June 1, 2020
Atlas Air Worldwide is proud to play a critical role in serving the global supply chain at this time of significant need. Since this crisis began, our efforts have helped deliver life-saving medical equipment and supplies to those working on the front lines in our communities. We have contributed to public safety by facilitating the delivery of essential goods from all over the world. At the same time, we continue to serve as a critical provider of passenger and cargo airlift for the U.S. military.
Airfreight is a significant pillar in our nation’s supply chain. Its speed and flexibility fuels large industries and small businesses, and rapidly delivers high-value and time-critical cargo. Its importance is reflected in the growth of e-commerce and express delivery that has become such a big part of our daily lives.
Our country also depends on air cargo to overcome other disruptions in the supply chain. This is especially important during military contingencies and disaster relief operations, where speed is imperative. It has played a pivotal role in saving lives, as well as maintaining economic activity and jobs, during the current pandemic. Simply put, a strong air cargo system means a reliable, secure supply chain for the benefit of all U.S. citizens.
The services our company provides are essential, and they are even more critical now as our country looks to move forward from this pandemic and pursue economic recovery. Atlas operates around the world to connect producers to consumers, generating economic growth, jobs and market stability. Our services support the economy, providing the fastest, most reliable transportation and logistics to U.S. manufacturing, agriculture and other key sectors.
Recognizing the economic uncertainty ahead and the important role of air cargo in America’s critical infrastructure, the U.S. Congress and the Administration established a payroll support program in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, including an allocation specifically for air cargo carriers. Today, we confirmed Atlas Air and Southern Air’s participation in the program. Our companies will receive a grant consisting of approximately $207.0 million in direct payroll support and $199.8 million in loans, which will be used to support the wages, salaries and benefits of our employees.
This program will help ensure that we are able to protect our workforce of highly skilled employees in the wake of this pandemic. This is particularly important given that the majority of our employees are pilots, who are required to maintain a continuous level of flying and training to adhere to Federal Aviation Administration safety regulations.
The CARES Act includes several provisions designed to ensure the continued employment of American workers, as well as safeguard the interests of American taxpayers.
In exchange for the financial support, the company will pay back, with interest, the loan portion of the proceeds, and also provide the U.S. Treasury Department with warrants to acquire our common stock as a condition of accepting the grant. Other conditions of the grant include a commitment to retain our employees and maintain their pay rates and benefits for a defined period of time. Additionally, there are limitations on share repurchases and dividends for approximately two years. The program also includes compensation limits for senior executives and other members of our leadership team.
We are grateful to the U.S. Congress and the Administration for recognizing the importance of air cargo and protecting the supply chain at this critical moment. It is a reflection of the value we provide as an industry and a company.
As we plan for the road ahead, we are confident in our ability to continue making a difference in the global recovery. We thank our employees for their ongoing dedication.