FOOL CONFERENCE CALL SYNOPSIS*
By Debora Tidwell (MF Debit)

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

ANN ARBOR, Mich. (Feb. 18, 1997) -- Atlas Air is a U.S. certificated air carrier that operates a fleet of 747-200 freighters under long-term contracts with commercial air carriers including Emirates, British Airways, China Airlines, Cargolux, FastAir, Thai International Airways, KLM, LAS, Lufthansa, SAS and Varig, serving 62 cities in 38 countries. Under these contracts, Atlas provides the aircraft, crew, maintenance and insurance; fuel costs are borne by the customer.

Atlas Air reported today that it earned a net profit of $13.4 million, or $0.60 per share, on revenues of $104.7 million for the quarter ended Dec. 31, 1996. That represented a 39.5% increase in earnings per share over EPS of $0.43 a year ago, and an 87% increase in revenues as compared with $56.1 million in the fourth quarter of 1995. Operating income rose 85% to $29.9 million from $16.2 million in the fourth quarter of 1995, representing a 29% operating margin in both quarters. The fourth quarter results were below those projected by analysts, for reasons detailed below.

Detailed balance sheet and cash-flow information was not available at the time of the public report of results but will be available shortly, according to the company.

In the company's press release, Atlas Air's chairman and chief executive officer, Michael A. Chowdry, said, "Atlas Air's performance during 1996 has been truly satisfying. This company is successfully making the difficult transition from an entrepreneurial start-up carrier to one of the world's largest cargo airlines, at the same time that it has doubled the size of its operations. Also, during the year, Atlas was named the Cargo Airline of the Year, was the recipient of the prestigious Cargo Development Award from Air Transport World, and, most significantly, became ranked the most financially fit airline, passenger or cargo, in the world."

EVENTS IMPACTING FOURTH QUARTER RESULTS

Atlas operated throughout the quarter without the benefit of an aircraft whose delivery to the company had been deferred to first quarter 1997 by its lessor, United Parcel Service. In return for that consideration, UPS provided Atlas with additional business during the seasonally heavy fourth quarter, thereby mitigating some of the financial impact to Atlas of not having that aircraft in service as originally planned.

In addition, the company's operating costs continue to be impacted by higher than anticipated maintenance costs associated with four aircraft leased from Federal Express were introduced into the Atlas fleet during the second half of 1996.

The average number of aircraft flying in the fourth quarter was 18.5.

COMMENTS ON THE CURRENT QUARTER

The first quarter is typically a seasonally slow one. It looks to be slower than normal this year due to the timing of Chinese New Year. Contractual arrangements provide that customers may cancel a certain amount of business in any given year, and some customers are exercising those provisions in the first quarter because of Chinese New Year. As a result, Atlas currently expects 1Q results for 1997 to be flat with those of 1996. These cancellations should not affect results for the full year, however, because any cancellations that are exercised in the current quarter may not be utilized later in the year.

Two aircraft were returned in the first quarter as their leases expired. So the total available fleet is 17. Atlas purchased a GE-powered 747-200 passenger-configuration aircraft from Philippine Air on Jan. 10, 1997.

OPERATIONAL PROJECTIONS FOR 1997

No additional aircraft will be introduced into service during the current (first) quarter. Under terms of the lease agreement with Federal Express, Atlas will be taking delivery of a fifth aircraft of the same configuration as the four it received in 1996, probably in the second quarter of 1997. Two additional aircraft will also be introduced into service in the second quarter. One aircraft will be added in each of the third and fourth quarters, bringing the total to five aircraft that are planned to be added into service in 1997.

Based on the projected timing of those additions, the average number of aircraft in operation by quarter is estimated to be 17.0 in Q1, 18.9 in Q2, 19.7 in Q3, and 22.0 in Q4, for a full-year average of 19.4. That would represent approximately 30% growth over 1996. This schedule is somewhat more back-end loaded than was originally planned last year.

Acquisitions are timed to fit with available openings at Boeing's facility for converting passenger planes to cargo configuration. Atlas uses the Boeing facility to ensure that the aircraft meet all certification requirements.

Currently, the company projects that it will fly 75,000 to 80,000 block hours in 1997, as compared with 59,445 total block hours in 1996 and 33,265 in 1995.

Atlas said they are also currently in negotiations for the acquisition of additional aircraft for delivery beginning in 1998.

The company also announced that it had received commitments, subject only to final documentation, from a syndicate of banks and financial institutions led by Bankers Trust and Goldman Sachs, to increase the size of its existing revolving aircraft acquisition facility from $175 million to $275 million.

RESPONSES TO QUESTIONS

Atlas spokesmen said that they are willing to consider aircraft other than 747-200 models but that no customers have expressed an interest or need for other aircraft types. Having a single-configuration fleet makes for economic efficiencies.

The pending reversion of Hong Kong to China has limited consequences for Atlas Air, as the company has limited exposure to Hong Kong.

Atlas Air provides bulk lift capacity for 5 to 15 ton shipments, as compared to door-to-door delivery of small packages as provided by most of the better-known air freight companies. Also, Atlas is not directly affected by changes in fuel prices, since the customer is responsible for fuel costs.

As the need for air freight capacity increases in fast-growing areas of Asia, Atlas expects to be there. As it is now, much of the air freight from those countries are consolidated in Taiwan for shipment to other parts of the world, and Atlas does substantial business out of Taiwan. China Air recently renewed a five-year contract with Atlas.

The leases on the five aircraft leased from Federal Express (and originally owned by Flying Tiger) expire in January 1998. Atlas will consider renewing those leases if it can be demonstrated that the aircraft can be operated at a satisfactory profit margin; otherwise, Atlas will return them. If the company does return them, they are confident they can locate acceptable alternative aircraft. Atlas is the leader in acquiring 747-200 aircraft and is closely attuned to opportunities in the marketplace.

As for securing crews for the additional aircraft, Atlas believes it is very successful in recruiting. The company's compensation package includes a very attractive profit-sharing plan. The typical applicant is a recent retiree from 20-plus years of military flight experience who prefers to fly with Atlas because it offers the opportunity to rise to captain more quickly than in commercial passenger aviation.

Atlas Air managed to attain an operating margin of 29% in the fourth quarter despite some challenging circumstances. Although the company cannot guarantee what future margins will be, they are confident of continued growth in 1997 and beyond and will work to achieve further cost efficiencies. For example, as the company has matured and developed a record of performance, its insurance rates have declined.

* 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.