3 million for the year-earlier period, excluding non-recurring items. Operating income for the first six months of 1998 was $53.1 million, compared to $34.7 million for the same period in 1997, excluding non-recurring items.

Stephen C. Nevin, Vice President-Finance and Chief Financial Officer, said, "We are obviously pleased with our results for the quarter and for the first six months. Not only did we set new profitability records for the Company, but we did so with two fewer aircraft in the fleet than in the year-earlier quarter. Despite that, we produced nearly as many block hours during the quarter as last year, reflecting an increase of almost 6% in average block hours per aircraft. This greater aircraft efficiency, coupled with an operating cost per block hour that was 11% below this year's first quarter, underscores the Company's positive financial expectations for the remainder of 1998 and beyond."

Richard H. Shuyler, Executive Vice President, said, "The second quarter demonstrated once again the vitality of the world's air cargo marketplace. Despite the problems occurring in Asia, our customers continued to carry strong cargo loads, particularly out of the Far East. Indeed, as recently reported, Standard & Poor's DRI economic analysis firm is projecting holiday season imports to be up 25% from last year's level, which would set an import record. As a result, we expect the strong cargo activity to continue, and are looking forward to a very healthy peak season for air cargo this year."

Michael A. Chowdry, Atlas Air's Chairman, Chief Executive Officer and President, said, "This quarter was an important one for Atlas, even beyond our favorable financial results. Most particularly, we confirmed the growing demand for our new 747-400F freighter aircraft. By placing our first two deliveries with two of the world's strongest cargo operators -- British Airways and Cargolux -- we demonstrated the value of this aircraft to ourselves and to our customers. In fact, we are so convinced of this aircraft's future at Atlas, that we advanced the delivery of two of our aircraft into 1999, giving us a total of four aircraft next year. We are truly excited to be taking delivery of our first 747-400F in Seattle next week and the remaining four new freighters we'll receive this year. With yet further important customer developments expected, we look forward with great anticipation to the second half of 1998 and to a successful 1999."

During the Period, the Company Announced the Following Developments:

-- Atlas Air took delivery at the end of April of the first of two used 747-200F aircraft which were undergoing modification at Boeing from passenger to freighter configuration. The second of these aircraft was delivered to the Company in July, increasing its fleet to 19 aircraft.

-- In April, the Company announced the placement of a 747-200F aircraft with Alitalia on a long-term ACMI contract.

-- The Company further announced a third multi-year ACMI contract for a 747-200F aircraft with LAS, the South American carrier.

-- In June, Atlas Air announced that it will place its first 747-400F aircraft under a long-term ACMI contract with British Airways. Atlas Air will take delivery of this aircraft on July 29, 1998, and expects to commence its contract with British Airways in August.

-- The Company further announced that it has placed its second 747-400F aircraft, scheduled for a mid-August delivery, on a long-term ACMI basis with Cargolux.

-- The Company completed an agreement with Boeing Commercial Aircraft Group to accelerate two deliveries of 747-400F aircraft, previously scheduled for delivery in the year 2000, into the second half of 1999.

-- Atlas Air announced that it concluded a ten-year agreement with Lufthansa Technik for the airframe maintenance of Atlas' new 747-400F fleet. This fixed-rate contract, with one of the world's leading aircraft maintenance providers, will be an important element in Atlas Air's goal of maintaining and expanding its cost-efficient operating structure.

-- Atlas Air reported that it had completed a $175 million private placement of 9 1/4% Senior Notes, that will be utilized to prepay amounts outstanding under its revolving aircraft credit facility and for general corporate purposes, including the possible redemption around or after year-end 1998 of the Company's 12 1/4% Pass Through Certificates.

Atlas Air is a United States certificated air carrier that operates a fleet of 747 freighters under long-term ACMI contracts. These contracts include the provision by Atlas of Aircraft, Crew, Maintenance and Insurance for some of the world's leading air carriers, including Alitalia, British Airways, Cargolux, China Airlines, Emirates, Fast Air, KLM, LAS, SAS, and Thai International Airways, serving a total of 62 cities in 37 countries.

To the extent that any of the statements contained herein relating to the Company's expectations, assumptions and other Company matters are forward-looking, they are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on current expectations that involve a number of uncertainties and risks that could cause actual results to differ materially from those projected in the forward-looking statements, including, but not limited to, risks associated with: worldwide business and economic conditions; product demand and the rate of growth in the air cargo industry; the impact of competitors and competitive aircraft and aircraft financing availability; the ability to attract and retain new and existing customers; normalized aircraft operating costs and reliability; management of growth; the continued productivity of its workforce; dependence on key personnel; and regulatory matters. For additional information regarding these and other risk factors, reference is made to the Company's Annual Report on Form 10-K for the year ended December 31, 1997 and the Quarterly Report on Form 10-Q for the period ended March 31, 1998.

Atlas Air trades on the NYSE under the symbol CGO.

For information, contact Steve Nevin at 303/526-5050. -0-

                            Atlas Air, Inc.
                       SUMMARY FINANCIAL RESULTS
                    ($ Millions, except share data)
                          Quarter Ended 6/30

                                             1998           1997
                                                         Excluding
                                                       Non-Recurring
                                                          Charges

Operating Revenues                            $88.0        $93.9
Operating Income                               31.5         16.4
Pre-Tax Income                                 16.0          5.5
Net Income
         Excluding Non-Recurring Charges       10.1          3.5
         Including Non-Recurring Charges                     3.0

Diluted Earnings Per Share
         Excluding Non-Recurring Charges      $0.45        $0.16
         Including Non-Recurring Charges                   $0.14

Weighted Average Shares Outstanding (000's)  22,597       22,450
Total Block Hours                            16,828       17,541

                            Atlas Air, Inc.
                       SUMMARY FINANCIAL RESULTS
                    ($ Millions, except share data)
                         Six Months Ended 6/30

                                               1998        1997
                                                        Excluding
                                                      Non-Recurring
                                                         Charges

Operating Revenues                              $167.6    $176.0
Operating Income                                  53.1      34.7
Pre-Tax Income                                    24.5      14.6
Net Income
         Excluding Non-Recurring Charges          15.4       9.3
         Including Non-Recurring Charges                     8.1

Diluted Earnings Per Share
         Excluding Non-Recurring Charges         $0.68     $0.42
         Including Non-Recurring Charges                   $0.36

Weighted Average Shares Outstanding (000's)     22,577    22,450
Total Block Hours                               32,216    32,984

CONTACT: Atlas Air

Steve Nevin, 303/526-5050