FOOL CONFERENCE CALL SYNOPSIS*
By Greg Markus (MF Boring)

Atlas Air, Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:ATLS)") else Response.Write("(NASDAQ:ATLS)") end if %>
538 Commons Dr
Golden, CO 80401
Phone: (303) 526-5050

ANN ARBOR, Mi., November 4, 1996 /FOOLWIRE/ -- Atlas Air, Inc. announced net earnings for the quarter ended Sept. 30 of $8.2 million, or $0.37 per share, as compared to a net profit of $5.6 million, or $0.32 per share for 3Q95. Revenues for the 3Q96 increased to $79.7 million, a 67% increase over the year-ago quarter. Total contracted aircraft hours were 15,444, up 70% from 3Q95's 9,076 hours.

EXTRAORDINARY CHARGES. The third quarter 1996 results included the costs and accounting charges associated with the introduction of four 747 freighter aircraft leased from Federal Express into the Atlas Air fleet. Those charges totaled approximately $2.6 million, or $0.12 cents per share, on an after-tax basis (approximately $4 million on a pre-tax basis). Net of those charges, reported third quarter 1996 EPS would have matched analysts' consensus estimates of $0.49, which was $.02 above second quarter 1996 results.

In the conference call with analysts this morning, the company noted that the aircraft in question had been acquired by Federal Express when it acquired Flying Tiger, and the planes had been maintained according to schedules considerably less stringent than Atlas Air's. The costs of bringing the aircraft up to Atlas's standards were higher than anticipated. The situation was further complicated by the fact that these aircraft use Pratt & Whitney engines, which are different from the GE engines that Atlas's aircraft employ.

Atlas Air is currently negotiating with the company that maintained the aircraft to recover some of the unanticipated costs. In addition, Atlas Air has deferred delivery of a fifth 747 from FedEx until 1997, at the request of Federal Express.

The unavailability of the FedEx aircraft for use during the quarter strained relationships with the customer that was to utilize them, but Atlas Air believes it has the situation under control.

BUSINESS GROWS. Since Q1 1996, Atlas has also taken delivery of the first of six aircraft being acquired from Thai Airways. A second is scheduled for delivery in the current quarter, and the remaining four will be delivered over the course of 1997. The company has identified at least two additional aircraft that appear to suit its needs and is negotiating to acquire them. Atlas will only acquire aircraft if they can be put to good use and will not reduce the company's operating margins.

Although full financial statements for the quarter were not yet available, analysts noted (and the company agreed) that Atlas is a significant free cash-flow generator. The company was asked if they might use some of the cash to pay down debt. The company replied that they prefer to keep cash in place in order to be able to move quickly when opportunities to acquire suitable aircraft occur.

Currently, Atlas operates a fleet of 18 747-200 freighters. The company operates its fleet under long-term contracts with some of the world's leading air carriers, including Emirates, British Airways, China Airlines, Cargolux, FastAir, Thai International, KLM, Lufthansa, SAS, Swissair, and Varig, serving 52 cities in 25 countries.

Atlas Air confirmed today the renewal of its contract with British Airways. British Air entered into its relationship with Atlas a year ago on a trial basis, and has "now renewed for a longer term than the expiring contract." Atlas Air expects to be making additional announcements as contracts with other air carriers are renewed.

CONFERENCE CALL COMMENTS. In reply to a question, the company pointed out that its aircraft are at least two generations newer than the TWA aircraft that went down recently near Long Island, NY. Atlas reiterated that its maintenance schedules are according to the standards KLM employs and are among the strictest in the industry.

Atlas's pilots have declined to unionize and prefer to stay with the company's profit-sharing plan.

The stock may have suffered recently along with other companies in the airline industry as fuel prices have risen. It should be noted, however, that all fueling costs are borne by the airline that contracts for Atlas's services and not by Atlas.

PROSPECTS FOR Q4. The company believes the worst of the FedEx problems are behind them and anticipates resuming normal operations in the current quarter. Barring unforeseen events, the company is comfortable with analysts estimates for 1996 of $1.95, less the $0.12 charge taken in Q3. The company noted that had it not been for the unusual charge, its pre-tax margins would have increased in comparison with the year-ago quarter.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.