10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-16545

Atlas Air Worldwide Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)	13-4146982 (IRS Employer Identification No.)
2000 Westchester Avenue, Purchase, New York (Address of principal executive offices)	10577 (Zip Code)

(914) 701-8000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of June 30, 2011, there were 26,282,856 shares of the registrant’s Common Stock outstanding.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets at June 30, 2011 and December 31, 2010 (unaudited)		1
Consolidated Statements of Operations for the Three and Six Months ended June 30, 2011 and 2010 (unaudited)		2
Consolidated Statements of Cash Flows for the Six Months ended June 30, 2011 and 2010 (unaudited)		3
Consolidated Statements of Stockholders’ Equity as of and for the Six Months ended June 30, 2011 and 2010 (unaudited)		4
Notes to Unaudited Consolidated Financial Statements		5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3. Quantitative and Qualitative Disclosures About Market Risk		27
Item 4. Controls and Procedures		28
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		29
Item 6. Exhibits		29
Signatures		30
Exhibit Index		31
EX-4
EX-31.1
EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Atlas Air Worldwide Holdings, Inc.

Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)

	June 30, 2011			December 31, 2010
Assets
Current Assets
Cash and cash equivalents	$	462,011		$	588,852
Short-term investments		7,739			6,211
Accounts receivable, net of allowance of $1,668 and $1,900, respectively		83,423			78,334
Prepaid maintenance		33,271			26,102
Deferred taxes		3,721			3,721
Prepaid expenses and other current assets		28,430			24,212
Total current assets		618,595			727,432
Property and Equipment
Flight equipment		853,699			766,681
Ground equipment		31,308			29,124
Less: accumulated depreciation		(148,536	)		(138,851	)
Purchase deposits for flight equipment		369,266			336,969
Property and equipment, net		1,105,737			993,923
Other Assets
Long-term investments and accrued interest		130,383			127,094
Deposits and other assets		48,850			45,026
Intangible assets, net		42,364			42,627
Total Assets	$	1,945,929		$	1,936,102
Liabilities and Equity
Current Liabilities
Accounts payable	$	36,984		$	22,954
Accrued liabilities		168,462			149,892
Current portion of long-term debt		51,530			96,197
Total current liabilities		256,976			269,043
Other Liabilities
Long-term debt		364,696			391,036
Deferred taxes		106,681			103,150
Other liabilities		128,136			122,783
Total other liabilities		599,513			616,969
Commitments and contingencies
Equity
Stockholders’ Equity
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued		—			—
Common stock, $0.01 par value; 50,000,000 shares authorized; 27,437,520 and 26,955,923 shares issued, 26,282,856 and 25,937,014, shares outstanding (net of treasury stock), at June 30, 2011 and December 31, 2010, respectively		274			270
Additional paid-in-capital		519,208			505,297
Treasury stock, at cost; 1,154,664 and 1,018,909 shares, respectively		(41,374	)		(32,248	)
Accumulated other comprehensive income		10			458
Retained earnings		607,030			572,666
Total stockholders’ equity		1,085,148			1,046,443
Noncontrolling interest		4,292			3,647
Total equity	$	1,089,440		$	1,050,090
Total Liabilities and Equity	$	1,945,929		$	1,936,102

See accompanying Notes to Unaudited Consolidated Financial Statements

1

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Operating Revenue
ACMI	$	160,442		$	126,829		$	306,477		$	239,232
AMC charter		112,473			109,224			193,649			230,808
Commercial charter		71,067			114,828			136,603			171,481
Dry leasing		2,134			1,849			3,677			3,227
Other		3,458			3,451			6,775			6,665
Total Operating Revenue	$	349,574		$	356,181		$	647,181		$	651,413
Operating Expenses
Aircraft fuel		100,358			83,525			174,525			148,115
Salaries, wages and benefits		61,498			60,071			123,262			121,433
Maintenance, materials and repairs		46,860			39,603			96,929			71,220
Aircraft rent		41,567			38,183			79,921			76,333
Landing fees and other rent		12,603			12,778			23,943			24,487
Depreciation and amortization		8,775			8,567			17,105			17,646
Travel		9,922			7,798			19,044			15,413
Ground handling and airport fees		5,803			6,299			11,105			11,222
Gain on disposal of aircraft		(181	)		(2,158	)		(301	)		(3,380	)
Other		24,750			38,197			47,537			57,475
Total Operating Expenses		311,955			292,863			593,070			539,964
Operating Income		37,619			63,318			54,111			111,449
Non-operating Expenses / (Income)
Interest income		(5,080	)		(5,224	)		(10,196	)		(9,130	)
Interest expense		9,912			10,150			20,208			20,220
Capitalized interest		(6,185	)		(3,517	)		(11,602	)		(6,606	)
Other (income) expense, net		(406	)		213			(364	)		(8,622	)
Total Non-operating Expenses / (Income)		(1,759	)		1,622			(1,954	)		(4,138	)
Income before income taxes		39,378			61,696			56,065			115,587
Income tax expense		14,907			28,920			21,131			49,200
Net Income		24,471			32,776			34,934			66,387
Less: Net income (loss) attributable to noncontrolling interests		624			115			570			(59	)
Net Income Attributable to Common Stockholders	$	23,847		$	32,661		$	34,364		$	66,446
Earnings per share:
Basic	$	0.91		$	1.27		$	1.31		$	2.59
Diluted	$	0.90		$	1.25		$	1.30		$	2.56
Weighted average shares:
Basic		26,269			25,767			26,155			25,676
Diluted		26,491			26,077			26,397			25,985

See accompanying Notes to Unaudited Consolidated Financial Statements

2

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

	For the Six Months Ended
	June 30, 2011			June 30, 2010
Operating Activities:
Net Income Attributable to Common Stockholders	$	34,364		$	66,446
Net income (loss) attributable to noncontrolling interests		570			(59	)
Net Income		34,934			66,387
Adjustments to reconcile Net Income to net cash provided by operating activities:
Depreciation and amortization		17,105			17,646
Amortization of debt discount		2,428			2,670
Amortization of operating lease discount		1,193			1,166
Amortization of debt issuance costs		147			146
Accretion of debt securities discount		(4,112	)		(3,900	)
Provision for allowance for doubtful accounts		45			188
Gain on disposal of aircraft		(301	)		(3,380	)
Deferred taxes		3,824			14,811
Stock-based compensation expense		6,540			7,751
Changes in:
Accounts receivable		(4,081	)		(5,098	)
Prepaid expenses and other current assets		(15,525	)		3,406
Deposits and other assets		(4,254	)		(9,518	)
Accounts payable and accrued liabilities		35,723			49,745
Net cash provided by operating activities		73,666			142,020
Investing Activities:
Capital expenditures		(129,559	)		(34,801	)
Investment in debt securities		—			(100,090	)
Proceeds from short-term investments		3,468			3,212
Proceeds from disposal of aircraft		770			4,610
Net cash used for investing activities		(125,321	)		(127,069	)
Financing Activities:
Proceeds from stock option exercises		4,429			1,335
Purchase of treasury stock		(9,126	)		(5,713	)
Excess tax benefit from stock-based compensation expense		2,946			1,420
Payments of debt		(73,435	)		(21,712	)
Net cash used for financing activities		(75,186	)		(24,670	)
Net decrease in cash and cash equivalents		(126,841	)		(9,719	)
Cash and cash equivalents at the beginning of period		588,852			613,740
Cash and cash equivalents at the end of period	$	462,011		$	604,021

See accompanying Notes to Unaudited Consolidated Financial Statements

3

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Stockholders’ Equity
(in thousands, except per share data)
(Unaudited)

									Accumulated
						Additional			Other					Total
	Common		Treasury			Paid-In			Comprehensive			Retained		Stockholders’			Noncontrolling			Total
	Stock		Stock			Capital			Income			Earnings		Equity			Interest			Equity
Balance at December 31, 2009	$	266	$	(26,394	)	$	481,074		$	471		$	430,856	$	886,273		$	2,484		$	888,757
Net Income Attributable to Common Stockholders		—		—			—			—			66,446		66,446			(59	)		66,387
Other comprehensive loss		—		—			—			(20	)		—		(20	)		(11	)		(31	)
Comprehensive income		—		—			—			—			—		66,426			—			66,356
Stock option and restricted stock compensation		—		—			7,751			—			—		7,751			—			7,751
Purchase of 123,535 shares of treasury stock		—		(5,713	)		—			—			—		(5,713	)		—			(5,713	)
Exercise of 50,489 employee stock options		—		—			1,335			—			—		1,335			—			1,335
Issuance of 196,795 shares of restricted stock		2		—			(2	)		—			—		—			—			—
Tax benefit on restricted stock and stock options		—		—			1,420			—			—		1,420			—			1,420
Balance at June 30, 2010	$	268	$	(32,107	)	$	491,578		$	451		$	497,302	$	957,492		$	2,414		$	959,906

									Accumulated
						Additional			Other					Total
	Common		Treasury			Paid-In			Comprehensive			Retained		Stockholders’			Noncontrolling		Total
	Stock		Stock			Capital			Income			Earnings		Equity			Interest		Equity
Balance at December 31, 2010	$	270	$	(32,248	)	$	505,297		$	458		$	572,666	$	1,046,443		$	3,647	$	1,050,090
Net Income Attributable to Common Stockholders		—		—			—			—			34,364		34,364			570		34,934
Other comprehensive loss		—		—			—			(448	)		—		(448	)		75		(373	)
Comprehensive income		—		—			—			—			—		33,916			—		34,561
Stock option and restricted stock compensation		—		—			6,540			—			—		6,540			—		6,540
Purchase of 135,755 shares of treasury stock		—		(9,126	)		—			—			—		(9,126	)		—		(9,126	)
Exercise of 105,173 employee stock options		—		—			4,429			—			—		4,429			—		4,429
Issuance of 376,424 shares of restricted stock		4		—			(4	)		—			—		—			—		—
Tax benefit on restricted stock and stock options		—		—			2,946			—			—		2,946			—		2,946
Balance at June 30, 2011	$	274	$	(41,374	)	$	519,208		$	10		$	607,030	$	1,085,148		$	4,292	$	1,089,440

See accompanying Notes to Unaudited Consolidated Financial Statements

4

Atlas Air Worldwide Holdings, Inc.

Notes to Unaudited Consolidated Financial Statements
June 30, 2011

1. Basis of Presentation

     Our consolidated financial statements include the accounts of the holding company Atlas Air Worldwide Holdings, Inc. (“AAWW”) and its consolidated subsidiaries. AAWW is the parent company of its principal operating subsidiary, Atlas Air, Inc. (“Atlas”), and of Polar Air Cargo LLC (“Old Polar”). AAWW is also the parent company of several subsidiaries related to our dry leasing services (collectively referred to as “Titan”). In addition, we are the primary beneficiary of Global Supply Systems Limited (“GSS”), a consolidated subsidiary. AAWW has a 51% equity interest and 75% voting interest in Polar Air Cargo Worldwide, Inc. (“Polar”). We record our share of Polar’s results under the equity method of accounting.

     The terms “we,” “us,” “our,” and the “Company” mean AAWW and all entities included in its consolidated financial statements.

     We provide outsourced aircraft and aviation operating services throughout the world, serving Africa, Asia, Australia, Europe, the Middle East, North America and South America through: (i) contractual service arrangements, including contracts through which we provide aircraft to customers and value-added services, including crew, maintenance and insurance (“ACMI”), as well as contracts through which we provide crew, maintenance and insurance, with the customer providing the aircraft (“CMI”); (ii) military charter services (“AMC Charter”); (iii) seasonal, commercial and ad-hoc charter services (“Commercial Charter”); and (iv) dry leasing or sub-leasing of aircraft and engines (“Dry Leasing” or “Dry Lease”).

     The accompanying unaudited consolidated financial statements and related notes (the “Financial Statements”) have been prepared in accordance with the U.S. Securities and Exchange Commission (the “SEC”) requirements for quarterly reports on Form 10-Q, and consequently, exclude certain disclosures normally included in audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated. The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes included in the AAWW Annual Report on Form 10-K for the year ended December 31, 2010, which included additional disclosures and a summary of our significant accounting policies. In our opinion, the Financial Statements contain all adjustments, consisting of normal recurring items, necessary to fairly state the financial position of AAWW and its consolidated subsidiaries as of June 30, 2011, the results of operations for the three and six months ended June 30, 2011 and 2010, cash flows for the six months ended June 30, 2011 and 2010, and shareholders’ equity as of and for the six months ended June 30, 2011 and 2010.

     For interim accounting purposes, we recognize income taxes using an estimated annual effective tax rate.

     Our quarterly results are subject to seasonal and other fluctuations, and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year.

     Except for per share data, all dollar amounts are in thousands unless otherwise noted.

2. Recent Accounting Pronouncements

     In June 2011, the Financial Accounting Standards Board amended its guidance on the presentation of comprehensive income to increase the prominence of items reported in other comprehensive income. The new guidance requires that all components of comprehensive income in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new guidance is effective as of the beginning of 2012 and its adoption will not have any impact on our financial condition, results of operations or cash flows.

3. DHL Investment and Polar

     Polar provides air cargo capacity to its customers, including DHL Network Operations (USA), Inc. (“DHL”), through a blocked-space agreement that began on October 27, 2008. The aggregate carrying value of our Polar investment at June 30, 2011 and December 31, 2010 was $5.3 million and was included within Deposits and other assets.

     Polar currently operates six 747-400 freighter aircraft that are subleased from us. An additional two aircraft are operated by Atlas to support the Polar network and DHL through an alliance agreement whereby Atlas provides ACMI

5

services to Polar. We also provide incremental charter capacity to Polar on an as-needed basis. Atlas and Polar have entered into various agreements under which we provide Polar with crew, maintenance and insurance for the subleased aircraft. Collectively, these service agreements and the subleases are referred to as “Express Network ACMI”. We provide Polar with certain management and administrative services under a shared services agreement. In addition, Polar and Atlas provide each other with sales and ground support services under a general sales and services agreement. The following table summarizes our transactions with Polar:

	For the Three Months Ended				For the Six Months Ended
Revenue and Expenses:	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
ACMI revenue from Polar	$	60,272	$	47,081	$	106,650	$	91,739
Other revenue from Polar	$	2,837	$	2,837	$	5,675	$	5,675
Ground handling and airport fees to Polar	$	312	$	667	$	559	$	1,115

Accounts receivable/payable as of:	June 30, 2011		December 31, 2010
Receivables from Polar	$	3,509	$	8,009
Payables to Polar	$	7,172	$	2,945

4. Concentration of Credit Risk and Significant Customers

     We are exposed to concentration of credit risk by our customers. The following table summarizes our significant exposure to Polar and the U.S. Military Air Mobility Command (“AMC”). We have not experienced credit issues with either of these customers. No other customer accounted for 10.0% or more of our Total Operating Revenue.

	For the Three Months Ended						For the Six Months Ended
Revenue as a % of Total Operating Revenue:	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
AMC		32.2	%		30.7	%		29.9	%		35.4	%
Polar		18.1	%		14.0	%		17.4	%		15.0	%

	For the Three Months Ended						For the Six Months Ended
Revenue as a % of Total ACMI Revenue:	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Polar		37.6	%		37.1	%		34.8	%		38.3	%

Accounts receivable as a % of Total Accounts
receivable, net of allowance, as of:	June 30, 2011			December 31, 2010
AMC		25.1	%		10.5	%
Polar		4.2	%		10.2	%

5. Financial Instruments

     Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are classified in the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2	Other inputs that are observable directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, or inactive quoted prices for identical assets or liabilities in inactive markets;
Level 3	Unobservable inputs reflecting assumptions about the inputs used in pricing the asset or liability.

     We endeavor to utilize the best available information in measuring fair value.

6

     We maintain Cash and cash equivalents and Short-term investments, which include cash on hand, demand deposits, other cash investments that are highly liquid in nature and have original maturities of three months or less at acquisition, certificates of deposit, current portion of debt securities and money market funds. The carrying value for Cash and cash equivalents and Short-term investments is based on cost, which approximates fair value.

     Long-term investments consist of debt securities for which we have both the ability and the intent to hold until maturity. These investments are classified as held-to-maturity and reported at amortized cost. The fair value of our Long-term investments was based on a discounted cash flow analysis using the contractual cash flows of the investments and a discount rate derived from unadjusted quoted interest rates for debt securities of comparable risk. Such debt securities represent investments in Pass-Through Trust Certificates related to enchanced equipment trust certificates (“EETCs”) issued by Atlas in 1998, 1999 and 2000. Interest on debt securities and accretion of discounts using the effective interest method are included in Interest income.

     The fair value of our EETCs was estimated based on Level 3 inputs. We obtained Level 2 inputs of quoted market prices of our equipment notes and used them as a basis for valuing the EETCs.

     The fair value of our pre-delivery deposit (“PDP”) financing facility and term loans was based on a discounted cash flow analysis using current borrowing rates for instruments with similar terms.

     The fair value of our interest rate derivatives was based on Level 2 inputs utilized in expected cash flow models. The incorporated market inputs include the implied forward London InterBank Offered Rate (“LIBOR”) yield curve for the same period as the future interest swap settlements. These derivatives are designated as hedging instruments.

     The following table summarizes the carrying amount, estimated fair value and classification of our financial instruments as of:

	June 30, 2011
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	462,011	$	462,011	$	462,011	$	—	$	—
Short-term investments		7,739		7,739		—		—		7,739
Long-term investments and accrued interest		130,383		159,085		—		—		159,085
	$	600,133	$	628,835	$	462,011	$	—	$	166,824
Liabilities
Interest rate derivatives	$	808	$	808	$	—	$	808	$	—
1998 EETCs		137,156		153,310		—		—		153,310
1999 EETCs		152,444		161,989		—		—		161,989
2000 EETCs		56,865		62,707		—		—		62,707
Term loans		69,761		69,634		—		—		69,634
	$	417,034	$	448,448	$	—	$	808	$	447,640

	December 31, 2010
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	588,852	$	588,852	$	588,852	$	—	$	—
Short-term investments		6,211		6,211		—		—		6,211
Long-term investments and accrued interest		127,094		157,787		—		—		157,787
	$	722,157	$	752,850	$	588,852	$	—	$	163,998
Liabilities
1998 EETCs	$	145,012	$	164,379	$	—	$	—	$	164,379
1999 EETCs		159,043		171,478		—		—		171,478
2000 EETCs		58,485		65,230		—		—		65,230
PDP financing facility		46,871		46,861		—		—		46,861
Term loans		77,822		79,198		—		—		79,198
	$	487,233	$	527,146	$	—	$	—	$	527,146

7

     The following table presents the carrying value, gross unrealized gains and fair value of our long-term investments by contractual maturity as of:

	June 30, 2011						December 31, 2010
			Gross Unrealized						Gross Unrealized
	Carrying Value		Gains		Fair Value		Carrying Value		Gains		Fair Value
Debt securities
Due after five but within ten years	$	130,383	$	28,702	$	159,085	$	73,356	$	18,363	$	91,719
Due after ten years		—		—		—		53,738		12,330		66,068
Total	$	130,383	$	28,702	$	159,085	$	127,094	$	30,693	$	157,787

Interest Rate Derivatives

     We are exposed to changes in interest rates for projected issuances of debt related to the future financing of the Boeing 747-8F aircraft that we have on order. We use forward-starting interest rate swaps to effectively fix the interest rate on an anticipated debt issuance in 2011. The use of forward-starting interest rate swaps effectively converts our floating-rate forecasted debt issuance to a fixed rate basis. When entering into forward-starting interest rate swaps, we become exposed to both credit risk and market risk. We are subject to counterparty credit risk when the value of the forward-starting interest rate swaps are a gain and the risk exists that the counterparty will fail to perform under the terms of the contract. We are subject to market risk with respect to changes in the underlying benchmark interest rate that impacts the fair value of the forward-starting interest rate swaps. We manage our counterparty credit risk by only entering into forward-starting interest rate swaps with major financial institutions with investment-grade credit ratings. We manage our market risk by matching the terms of each forward-starting interest rate swap with a specified expected debt issuance. We do not use derivative instruments for trading or speculative purposes.

     We formally document all relationships between hedging instruments and hedged items, as well as our risk management objectives and strategies for undertaking the hedge. This process includes specific identification of the hedging instrument and the hedged transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness will be assessed. Both at the inception of the hedge and on an ongoing basis, we assess whether the derivatives used in a projected transaction are highly effective in offsetting changes in cash flows or the fair value of hedged items.

     In May 2011, we entered into two forward-starting interest rate swaps with a total notional value of $237.5 million to hedge the risk of changes in quarterly interest payments due to fluctuations in the forward 90-day LIBOR swap rate for anticipated fixed-rate debt issuances in 2011. We designated these forward-starting interest rate swaps as cash flow hedges. Changes in the fair value of the effective portion of the forward-starting interest rate swaps will be recorded as a gain or loss in other comprehensive income (loss) until the underlying hedged item is recognized in net income. We classify both the net earnings and cash flow impact from these forward-starting interest rate swaps consistent with the underlying hedged item. In the event the debt is not issued and the forward-starting interest rate swaps are terminated, any gain or loss from the termination would be recorded in net income immediately. Hedging ineffectiveness and a net earnings impact would occur if the change in the value of the hedge did not offset the change in the value of the underlying hedged item.

     The forward-starting interest rate swaps outstanding as of June 30, 2011 relate to anticipated debt issuances in the fourth quarter of 2011. The fair value of these forward-starting interest rate swaps was a short-term liability of $0.8 million as of June 30, 2011.

     We recorded unrealized pre-tax and after-tax losses of $0.8 million and $0.5 million in Other comprehensive loss for changes in the fair value of our forward-starting interest rate swaps during both the three and six months ended June 30, 2011. There was no ineffectiveness associated with these hedges during the three and six months ended June 30, 2011.

8

6. Accrued Liabilities

     Accrued liabilities consisted of the following as of:

	June 30, 2011		December 31, 2010
Maintenance	$	68,908	$	57,552
Salaries, wages and benefits		24,388		33,542
Aircraft fuel		30,835		17,710
Other		44,331		41,088
Accrued liabilities	$	168,462	$	149,892

7. Segment Reporting

     We have the following reportable segments: ACMI, AMC Charter, Commercial Charter and Dry Leasing. We use an economic performance metric (“Direct Contribution”) that shows the profitability of each segment after allocation of direct ownership costs. Direct Contribution consists of Income before income taxes and excludes the following: special charges, nonrecurring items, gains on the disposal of aircraft, unallocated revenue and unallocated fixed costs. Direct ownership costs include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense related to aircraft debt, interest income on debt securities and aircraft depreciation. Unallocated income and expenses include corporate overhead, non-aircraft depreciation, interest income, foreign exchange gains and losses, other revenue and other non-operating costs, including special items. Management uses Direct Contribution to measure segment profitability as it shows each segment’s contribution to unallocated fixed costs. Each segment has different operating and economic characteristics that are separately reviewed by our senior management.

     Management allocates the costs attributable to aircraft operation and ownership among the various segments based on the aircraft type and activity levels in each segment. Depreciation and amortization expense, aircraft rent, maintenance expense, and other aircraft related expenses are allocated to segments based upon aircraft utilization because individual aircraft are utilized across segments interchangeably. In addition, certain ownership costs are directly apportioned to the ACMI segment. Other allocation methods are standard activity-based methods that are commonly used in the industry.

     The ACMI segment provides aircraft, crew, maintenance and insurance services to customers. Also included in the ACMI segment are the results of operations for CMI, which we began providing in the second quarter of 2010. CMI provides crew, maintenance and insurance services, with the customer providing the aircraft. Under both services, the customers utilize an insured and maintained aircraft with crew in exchange for a guaranteed monthly level of operation at a predetermined rate for a defined period of time. The customer bears the commercial revenue risk and the obligation for other direct operating costs, including fuel. The Direct Contribution from Express Network ACMI flying is reflected as ACMI.

     The AMC Charter segment provides full-planeload charter flights to the U.S. Military. In addition to cargo flights, the AMC Charter segment includes passenger flights, which we began providing in the second quarter of 2011. We also earn commissions on subcontracting certain flying of oversized cargo, or in connection with flying cargo into areas of military conflict where we cannot perform these services on our own. Revenue from the AMC Charter business is typically derived from one-year contracts on a cost-plus basis with the AMC. Our current AMC contract runs from January 1, 2011 through December 31, 2011. Although we are responsible for the direct operating costs of the aircraft, the price paid for fuel consumed during AMC flights is fixed by the U.S. Military. We receive reimbursement from the AMC each month if the price of fuel paid by us to vendors for AMC missions exceeds the fixed price. Alternatively, if the price of fuel paid by us is less than the fixed price, we pay the difference to the AMC each month.

     The Commercial Charter segment provides aircraft charters to freight forwarders, airlines and other air cargo customers. Charters are often paid in advance and we typically bear the direct operating costs.

     The Dry Leasing segment provides for the leasing of aircraft and engines to customers.

     Other represents revenue for services that are not allocated to any segment, including administrative and management support services and flight simulator training.

9

     The following table sets forth Operating Revenue and Direct Contribution for our reportable business segments reconciled to Operating Income and Income before Income Taxes:

	For the Three Months Ended						For the Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Operating Revenue:
ACMI	$	160,442		$	126,829		$	306,477		$	239,232
AMC Charter		112,473			109,224			193,649			230,808
Commercial Charter		71,067			114,828			136,603			171,481
Dry Leasing		2,134			1,849			3,677			3,227
Other		3,458			3,451			6,775			6,665
Total Operating Revenue	$	349,574		$	356,181		$	647,181		$	651,413
Direct Contribution:
ACMI	$	36,795		$	30,894		$	59,066		$	52,288
AMC Charter		19,743			35,666			33,942			76,277
Commercial Charter		8,590			38,487			17,630			52,167
Dry Leasing		1,185			1,255			2,013			2,127
Total Direct Contribution for Reportable Segments		66,313			106,302			112,651			182,859
Add back (subtract):
Unallocated income and expenses		(27,116	)		(46,764	)		(56,887	)		(70,652	)
Gain on disposal of aircraft		181			2,158			301			3,380
Income before Income Taxes		39,378			61,696			56,065			115,587
Add back (subtract):
Interest income		(5,080	)		(5,224	)		(10,196	)		(9,130	)
Interest expense		9,912			10,150			20,208			20,220
Capitalized interest		(6,185	)		(3,517	)		(11,602	)		(6,606	)
Other (Income) Expense, net		(406	)		213			(364	)		(8,622	)
Operating Income	$	37,619		$	63,318		$	54,111		$	111,449

8. Commitments and Contingencies

     In 2006, we entered into an agreement with The Boeing Company (“Boeing”) providing for our purchase of 12 747-8F aircraft (the “Boeing 747-8F Agreement”). The Boeing 747-8F Agreement provided for deliveries of the aircraft to begin in 2010, with all 12 deliveries originally contractually scheduled for delivery by the end of 2011. In addition, the Boeing 747-8F Agreement provides us with rights to purchase up to an additional 14 747-8F aircraft, of which one is being held under option. In 2009, Boeing announced a delay and proposed a new delivery schedule for our deliveries.

     In March 2010, we entered into an agreement with Boeing to reschedule the delivery of our 747-8F aircraft and option aircraft under the Boeing 747-8F Agreement with the first delivery occurring in early 2011.

     In September 2010, Boeing announced a further delay and proposed a new delivery schedule for certain of our deliveries. In July 2011, Boeing proposed an updated delivery schedule which we are reviewing. That proposed schedule shows that our first 747-8F aircraft is to be delivered early in the fourth quarter of 2011. Boeing has agreed with us to suspend payments for the delayed aircraft under the above agreement until a revised delivery and payment schedule has been agreed upon.

9. Labor and Legal Proceedings

Labor

     The pilots, flight engineers and dispatchers of Atlas and Polar are represented by the International Brotherhood of Teamsters (the “IBT”). These employees represented approximately 53.7% of our workforce as of June 30, 2011. We are subject to risks of work interruption or stoppage as permitted by the Railway Labor Act of 1926 (the “Railway Labor Act”) and may incur additional administrative expenses associated with union representation of our employees.

10

     The collective bargaining agreement for Atlas pilots and flight engineers became amendable in 2006. The collective bargaining agreement for Polar pilots and flight engineers became amendable in 2007. While both units have filed Railway Labor Act “Section 6” notices to begin negotiations for amended agreements, those negotiations have been placed on hold in favor of completing the merger of the two crew forces. In 2004, we initiated steps to merge the represented crewmember bargaining units of Atlas and Polar. The respective collective bargaining agreements provide for a seniority integration process and the negotiation of a single collective bargaining agreement (“SCBA”). This seniority list integration process was completed in 2006.

     We received the integrated seniority lists and the parties have concluded negotiations for a SCBA. In accordance with both the Atlas and Polar contracts, an arbitrator was assigned to resolve the few open contract issues that remained after we concluded negotiations. Those issues were submitted to the arbitrator in December 2010 for final and binding interest arbitration. We have continued to coordinate with the IBT to implement the SCBA upon receipt of the arbitrator’s decision, which is expected during the second half of 2011.

     In 2009, the IBT was certified as the collective bargaining representative of the dispatchers employed by Atlas and Polar. Formal negotiations began in 2009 between the IBT and us regarding the first collective bargaining agreement for these dispatchers. Other than the crewmembers and dispatchers, there are no other Atlas or Polar employees represented by a union.

Legal Proceedings

Department of Justice Investigation and Related Litigation

     In 2010, Old Polar entered into a plea agreement with the United States Department of Justice (the “DOJ”) relating to the previously disclosed DOJ investigation concerning alleged manipulation by cargo carriers of fuel surcharges and other rate components for air cargo services (the “DOJ Investigation”). Under the terms of the agreement, Old Polar will pay a fine of $17.4 million, payable in five annual installments, the first of which was made in November 2010. The fine relates to an alleged agreement by Old Polar with respect to fuel surcharges on cargo shipped from the United States to Australia during the time period from January 2000 through April 2003. The United States District Court for the District of Columbia held a hearing on the plea on November 15, 2010. The court accepted the plea and judgment was entered the following day, finalizing the plea agreement, in the amount of $17.4 million as agreed.

     As a result of the DOJ Investigation, the Company and Old Polar have been named defendants, along with a number of other cargo carriers, in several class actions in the United States arising from allegations about the pricing practices of a number of air cargo carriers that have now been consolidated for pre-trial purposes in the United States District Court for the Eastern District of New York. The consolidated complaint alleges, among other things, that the defendants, including the Company and Old Polar, manipulated the market price for air cargo services sold domestically and abroad through the use of surcharges, in violation of United States, state, and European Union antitrust laws. The suit seeks treble damages and injunctive relief. The defendants moved to dismiss the consolidated complaint, and on September 26, 2008, the Magistrate Judge who heard the motion to dismiss issued a decision recommending that the Federal District Court Judge grant the defendants’ motion to dismiss. The Magistrate Judge recommended that plaintiffs’ claims based on the United States antitrust laws be dismissed without prejudice so that plaintiffs have an opportunity to cure the defects in their complaint by pleading more specific facts, if they have any, relevant to their federal claims. The Magistrate Judge recommended that the plaintiffs’ claims based on state and European Union laws be dismissed with prejudice. Both plaintiffs and defendants objected to portions of the Magistrate Judge’s Report and Recommendation. In 2009, the Federal District Court Judge issued an opinion and order, accepting the Magistrate Judge’s Report and Recommendation, except for the Magistrate Judge’s recommendation that the complaint be dismissed in its entirety, instead maintaining the claims under the United States antitrust laws on the grounds that the consolidated complaint was sufficiently detailed to withstand a motion to dismiss. Old Polar and the other defendants moved for reconsideration of that portion of the Federal District Court Judge’s decision which motion was denied on March 22, 2010. The plaintiffs moved to join Polar Air Cargo Worldwide, Inc. as a defendant in this case on February 10, 2011. The Federal District Court Judge granted the plaintiffs’ motion on April 13, 2011. Pre-trial written and document discovery and depositions are ongoing. We are unable to predict the outcome of this litigation.

     In 2007, the Company and Old Polar commenced an adversary proceeding in bankruptcy court against each of the plaintiffs in this class action litigation seeking to enjoin the plaintiffs from prosecuting claims against the Company and Old Polar that arose prior to 2004, the date on which the Company and Old Polar emerged from bankruptcy. In 2007, the plaintiffs consented to the injunctive relief requested and the bankruptcy court entered an order enjoining plaintiffs from prosecuting Company claims arising prior to 2004.

11

     The Company, Old Polar and a number of other cargo carriers have also been named as defendants in civil class action suits in the provinces of British Columbia, Ontario and Quebec, Canada that are substantially similar to the class action suits in the United States. The plaintiffs in the British Columbia case have indicated they do not intend to pursue their lawsuit against the Company and Old Polar. We are unable to reasonably predict the outcome of the litigation in Ontario and Quebec.

     If the Company or Old Polar were to incur an unfavorable outcome in connection with one or more of the matters described above, such outcome is not expected to materially affect our business, financial condition, results of operations, and/or cash flows.

Brazilian Customs Claim

     Old Polar was cited for two alleged customs violations in Sao Paulo, Brazil, relating to shipments of goods dating back to 1999 and 2000. Each claim asserts that goods listed on the flight manifest of two separate Old Polar scheduled service flights were not on board the aircraft upon arrival and therefore were improperly brought into Brazil. The two claims, which also seek unpaid customs duties, taxes and penalties from the date of the alleged infraction, are approximately $12.5 million and $6.8 million, respectively, plus interest based on June 30, 2011 exchange rates.

     In both cases, we believe that the amounts claimed are substantially overstated due to a calculation error when considering the type and amount of goods allegedly missing, among other things. Furthermore, we may seek appropriate indemnity from the shipper in each claim as necessary. In the pending claim for $12.5 million, we received an administrative decision dismissing the claim in its entirety, which remains subject to a mandatory appeal by the Brazil customs authorities.

     We are currently defending these and other Brazilian customs claims and the ultimate disposition of these claims, either individually or in the aggregate, is not expected to materially affect our financial condition, results of operations or cash flows.

Trademark Matters

     Since 2005, we have been involved in ongoing litigation in Europe against Atlas Transport, an unrelated and unaffiliated entity, over the use of the name “Atlas”. Following application by us to register the mark “ATLAS AIR” in the European Union (“EU”), opposition from Atlas Transport and follow-up filings by us, the Office for Harmonization in the Internal Market (“OHIM”), which handles trademark matters in the EU, declared Atlas Transport’s own trademark “ATLAS” partially invalid because of the prior existence of our Benelux trademark registration. In 2008, OHIM’s First Board of Appeal upheld the lower panel’s decision, and Atlas Transport appealed that decision to the EU General Court (formally the Court of First Instance), which upheld the court’s decision on May 18, 2011.

     In 2007, Atlas Transport also filed a lawsuit in the Netherlands challenging the validity of our Benelux trademark. In 2009, following completion of its proceedings, the court issued a judgment in favor of us. Atlas Transport has appealed that decision to the Dutch Court of Appeal, but the judgment took effect immediately upon entry.

     In 2009, Atlas Transport instituted a trademark infringement lawsuit against us in the regional court in Hamburg, Germany. The amended complaint alleges that Atlas Air has been unlawfully using Atlas Transport’s trademark in Germany without permission and should be required to render information on the scope of use and pay compensation. In a supplementary motion, Atlas Transport asserts a cease and desist claim against Atlas Air, to be considered if the court denies the claim for compensation. On May 31, 2011, the court dismissed the case and Atlas Transport has filed an appeal.

     We believe that the ultimate disposition of these claims, either individually or in the aggregate, will not materially affect our financial condition, results of operations or cash flows.

Other

     We have certain other contingencies incident to the ordinary course of business. Management believes that the ultimate disposition of such other contingencies is not expected to materially affect our financial condition, results of operations or cash flows.

12

10. Earnings Per Share

     Basic earnings per share (“EPS”) represents net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period. There were no anti-dilutive restricted shares and options that were out of the money and excluded for the three and six months ended June 30, 2011 and 2010.

     The calculations of basic and diluted EPS were as follows:

	For the Three Months Ended				For the Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Numerator:
Net Income Attributable to Common Stockholders	$	23,847	$	32,661	$	34,364	$	66,446
Denominator:
Basic EPS weighted average shares outstanding		26,269		25,767		26,155		25,676
Effect of dilutive stock options and restricted stock		222		310		242		309
Diluted EPS weighted average shares outstanding		26,491		26,077		26,397		25,985
EPS:
Basic	$	0.91	$	1.27	$	1.31	$	2.59
Diluted	$	0.90	$	1.25	$	1.30	$	2.56

     Diluted shares reflect the potential dilution that could occur from stock options and restricted shares using the treasury stock method. The calculation does not include restricted shares and units in which performance or market conditions were not satisfied of 0.3 million for both the three and six months ended June 30, 2011, and 0.2 million and 0.3 million for the three and six months June 30, 2010, respectively.

11. Comprehensive Income

     Comprehensive income includes changes in the fair value of certain financial derivative instruments, which qualify for hedge accounting, and other items. The differences between net income attributable to common stockholders and comprehensive income were as follows:

	For the Three Months Ended						For the Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Net Income Attributable to Common Stockholders	$	23,847		$	32,661		$	34,364		$	66,446
Unrealized loss on interest rate derivatives		(808	)		—			(808	)		—
Other		(18	)		53			78			(30	)
Income taxes related to items of Other comprehensive loss		302			(14	)		282			10
Total other comprehensive income (loss)		(524	)		39			(448	)		(20	)
Comprehensive income	$	23,323		$	32,700		$	33,916		$	66,426

12. Income Taxes

     Our effective income tax rates were 37.9% and 46.9% for the three months ended June 30, 2011 and 2010, respectively, and were 37.7% and 42.6% for the six months ended June 30, 2011 and 2010, respectively. The changes in the effective rates from 2010 to 2011 were primarily due to non-deductible litigation settlements in 2010. The effective rates differ from the U.S. federal statutory rate due to the income tax impact of global operations, U.S. state income taxes, the non-deductibility of certain expenses for tax purposes, and the relationship of these items to our projected operating results for the year.

13

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion and analysis should be read in conjunction with our unaudited Financial Statements appearing in this report and our audited consolidated financial statements and related notes included in our 2010 Annual Report on Form 10-K.

Background

Certain Terms — Glossary

     The following represents terms and statistics specific to the airline and cargo industries. They are used by management to evaluate and measure operations, results, productivity and efficiency.

Block Hour	The time interval between when an aircraft departs the terminal until it arrives at the destination terminal.
C Check	High-level or “heavy” airframe maintenance checks, which are more intensive in scope than line maintenance, are generally performed between 18 and 24 months depending on aircraft type.
D Check	High-level or “heavy” airframe maintenance checks, which are the most extensive in scope and are generally performed every six to nine years depending on aircraft type.
Revenue Per Block Hour	An amount calculated by dividing operating revenues by Block Hours.
Yield	The average amount a customer pays to fly one tonne of cargo one mile.

Business Overview

     We are a leading global provider of outsourced aircraft and aviation operating services. As such, we manage and operate the world’s largest fleet of Boeing 747 freighters. We provide unique value to our customers by giving them access to highly reliable new production freighters that deliver the lowest unit cost in the marketplace combined with outsourced aircraft operating services that we believe lead the industry in terms of quality and global scale. Our customers include airlines, express delivery providers, freight forwarders, the U.S. military and charter brokers. We provide global services with operations in Africa, Asia, Australia, Europe, the Middle East, North America and South America.

     Our primary service offerings encompass the following:

• ACMI, whereby we provide outsourced aircraft operating solutions, including the provision of an aircraft, crew, maintenance and insurance, while customers assume fuel, demand and Yield risk. Included within ACMI is the provision of Express Network ACMI, whereby we provide 747-400 aircraft to Polar that service the requirements of DHL’s global express operations and meet the needs of other Polar customers;

• CMI, which is also part of our ACMI business segment, whereby we provide outsourced aircraft operating solutions including the provision of crew, maintenance and insurance, while customers provide the aircraft and assume fuel, demand and Yield risk;

• Dry Leasing, whereby we provide aircraft and/or engine leasing solutions to third parties;

• AMC Charter services, whereby we provide charter services for the AMC. The AMC pays a fixed charter fee that includes fuel, insurance, landing fees, overfly and all other operational fees and costs; and

• Commercial Charter, whereby we provide aircraft charters to customers, including brokers, freight forwarders, direct shippers and airlines. The customer pays a fixed charter fee that includes fuel, insurance, landing fees, overfly and all other operational fees and costs.

14

     We look to achieve our growth plans to enhance stakeholder value through:

• Delivering superior service quality to our valued customers;

• Actively managing our fleet with a focus on leading-edge aircraft;

• Diversifying our service offerings;

• Focusing on securing long-term customer contracts with attractive terms;

• Driving significant ongoing efficiencies and productivity improvements;

• Selectively pursuing and evaluating future acquisitions and alliances; and

• Building our brand and increasing our market share.

     See “Business Overview” and “Business Strategy” in our 2010 Annual Report on Form 10-K for additional information.

Business Developments

     Our ACMI results for the first half of 2011, compared to the same period in 2010, were positively impacted by the following events that occurred during 2010 and 2011:

• In May 2010, we began to fly on a CMI basis for SonAir — Serviço Aéreo, S.A. (“SonAir”), an agent of the United States-Africa Energy Association. SonAir is a wholly owned subsidiary of the Sonangol Group, the multinational energy company of Angola. This passenger service, known as the “Houston Express”, operates three weekly nonstop roundtrip flights between Houston, Texas and Luanda, Angola on two customized 747-400 passenger aircraft provided by SonAir.

• In July 2010, we began to fly CMI service for Boeing to operate their Dreamlifter fleet of four modified 747-400 aircraft. These aircraft transport major sub-assemblies for the Boeing 787 Dreamliner aircraft from suppliers around the world to Boeing production facilities in the United States.

• In September 2010, we began ACMI flying for TNT Airways (“TNT”). Under the ACMI agreement, we provide service for TNT’s international express air network, which is based at TNT’s European hub in Liege, Belgium.

• In October 2010, we began ACMI flying for a second 747-400 aircraft for Panalpina Air & Ocean Ltd (“Panalpina”). This aircraft is based at Panalpina’s European hub in Luxembourg.

• In March 2011, we began ACMI flying two additional 747-400 aircraft for DHL to operate in their Express Network ACMI business. This increases the size of our Express Network ACMI flying for DHL from six to eight aircraft.

     AMC demand was exceptionally strong during the first half of 2010, primarily due to the surge in U.S. Military activity in Afghanistan. During that period, we flew a significant number of missions in support of the U.S. Military’s deployment of mine resistant, ambush-protected, all-terrain vehicles (“M-ATV”) from the U.S. to Afghanistan and averaged approximately 1,800 Block Hours a month. We also earned a premium rate for utilizing additional 747-400 aircraft to meet most of this demand. In the first half of 2011, we averaged approximately 1,500 Block Hours per month.

     In May 2011, we began flying passenger charters for the U.S. Military. These charters are similar to our existing AMC Charters in that the AMC pays a fixed charter fee that includes fuel, insurance, landing fees, overfly and all other operational fees and costs. This service utilizes the 747-400 passenger aircraft we took delivery of in January 2011. During June 2011, we purchased a 767-300ER passenger aircraft for this operation.

15

     Commercial Charter Yields and volumes have been impacted by the return of aircraft capacity in the Asian markets during the first half of 2011. As a result, the Commercial Charter Yields were not able to fully absorb the rise in aviation fuel prices that occurred during 2011. While we were able to recover most of this increase in the South American markets through Yields and fuel surcharges, we were not able to fully recover these increases in the Asian markets. Our Commercial Charter Block Hours were impacted by our redeployment of 747-400 aircraft to support increased ACMI flying in 2011. In addition, the cessation of M-ATV flying in June 2010 resulted in fewer opportunities to utilize the return legs of one-way AMC missions for Commercial Charters.

     In January and February 2011, we leased two 747-400 Boeing converted freighters for an average of approximately three and a half years, which were placed in service in April and May of 2011. These two aircraft provide us with increased capacity in both AMC Charter and Commercial Charter to replace aircraft that were reallocated to ACMI during 2011.

     In April and June 2011, Titan purchased two Boeing 737-800 passenger aircraft. Both aircraft are dry leased to customers on a long-term basis.

Results of Operations

Three Months Ended June 30, 2011 and 2010

Operating Statistics

     The following discussion should be read in conjunction with our Financial Statements and other financial information appearing and referred to elsewhere in this report.

     The table below sets forth selected Operating Statistics for the three months ended June 30:

					Increase /			Percent
	2011		2010		(Decrease)			Change
Block Hours
ACMI		26,188		21,733		4,455			20.5	%
AMC Charter		4,924		5,095		(171	)		(3.4	)%
Commercial Charter		3,213		5,125		(1,912	)		(37.3	)%
Other		216		254		(38	)		(15.0	)%
Total Block Hours		34,541		32,207		2,334			7.2	%
Revenue Per Block Hour
ACMI	$	6,127	$	5,836	$	291			5.0	%
AMC Charter		22,842		21,437		1,405			6.6	%
Commercial Charter		22,119		22,405		(286	)		(1.3	)%
Fuel
AMC
Average fuel cost per gallon	$	3.66	$	2.68	$	0.98			36.6	%
Fuel gallons consumed (000s)		16,098		15,672		426			2.7	%
Commercial Charter
Average fuel cost per gallon	$	3.48	$	2.35	$	1.13			48.1	%
Fuel gallons consumed (000s)		11,913		17,653		(5,740	)		(32.5	)%
Fleet (average during the period)
ACMI*		22.1		16.8		5.3			31.5	%
AMC Charter		6.0		5.8		0.2			3.4	%
Commercial Charter		3.2		5.3		(2.1	)		(39.6	)%
Dry Leasing		1.8		1.0		0.8			80.0	%
Operating Aircraft		33.1		28.9		4.2			14.5	%
Out-of-service**		0.2		0.3		(0.1	)		(33.3	)%

*	ACMI average fleet excludes spare aircraft provided by CMI customers.
**	All of our out-of-service aircraft are completely unencumbered. Permanently parked aircraft, all of which are also completely unencumbered, are not included in the operating statistics above.

16

Operating Revenue

     The following table compares our Operating Revenue for the three months ended June 30 (in thousands):

					Increase /			Percent
	2011		2010		(Decrease)			Change
Operating Revenue
ACMI	$	160,442	$	126,829	$	33,613			26.5	%
AMC Charter		112,473		109,224		3,249			3.0	%
Commercial Charter		71,067		114,828		(43,761	)		(38.1	)%
Dry Leasing		2,134		1,849		285			15.4	%
Other		3,458		3,451		7			0.2	%
Total Operating Revenue	$	349,574	$	356,181	$	(6,607	)		(1.9	)%

     ACMI revenue increased $33.6 million, or 26.5%, due to an increase in Block Hours and Revenue per Block Hour. ACMI Block Hours were 26,188 in the second quarter of 2011, compared to 21,733 in 2010, representing an increase of 4,455 Block Hours, or 20.5%. The increase in Block Hours was driven by the startup of ACMI flying for TNT in September 2010, a second aircraft for Panalpina in October 2010 and two incremental aircraft for DHL in March 2011. In addition, we started CMI passenger flights for SonAir in May 2010 and CMI Dreamlifter flights for Boeing in July 2010. In the second quarter of 2011, there was an average of 22.0 747-400 aircraft and 0.1 747-200 aircraft supporting ACMI compared to an average of 16.8 747-400 aircraft and no 747-200 aircraft in 2010. Revenue per Block Hour was $6,127 for the second quarter of 2011, compared to $5,836 for the second quarter of 2010, an increase of $291 per Block Hour, or 5.0%. The increase in Revenue per Block Hour primarily reflects contractual rate increases in existing contracts and higher rates on new customer contracts.

     AMC Charter revenue increased $3.2 million, or 3.0%, due to an increase in Revenue per Block Hour partially offset by a decrease in Block Hours. AMC Charter Revenue per Block Hour increased from $21,437 for the second quarter of 2010 to $22,842 in 2011, an increase of $1,405 per Block Hour, or 6.6%, primarily due to an increase in the average “pegged” fuel price partially offset by the premium earned on M-ATV missions flown on our 747-400 aircraft during 2010. For the second quarter of 2011, the AMC average “pegged” fuel price was $3.66 per gallon compared to an average “pegged” fuel price of $2.68 for the second quarter of 2010. AMC Charter Block Hours were 4,924 in the second quarter of 2011 compared to 5,095 in 2010, a decrease of 171 Block Hours, or 3.4%. The decrease in AMC Block Hours was primarily due to the reduction in AMC demand to support U.S. Military activity in Afghanistan. During the second quarter of 2010, we flew a significant number of missions to support the U.S. Military’s deployment of M-ATVs from the U.S. to Afghanistan. Partially offsetting this decrease was 177 Block Hours for passenger missions for the AMC, which we began flying in May 2011. In the second quarter of 2011, there was an average of 1.7 747-400 aircraft and 4.3 747-200 aircraft supporting AMC Charter compared to an average of 1.9 747-400 aircraft and 3.9 747-200 aircraft in 2010.

     Commercial Charter revenue decreased $43.8 million, or 38.1%, due to a decrease in Block Hours and Revenue per Block Hour. Commercial Charter Block Hours were 3,213 in the second quarter of 2011, compared to 5,125 in 2010, representing a decrease of 1,912 Block Hours, or 37.3%. The decrease in Block Hours was primarily due to our redeployment of 747-400 aircraft to support increased ACMI flying in 2011. In addition, the reduction in AMC one-way missions resulted in fewer opportunities to utilize the return legs for Commercial Charters compared to the second quarter of 2010. We began to offset this decrease in Block Hours when we placed two 747-400BCFs into service during the second quarter of 2011. There was an average of 1.7 747-400 aircraft and 1.5 747-200 aircraft supporting Commercial Charter in the second quarter of 2011, compared to an average of 3.6 747-400 aircraft and 1.7 747-200 aircraft in 2010. Revenue per Block Hour was $22,119 in the second quarter of 2011, compared to $22,405 in 2010, a decrease of $286 per Block Hour, or 1.3%. Commercial Charter Yields in the Asian markets have been impacted by the return of aircraft capacity to these markets in 2011.

17

Operating Expenses

     The following table compares our Operating Expenses for the three months ended June 30 (in thousands):

							Increase /			Percent
	2011			2010			(Decrease)			Change
Operating Expenses
Aircraft fuel	$	100,358		$	83,525		$	16,833			20.2	%
Salaries, wages and benefits		61,498			60,071			1,427			2.4	%
Maintenance, materials and repairs		46,860			39,603			7,257			18.3	%
Aircraft rent		41,567			38,183			3,384			8.9	%
Landing fees and other rent		12,603			12,778			(175	)		(1.4	)%
Depreciation and amortization		8,775			8,567			208			2.4	%
Travel		9,922			7,798			2,124			27.2	%
Ground handling and airport fees		5,803			6,299			(496	)		(7.9	)%
Gain on disposal of aircraft		(181	)		(2,158	)		(1,977	)		91.6	%
Other		24,750			38,197			(13,447	)		(35.2	)%
Total Operating Expenses	$	311,955		$	292,863		$	19,092			6.5	%

     Aircraft fuel increased $16.8 million, or 20.2%, as a result of approximately $30.2 million in fuel price increases partially offset by $13.4 million in decreased consumption. The average fuel price per gallon for the Commercial Charter business was approximately $3.48 for the second quarter of 2011, compared to approximately $2.35 in 2010, an increase of 48.1%. Fuel consumption for this business decreased by 5.7 million gallons, or 32.5%, commensurate with the decrease in Block Hours operated. The average fuel price per gallon for the AMC Charter business was approximately $3.66 in the second quarter of 2011, compared to approximately $2.68 in 2010, an increase of 36.6%. AMC fuel consumption decreased by 0.4 million gallons, or 2.7%, commensurate with the decrease in Block Hours operated. We do not incur fuel expense in our ACMI business as the cost of fuel is borne by the customer.

     Salaries, wages and benefits increased $1.4 million, or 2.4%, primarily driven by higher Block Hours partially offset by lower profit sharing and incentive compensation.

     Maintenance, materials and repairs increased $7.3 million, or 18.3%, due to increased line and other non-heavy maintenance expense of approximately $4.9 million and increased heavy airframe check expense of approximately $3.2 million. Partially offsetting these increases was a $0.8 million reduction in engine overhaul expense. Heavy maintenance events and engine overhauls for the three months ended June 30, 2011 and 2010 were:

					Increase /
Events	2011		2010		(Decrease)
747-200 C Checks		2		1		1
747-400 C Checks		3		1		2
747-400 D Checks		1		1		—
CF6-80 engine overhauls		3		5		(2	)

     Aircraft rent increased $3.4 million, or 8.9%, due to the leasing of additional aircraft and spare engines in 2011.

     Travel increased $2.1 million, or 27.2%, primarily due to the increased cost of international travel and increased ground staff travel related to on-boarding new aircraft and maintenance activities.

     Gain on disposal of aircraft resulted from the sale of retired airframes and engines during the second quarter of 2011 and the sale of previously held for sale spare engines in 2010.

     Other operating expenses decreased $13.4 million, or 35.2%, primarily due to a net accrual for legal settlements of $16.2 million in 2010.

18

Non-operating Expenses / (Income)

     The following table compares our Non-operating Expenses / (Income) for the three months ended June 30 (in thousands):

							Increase /
	2011			2010			(Decrease)			Percent Change
Non-operating Expenses /(Income)
Interest income	$	(5,080	)	$	(5,224	)	$	(144	)		(2.8	)%
Interest expense		9,912			10,150			(238	)		(2.3	)%
Capitalized interest		(6,185	)		(3,517	)		2,668			75.9	%
Other expense (income), net		(406	)		213			619			(290.6	)%

     Capitalized interest increased $2.7 million, or 75.9%, primarily due to higher interest rates on PDP balances outstanding during the period.

     Other expense (income), net increased $0.6 million, or 290.6%, primarily due to an increase in gains on foreign currency transactions in the second quarter of 2011.

     Income taxes. Our effective income tax rates were 37.9% for the three months ended June 30, 2011 and 46.9% for the three months ended June 30, 2010. The change in the effective rate from 2010 to 2011 was primarily due to non-deductible litigation settlements in 2010. Our effective rates differ from the U.S. federal statutory rate primarily due to the income tax impact of global operations, U.S. state income taxes, the non-deductibility of certain expenses for tax purposes, and the relationship of these items to our projected operating results for the year.

Segments

     The following table compares the Direct Contribution for our reportable segments (see Note 7 to our Financial Statements for the reconciliation to Operating income) for the three months ended June 30 (in thousands):

					Increase /
	2011		2010		(Decrease)			Percent Change
Direct Contribution:
ACMI	$	36,795	$	30,894	$	5,901			19.1	%
AMC Charter		19,743		35,666		(15,923	)		(44.6	)%
Commercial Charter		8,590		38,487		(29,897	)		(77.7	)%
Dry Leasing		1,185		1,255		(70	)		(5.6	)%
Total Direct Contribution	$	66,313	$	106,302	$	(39,989	)		(37.6	)%
Unallocated income and expenses	$	27,116	$	46,764	$	(19,648	)		(42.0	)%

ACMI Segment

     Direct Contribution related to the ACMI segment increased $5.9 million, or 19.1%, primarily due to increased Block Hours. During the second quarter of 2011, there was an average of 22.0 747-400 aircraft and 0.1 747-200 aircraft supporting ACMI compared to an average of 16.8 747-400 aircraft and no 747-200 aircraft supporting ACMI in 2010. The increase in Block Hours was driven by the startup of ACMI flying for TNT in September 2010, a second aircraft for Panalpina in October 2010 and two incremental aircraft for DHL in March 2011. In addition, we started CMI passenger flights for SonAir in May 2010 and CMI Dreamlifter flights for Boeing in July 2010. ACMI Direct Contribution was also impacted by increased aircraft ownership costs, line maintenance and crew expenses driven by the increased flying.

AMC Charter Segment

     Direct Contribution related to the AMC Charter segment decreased $15.9 million, or 44.6%, primarily due to the reduction in premiums earned on M-ATV missions flown on our 747-400 aircraft during 2010. During the second quarter of 2011, there was an average of 1.7 747-400 aircraft and 4.3 747-200 aircraft supporting AMC Charter compared to an average of 1.9 747-400 aircraft and 3.9 747-200 aircraft supporting AMC Charter in 2010.

19

Commercial Charter Segment

     Direct Contribution related to the Commercial Charter segment decreased $29.9 million, or 77.7%, primarily due to a decrease in Block Hours and lower Commercial Charter Yields that were negatively impacted by the return of aircraft capacity to the Asian markets coupled with the rise in aviation fuel prices in 2011. In addition, Commercial Charter Direct Contribution was impacted by a reduction in AMC one-way missions resulting in fewer opportunities to utilize the return legs for Commercial Charters compared to the second quarter of 2010. Partially offsetting the decrease in revenue was an improvement in heavy maintenance expense and volume-driven operating costs due to the reduction in Commercial Charter Block Hours flown. During the second quarter of 2011, there was an average of 1.7 747-400 aircraft and 1.5 747-200 aircraft supporting Commercial Charter compared to an average of 3.6 747-400 aircraft and 1.7 747-200 aircraft supporting Commercial Charter in 2010.

Dry Leasing Segment

     Direct Contribution related to the Dry Leasing segment was relatively unchanged.

Unallocated income and expenses

     Unallocated income and expenses decreased $19.6 million, or 42.0%, primarily due to a net accrual for legal settlements of $16.2 million in 2010 and $2.7 million of increased capitalized interest on our PDPs in 2011.

Six Months Ended June 30, 2011 and 2010

Operating Statistics

     The following discussion should be read in conjunction with our Financial Statements and notes thereto and other financial information appearing and referred to elsewhere in this report.

     The table below sets forth selected Operating Statistics for the six months ended June 30:

					Increase /			Percent
	2011		2010		(Decrease)			Change
Block Hours
ACMI		49,887		41,154		8,733			21.2	%
AMC Charter		9,054		10,594		(1,540	)		(14.5	)%
Commercial Charter		6,378		7,941		(1,563	)		(19.7	)%
Non revenue		432		362		70			19.3	%
Total Block Hours		65,751		60,051		5,700			9.5	%
Revenue Per Block Hour
ACMI	$	6,143	$	5,813	$	330			5.7	%
AMC Charter		21,388		21,787		(399	)		(1.8	)%
Commercial Charter		21,418		21,594		(176	)		(0.8	)%
Fuel
AMC
Average fuel cost per gallon	$	3.34	$	2.68	$	0.66			24.6	%
Fuel gallons consumed (000s)		29,463		31,750		(2,287	)		(7.2	)%
Commercial Charter
Average fuel cost per gallon	$	3.27	$	2.31	$	0.96			41.6	%
Fuel gallons consumed (000s)		23,249		27,274		(4,025	)		(14.8	)%

20

					Increase /			Percent
	2011		2010		(Decrease)			Change
Fleet (average during the period)
ACMI*		21.5		16.7		4.8			28.7	%
AMC Charter		5.4		6.7		(1.3	)		(19.4	)%
Commercial Charter		3.4		4.3		(0.9	)		(20.9	)%
Dry Leasing		1.4		0.6		0.8			133.3	%
Operating Aircraft		31.7		28.3		3.4			12.0	%
Out-of-service**		0.5		0.3		0.2			66.7	%

*	ACMI average fleet excludes spare aircraft provided by CMI customers.
**	All of our out-of-service aircraft are completely unencumbered. Permanently parked aircraft, all of which are also completely unencumbered, are not included in the operating statistics above.

Operating Revenue

     The following table compares our Operating Revenue for the six months ended June 30 (in thousands):

					Increase /			Percent
	2011		2010		(Decrease)			Change
Operating Revenue
ACMI	$	306,477	$	239,232	$	67,245			28.1	%
AMC Charter		193,649		230,808		(37,159	)		(16.1	)%
Commercial Charter		136,603		171,481		(34,878	)		(20.3	)%
Dry Leasing		3,677		3,227		450			13.9	%
Other		6,775		6,665		110			1.7	%
Total Operating Revenue	$	647,181	$	651,413	$	(4,232	)		(0.6	)%

     ACMI revenue increased $67.2 million, or 28.1%, due to an increase in Block Hours and Revenue per Block Hour. ACMI Block Hours were 49,887 in the first six months of 2011, compared to 41,154 in 2010, an increase of 8,733 Block Hours, or 21.2%. The increase in Block Hours was driven by the startup of ACMI flying for TNT in September 2010, a second aircraft for Panalpina in October 2010 and two incremental aircraft for DHL in March 2011. In addition, we started CMI passenger flights for SonAir in May 2010 and CMI Dreamlifter flights for Boeing in July 2010. In the first six months of 2011, there was an average of 21.3 747-400 aircraft and 0.2 747-200 aircraft supporting ACMI compared to an average of 16.7 747-400 aircraft and no 747-200 aircraft for the comparable period in 2010. Revenue per Block Hour was $6,143 for the first six months of 2011, compared to $5,813 in 2010, an increase of $330 per Block Hour, or 5.7%. The increase in Revenue per Block Hour primarily reflects contractual rate increases in existing contracts and higher rates on new customer contracts.

     AMC Charter revenue decreased $37.2 million, or 16.1%, due to a decrease in Block Hours and Revenue per Block Hour. AMC Charter Block Hours were 9,054 in the first six months of 2011 compared to 10,594 in 2010, a decrease of 1,540 Block Hours, or 14.5%. AMC demand was exceptionally strong through the first five months of 2010 primarily due to a surge in AMC demand to support U.S. Military activity in Afghanistan. During that period, we flew a significant number of missions to support the U.S. Military’s deployment of M-ATVs from the U.S. to Afghanistan and averaged just over 1,800 Block Hours a month. In early June 2010, we completed our last scheduled M-ATV mission. During the first six months of 2011, we averaged approximately 1,500 Block Hours a month. Partially offsetting this decrease was 177 Block Hours for passenger missions for the AMC, which we began flying in May 2011. AMC Charter Revenue per Block Hour decreased from $21,787 for the first six months of 2010 to $21,388 in 2011, a decrease of $399 per Block Hour, or 1.8%. The decrease in AMC Revenue per Block Hour was the result of premiums earned on M-ATV missions flown on our 747-400 aircraft in 2010 partially offset by an increase in the “pegged” fuel price in 2011. For the first six months of 2011, the AMC average “pegged” fuel price was $3.34 per gallon compared to an average “pegged” fuel price of $2.68 in 2010. In the first six months of 2011, there was an average of 1.3 747-400 aircraft and 4.1 747-200 aircraft supporting AMC Charter compared to an average of 2.5 747-400 aircraft and 4.2 747-200 aircraft in 2010.

     Commercial Charter revenue decreased $34.9 million, or 20.3%, due to a decrease in Block Hours and Revenue per Block Hour. Commercial Charter Block Hours were 6,378 in the first six months of 2011, compared to 7,941 in 2010, representing a decrease of 1,563 Block Hours, or 19.7%. The decrease in Block Hours was primarily due to our redeployment of 747-400 aircraft to support increased ACMI flying in 2011. In addition, the reduction in AMC one-way

21

missions resulted in fewer opportunities to utilize the return legs for Commercial Charters compared to 2010. We began to offset this decrease in Block Hours when we placed two 747-400BCFs into service during the second quarter of 2011. There was an average of 1.9 747-400 aircraft and 1.5 747-200 aircraft supporting Commercial Charter in the first six months of 2011, compared to an average of 2.9 747-400 aircraft and 1.4 747-200 aircraft in 2010. Revenue per Block Hour was $21,418 in the first six months of 2011, compared to $21,594 in 2010, a decrease of $176 per Block Hour, or 0.8%. Commercial Charter Yields in the Asian markets have been impacted by the return of aircraft capacity to these markets in 2011.

Operating Expenses

     The following table compares our Operating Expenses for the six months ended June 30 (in thousands):

							Increase /			Percent
	2011			2010			(Decrease)			Change
Operating Expenses
Aircraft fuel	$	174,525		$	148,115		$	26,410			17.8	%
Salaries, wages and benefits		123,262			121,433			1,829			1.5	%
Maintenance, materials and repairs		96,929			71,220			25,709			36.1	%
Aircraft rent		79,921			76,333			3,588			4.7	%
Landing fees and other rent		23,943			24,487			(544	)		(2.2	)%
Depreciation and amortization		17,105			17,646			(541	)		(3.1	)%
Travel		19,044			15,413			3,631			23.6	%
Ground handling and airport fees		11,105			11,222			(117	)		(1.0	)%
Gain on disposal of aircraft		(301	)		(3,380	)		(3,079	)		(91.1	)%
Other		47,537			57,475			(9,938	)		(17.3	)%
Total Operating Expenses	$	593,070		$	539,964		$	53,106			9.8	%

     Aircraft fuel increased $26.4 million, or 17.8%, as a result of approximately $42.3 million in fuel price increases partially offset by $15.9 million of decreased consumption. The average fuel price per gallon for the Commercial Charter business was approximately $3.27 for the first six months of 2011, compared to approximately $2.31 in 2010, an increase of 41.6%. Fuel consumption for this business decreased by 4.0 million gallons, or 14.8%, commensurate with the decrease in Block Hours operated. The average fuel price per gallon for the AMC Charter business was approximately $3.34 in the first six months of 2011, compared to approximately $2.68 in 2010, an increase of 24.6%. AMC fuel consumption decreased by 2.3 million gallons, or 7.2%, commensurate with the decrease in Block Hours operated in that segment. We do not incur fuel expense in our ACMI business as the cost of fuel is borne by the customer.

     Salaries, wages and benefits increased $1.8 million, or 1.5%, primarily driven by higher Block Hours partially offset by lower profit sharing and incentive compensation.

     Maintenance, materials and repairs increased by $25.7 million, or 36.1%, primarily due to increased line maintenance expense and other non-heavy maintenance expense of approximately $10.4 million, an increase in engine overhauls of approximately $9.0 million and heavy airframe check expense of approximately $6.3 million. Heavy maintenance events and engine overhauls for the six months ended June 30, 2011 and 2010 were:

					Increase /
Events	2011		2010		(Decrease)
747-200 C Checks		2		2		—
747-400 C Checks		4		6		(2	)
747-400 D Checks		4		2		2
CF6-50 engine overhauls		2		—		2
CF6-80 engine overhauls		8		8		—

     Aircraft rent increased $3.6 million, or 4.7%, primarily due to the leasing of additional aircraft and spare engines in 2011.

     Travel increased $3.6 million, or 23.6%, primarily due to increased crew travel resulting from more Block Hours, increased ground staff travel related to on-boarding new aircraft and maintenance activities and the increased cost of international travel.

22

     Gain on disposal of aircraft resulted from the sale of retired airframes and engines during the first half of 2011 compared to the sale of three previously held for sale spare engines and retired engines in 2010.

     Other operating expenses decreased $9.9 million, or 17.3%, primarily related to a net accrual for legal settlements of $16.2 million in 2010 partially offset by an increase in contract services for flight attendants and freight related to the movement of 747-200 spare parts and engines to be utilized on aircraft in lieu of incurring more costly repairs.

Non-operating Expenses / (Income)

     The following table compares our Non-operating Expenses / (Income) for the six months ended June 30 (in thousands):

							Increase /			Percent
	2011			2010			(Decrease)			Change
Non-operating Expenses /(Income)
Interest income	$	(10,196	)	$	(9,130	)	$	1,066			11.7	%
Interest expense		20,208			20,220			(12	)		(0.1	)%
Capitalized interest		(11,602	)		(6,606	)		4,996			75.6	%
Other expense (income), net		(364	)		(8,622	)		(8,258	)		(95.8	)%

     Interest income increased $1.1 million, or 11.7%, primarily due to the income generated from an increase in Long-term investments in debt securities (see Note 5 to our Financial Statements).

     Capitalized interest increased by $5.0 million, or 75.6%, primarily due to higher interest rates on PDP balances outstanding during the period.

     Other expense (income), net decreased by $8.3 million, primarily due to an $8.8 million litigation settlement received in 2010.

     Income taxes. Our effective income tax rates were 37.7% and 42.6% for the six months ended June 30, 2011 and 2010, respectively. The change in the effective rate from 2010 to 2011 was primarily due to non-deductible litigation settlements in 2010. Our effective rates differ from the U.S. federal statutory rate primarily due to the income tax impact of global operations, U.S. state income taxes, the non-deductibility of certain expenses for tax purposes, and the relationship of these items to our projected operating results for the year.

Segments

     The following table compares the Direct Contribution for our reportable segments (see Note 7 to our Financial Statements for the reconciliation to Operating income) for the six months ended June 30 (in thousands):

					Increase /			Percent
	2011		2010		(Decrease)			Change
Direct Contribution:
ACMI	$	59,066	$	52,288	$	6,778			13.0	%
AMC Charter		33,942		76,277		(42,335	)		(55.5	)%
Commercial Charter		17,630		52,167		(34,537	)		(66.2	)%
Dry Leasing		2,013		2,127		(114	)		(5.4	)%
Total Direct Contribution	$	112,651	$	182,859	$	(70,208	)		(38.4	)%
Unallocated income and expenses	$	56,887	$	70,652	$	(13,765	)		(19.5	)%

ACMI Segment

     Direct Contribution related to the ACMI segment increased $6.8 million, or 13.0% primarily due to increased Block Hours. During the first six months of 2011, there was an average of 21.3 747-400 aircraft and 0.2 747-200 aircraft supporting ACMI compared to an average of 16.7 747-400 aircraft and no 747-200 aircraft supporting ACMI in 2010. The increase in Block Hours was driven by the startup of ACMI flying for TNT in September 2010, a second aircraft for

23

Panalpina in October 2010 and two incremental aircraft for DHL at the end of March 2011. In addition, we started CMI passenger flights for SonAir in May 2010 and CMI Dreamlifter flights for Boeing in July 2010. ACMI Direct Contribution was also impacted by increased aircraft ownership costs, crew and line maintenance expenses driven by the increased flying and the timing of heavy maintenance expense.

AMC Charter Segment

     Direct Contribution related to the AMC Charter segment decreased $42.3 million, or 55.5%, primarily due to the reduction in premiums earned on M-ATV missions flown on our 747-400 aircraft during 2010. Also impacting Direct Contribution was a reduction in crew cost from lower AMC Block Hours. During the first six months of 2011, there was an average of 1.3 747-400 aircraft and 4.1 747-200 aircraft supporting AMC Charter operations compared to an average of 2.5 747-400 aircraft and 4.2 747-200 aircraft supporting the AMC Charter business in 2010.

Commercial Charter Segment

     Direct Contribution related to the Commercial Charter segment decreased $34.5 million, or 66.2%, primarily due to a decrease in Block Hours and lower Commercial Charter Yields that were negatively impacted by the return of aircraft capacity to the Asian markets coupled with the rise in aviation fuel prices in 2011. In addition, Commercial Charter Direct Contribution was impacted by a reduction in AMC one-way missions resulting in fewer opportunities to utilize the return legs for Commercial Charters compared to the second quarter of 2010. Partially offsetting the decrease in revenue was an improvement in volume-driven operating costs due to the reduction in Commercial Charter Block Hours flown. We also experienced lower ownership costs from the redeployment of 747-400 aircraft to the ACMI segment in the first six months of 2011. During the first six months of 2011, there was an average of 1.9 747-400 aircraft and 1.5 747-200 aircraft supporting Commercial Charter compared to an average of 2.9 747-400 aircraft and 1.4 747-200 aircraft supporting Commercial Charter in 2010.

Dry Leasing Segment

     Direct Contribution related to the Dry Leasing segment was relatively unchanged.

Unallocated income and expenses

     Unallocated income and expenses decreased $13.8 million, or 19.5%, primarily due to a net accrual for legal settlements of $16.2 million in 2010 and $5.0 million of increased capitalized interest on our PDPs in 2011. Partially offsetting these items was an $8.8 million litigation settlement received in 2010.

Reconciliation of GAAP to non-GAAP Financial Measures

     To supplement our Financial Statements presented in accordance with GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include Adjusted Net Income Attributable to Common Stockholders and Adjusted Diluted EPS, which exclude certain items. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

     We use these non-GAAP financial measures in assessing the performance of our ongoing operations and in planning and forecasting future periods. We believe that these adjusted measures provide meaningful information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance.

24

     The following is a reconciliation of Net Income Attributable to Common Stockholders and Diluted EPS to the corresponding non-GAAP measures (in thousands, except per share data):

	For the Three Months Ended
							Percent
	June 30, 2011			June 30, 2010			Change
Net Income Attributable to Common Stockholders	$	23,847		$	32,661			(27.0	%)
After-tax impact from:
Net accrual for legal settlements		—			16,200
Gain on disposal of aircraft		(115	)		(1,360	)
Adjusted Net Income Attributable to Common Stockholders	$	23,732		$	47,501			(50.0	%)
Diluted EPS	$	0.90		$	1.25			(28.0	%)
After-tax impact from:
Net accrual for legal settlements		—			0.62
Gain on disposal of aircraft		—			(0.05	)
Adjusted Diluted EPS	$	0.90		$	1.82			(50.6	%)

	For the Six Months Ended
							Percent
	June 30, 2011			June 30, 2010			Change
Net Income Attributable to Common Stockholders	$	34,364		$	66,446			(48.3	%)
After-tax impact from:
Net accrual for legal settlements		—			16,200
Litigation settlement received		—			(5,513	)
Gain on disposal of aircraft		(192	)		(2,129	)
Adjusted Net Income Attributable to Common Stockholders	$	34,172		$	75,004			(54.4	%)
Diluted EPS	$	1.30		$	2.56			(49.2	%)
After-tax impact from:
Net accrual for legal settlements		—			0.63
Litigation settlement received		—			(0.21	)
Gain on disposal of aircraft		—			(0.09	)
Adjusted Diluted EPS	$	1.30		$	2.89			(54.9	%)

Liquidity and Capital Resources

     At June 30, 2011, we had cash and cash equivalents of $462.0 million, compared to $588.9 million at December 31, 2010, a decrease of $126.9 million, or 21.5%. The decrease was driven by net cash used for investing activities of $125.3 million and net cash used for financing activities of $75.2 million, partially offset by cash provided by operating activities of $73.7 million.

     In February 2011, we entered into a term loan commitment in the amount of $240 million for a period of twelve years with a syndicate of four banks (the “2011 Term Loan”). The 2011 Term Loan, when drawn, will be collateralized by a mortgage on two future 747-8F aircraft deliveries.

     In April 2011, we repaid $46.9 million of our PDP financing facility.

25

     Operating Activities. Net cash provided by operating activities for the first six months of 2011 was $73.7 million, compared to $142.0 million for 2010. The decrease was primarily due to a reduction in Net income, excluding non-cash items and an increase in Prepaid expenses and other current assets.

     Investing Activities. Net cash used for investing activities was $125.3 million for the first six months of 2011, consisting primarily of capital expenditures of $129.6 million, which included capitalized interest on our 747-8F aircraft order of $11.6 million, partially offset by proceeds from short-term investments of $3.5 million. Capital expenditures for the first six months of 2011 were funded through working capital. Net cash used for investing activities was $127.1 million for the first six months of 2010, consisting primarily of capital expenditures of $34.8 million, which included capitalized interest on our Boeing 747-8F aircraft order of $6.6 million, and $100.1 million of investments in debt securities, partially offset by proceeds from the sale of aircraft of $4.6 million. Capital expenditures for the first six months of 2010 were funded through working capital, although we subsequently funded $8.1 million for the 757-200SF that we purchased with a term loan.

     Financing Activities. Net cash used for financing activities was $75.2 million for the first six months of 2011, which primarily reflects $73.4 million of payments on debt obligations and $9.1 million in purchases of treasury stock to settle employment taxes on the vesting of restricted stock for management, partially offset by proceeds from stock option exercises of $4.4 million. Net cash used for financing activities was $24.7 million for the first six months of 2010, which primarily reflected $21.7 million of payments on debt obligations and $5.7 million in purchases of treasury stock to settle employment taxes on the vesting of restricted stock for management.

     We consider cash on hand and short-term investments, our PDP financing facility and net cash generated from operations to be sufficient to meet our debt and lease obligations and to fund expected capital expenditures during 2011. Capital expenditures for the remainder of 2011 are expected to be approximately $63.4 million, which excludes PDPs, aircraft and capitalized interest. Our 747-8F aircraft PDP requirements have currently been suspended until we agree on a new delivery and payment schedule with Boeing.

     We may access external sources of capital from time to time depending on our cash requirements, assessments of current and anticipated market conditions, and the after-tax cost of capital. To that end, we filed a shelf registration statement with the SEC in 2009 that enables us to sell up to $500 million of debt and/or equity securities over the subsequent three years, depending on market conditions, our capital needs and other factors. Approximately $112.6 million of net proceeds from our stock offering in the fourth quarter of 2009 was drawn down from this shelf registration statement. Our access to capital markets can be adversely impacted by prevailing economic conditions and by financial, business and other factors, some of which are beyond our control. Additionally, our borrowing costs are affected by market conditions and may be adversely impacted by a tightening in credit markets.

     Our U.S. cash income tax payments in 2011 will be commensurate with our earnings and limitations on the utilization of net operating losses. As a result of recently enacted tax legislation, we can deduct 100% of the cost of qualified assets placed in service during 2011 or 2012 and 50% of the cost of qualified assets placed in service during 2013. Based upon a delivery schedule proposed by Boeing, we expect a substantial portion of our order for new 747-8F aircraft will qualify for this bonus tax depreciation, which would reduce or eliminate our U.S. federal income tax payments starting in the year we take delivery of qualified aircraft. As a result, we expect to receive a refund of almost all U.S. federal cash income tax paid in 2010 and 2011. Furthermore, our business operations are subject to income tax in several non-U.S. jurisdictions, but we believe that these operations will not result in any significant non-U.S. income tax payments in 2011.

Contractual Obligations and Debt Agreements

     See our 2010 Annual Report on Form 10-K for a tabular disclosure of our contractual obligations as of December 31, 2010 and a description of our debt obligations and amendments thereto.

     On February 11, 2011, we entered into the 2011 Term Loan commitment in the amount of $240 million for a period of twelve years with a syndicate of four banks. The 2011 Term Loan, when drawn, will be collateralized by a mortgage on two future 747-8F aircraft deliveries. In connection with entering into the 2011 Term Loan, we have agreed to pay usual and customary commitment and other fees. Borrowings under the 2011 Term Loan will accrue interest at a variable rate, payable quarterly, at LIBOR plus a margin. The 2011 Term Loan contains customary covenants and events of default. Upon the occurrence and during the continuance of an event of default, the 2011 Term Loan is cross-defaulted to our PDP financing facilities.

26

Off-Balance Sheet Arrangements

     Sixteen of our thirty-four operating aircraft are under operating leases (this excludes aircraft provided by CMI customers). Six are leased through trusts established specifically to purchase, finance and lease aircraft to us. These leasing entities meet the criteria for variable interest entities. All fixed price options were restructured to reflect a fair market value purchase option, and as such, we are not the primary beneficiary of the leasing entities. We are generally not the primary beneficiary of the leasing entities if the lease terms are consistent with market terms at the inception of the lease and the leases do not include a residual value guarantee, fixed-price purchase option or similar feature that would obligate us to absorb decreases in value or entitle us to participate in increases in the value of the aircraft. We have not consolidated any additional aircraft in the related trusts upon application of accounting for consolidations, because we are not the primary beneficiary based on the fact that all fixed price options were restructured to reflect a fair market value purchase option. In addition, we reviewed the other eleven Atlas aircraft that are under operating leases but not financed through a trust and determined that none of them would be consolidated upon the application of accounting for consolidations. Our maximum exposure under all operating leases is the remaining lease payments, which amounts are reflected in future lease commitments described in Note 10 to the audited consolidated financial statements in the AAWW Annual Report on Form 10-K.

     There were no material changes in our off-balance sheet arrangements during the three months ended June 30, 2011.

Recent Accounting Pronouncements

     See Note 2 to our Financial Statements for a discussion of recent accounting pronouncements.

Forward Looking Statements

     This Quarterly Report on Form 10-Q (this “Report”), as well as other reports, releases and written and oral communications issued or made from time to time by or on behalf of AAWW, contain statements that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements are based on management’s beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate” and similar expressions used in this Report that do not relate to historical facts are intended to identify forward-looking statements.

     The forward-looking statements in this Report are not representations or guarantees of future performance and involve certain risks, uncertainties and assumptions. Such risks, uncertainties and assumptions include, but are not limited to, those described in our Annual Report on Form 10-K for the year ended December 31, 2010. Many of such factors are beyond AAWW’s control and are difficult to predict. As a result, AAWW’s future actions, financial position, results of operations and the market price for shares of AAWW’s common stock could differ materially from those expressed in any forward-looking statements. Readers are therefore cautioned not to place undue reliance on forward-looking statements. AAWW does not intend to publicly update any forward-looking statements that may be made from time to time by, or on behalf of, AAWW, whether as a result of new information, future events or otherwise, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     For additional discussion of our exposure to market risk, refer to Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” included in our 2010 Annual Report on Form 10-K.

Interest Rate Risk

     During the second quarter of 2011, we began to hedge the variability of forecasted interest payments associated with changes in interest rates through the date of an anticipated debt issuance in 2011 using forward-starting interest swaps. In May 2011, we entered into two forward-starting interest rate swaps with a total notional value of $237.5 million with terms calling for us to receive interest quarterly at a variable rate equal to the forward 90-day LIBOR swap rate and to pay interest quarterly at a fixed rate. The forward-starting interest swaps effectively fix the interest rate on $237.5 million of an anticipated debt issuance in 2011.

     Assuming a hypothetical ten percent increase in interest rates at June 30, 2011, the fair value of the forward-starting interest rate swaps would increase by approximately $5.0 million to a net asset of $4.2 million. Conversely, assuming a

27

hypothetical ten percent decrease in interest rates at June 30, 2011, the fair value of the forward-starting interest rate swaps would decrease by approximately $5.2 million to a net liability of $6.0 million.

     When entering into forward-starting interest rate swaps, we become exposed to both counterparty credit risk and market risk. We are subject to counterparty credit risk when the value of the forward-starting interest rate swap represents a gain and the risk exists that the counterparty will fail to perform under the terms of the contract. We manage our counterparty credit risk by only entering into forward-starting interest rate swaps with major financial institutions with investment-grade credit ratings. We are subject to market risk with respect to changes in the underlying benchmark interest rate that impacts the fair value of the forward-starting interest rate swaps. We manage market risk by matching the terms of the forward-starting interest rate swaps with the critical terms of the expected debt issuance.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of June 30, 2011. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

     There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended June 30, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

28

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     With respect to the fiscal quarter ended June 30, 2011, the information required in response to this Item is set forth in Note 9 to our Financial Statements and such information is incorporated herein by reference. Such description contains all of the information required with respect hereto.

ITEM 6. EXHIBITS

  a. Exhibits

     See accompanying Exhibit Index included after the signature page of this report for a list of exhibits filed or furnished with this report.

29

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Atlas Air Worldwide Holdings, Inc.
Dated: August 2, 2011	/s/ William J. Flynn
	William J. Flynn
	President and Chief Executive Officer
Dated: August 2, 2011	/s/ Spencer Schwartz
	Spencer Schwartz
	Senior Vice President and Chief Financial Officer

30

EXHIBIT INDEX

Exhibit
Number	Description
4	Facility Agreement among Atlas Air, Inc. (as Borrower), Each Loan Participant Identified on Schedule I Thereto, Norddeutsche Landesbank Girozentrale (as Agent) and Bank of Utah (as Security Trustee).
10.1	Atlas Air Worldwide Holdings, Inc. 2007 Incentive Plan (as amended), incorporated by reference to Exhibit 10 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 21, 2011.
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer, furnished herewith.
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer, furnished herewith.
32.1	Section 1350 Certifications, furnished herewith.
101.INS	XBRL Instance Document. *
101.SCH	XBRL Taxonomy Extension Schema Document. *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document. *
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. *
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document. *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document. *

* Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheet at June 30, 2011 and December 31, 2010, (ii) Consolidated Statements of Operations for the quarters and six months ended June 30, 2011 and 2010, (iii) Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010, (iv) Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2011 and 2010 and (v) Notes to Unaudited Consolidated Financial Statements. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

31

EX-4

Exhibit 4

FACILITY AGREEMENT
[Atlas/747-8F2011]

Dated as of

February 10, 2011

among

ATLAS AIR, INC.,
Borrower,

EACH LOAN PARTICIPANT
IDENTIFIED ON SCHEDULE I HERETO,

Loan Participants,

NORDDEUTSCHE LANDESBANK GIROZENTRALE,

as Agent,

and

BANK OF UTAH,
Security Trustee

Norddeutsche Landesbank Girozentrale
Credit Agricole Corporate and Investment Bank
BNP Paribas
DekaBank Deutsche Girozentrale
Underwriters

Re: Financing of Two Boeing 747-8F Aircraft

TABLE OF CONTENTS

		Page
SECTION 1	CERTAIN DEFINITIONS	1
SECTION 2	THE LOAN; BORROWER'S NOTICE OF DELIVERY DATES;
	CLOSING PROCEDURE	2
SECTION 3	LOAN ECONOMICS	6
SECTION 4	CONDITIONS	16
SECTION 5	CLOSING PROCEDURE	22
SECTION 6	EXTENT OF INTEREST OF HOLDERS	23
SECTION 7	REPRESENTATION AND WARRANTIES	23
SECTION 8	INDEMNITIES; ETC	27
SECTION 9	COVENANTS OF THE BORROWER	35
SECTION 10	NOTICES	38
SECTION 11	GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
	JURY TRIAL	38
SECTION 12	INVOICES AND PAYMENT OF EXPENSES	39
SECTION 13	SECTION 1110 COMPLIANCE	40
SECTION 14	CONFIDENTIALITY	40
SECTION 15	NONDISTURBANCE	41
SECTION 16	MISCELLANEOUS	41
SECTION 17	PATRIOT ACT; MONEY LAUNDERING	44
SECTION 18	REGISTRATIONS WITH THE INTERNATIONAL REGISTRY	44
SECTION 19	THE AGENT	44
Schedules:
I.	Notice and Account Information
II.	Commitments
III.	Tax Provisions
Exhibit A -	Form of Borrowing Notice
Exhibit B -	Form of Assignment Agreement
Exhibit C -	Form of Loan Certificates
Exhibit D -	Form of Guarantee
Exhibit E -	Form of Mortgage
Appendix X -	Definitions and Rules of Usage

i

FACILITY AGREEMENT [Atlas/747-8F 2011]

     THIS FACILITY AGREEMENT [Atlas/747-8F 2011] (this “Agreement”) dated as of February 10, 2011 among (i) Atlas Air, Inc., a Delaware corporation (the “Borrower”), (ii) each Loan Participant identified on Schedule I hereto (collectively, together with their successors and permitted assigns, the “Loan Participants”), (iii) Norddeutsche Landesbank Girozentrale, as Agent hereunder (together with its successors hereunder in such capacity, the “Agent”) and (iv) Bank of Utah, as Security Trustee hereunder (together with its successors hereunder in such capacity, the “Security Trustee”).

W I T N E S S E T H:

     WHEREAS, certain terms are used herein as defined in Section 1 hereof; and

     WHEREAS, the Borrower will be acquiring certain Boeing 747-8F aircraft from the manufacturer thereof and intends to finance the payment of the purchase price therefor with, among other things, the proceeds of the loans to be made by the Loan Participants hereunder; and

     WHEREAS, the Loan Participants are willing to make such loans on the terms and conditions provided here, including the granting to the Security Trustee of a mortgage lien on such aircraft contemporaneously with the acquisition thereof pursuant to a Mortgage and Security Agreement in respect of each Designated Aircraft in substantially the form of Exhibit E hereto (prior to its execution and delivery, in the form of such Exhibit and, thereafter as executed and delivered (and thereafter supplemented), the “Mortgage”).

     NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

     SECTION 1 Certain Definitions.

     Except as otherwise defined in this Agreement, including its annexes, schedules and exhibits, terms used herein in capitalized form shall have the meanings attributed thereto in Appendix X to the Mortgage for each Designated Aircraft, as applicable, and the rules of usage specified therein shall be applicable to this Agreement. In addition, the following terms shall have the following meanings:

     “Designated Aircraft” shall mean one or both of the following, as the context requires:(i) the Boeing 747-8F aircraft bearing manufacturer’s serial number ____* and FAA registration No. ____* (“Aircraft No. 1”), equipped with four Engines, currently scheduled for delivery in July 2011, such aircraft being delivered to the Borrower under the Aircraft Purchase Agreement, and (ii) the Boeing 747-8F aircraft bearing manufacturer’s serial number ____ *

* Manufacturer’s Serial Numbers and United States Registration Numbers to be advised.

[Facility Agreement [Atlas/747-8F 2011]]

and FAA registration No.           * (“Aircraft No. 2”), equipped with four Engines, currently scheduled for delivery in September 2011, such aircraft being delivered to the Borrower under the Aircraft Purchase Agreement, each a “Designated Aircraft” and collectively, the “Designated Aircraft”. From and after the Delivery Date of each such aircraft, the term “Designated Aircraft” shall mean each such “Aircraft” as defined in its related Mortgage Supplement(s).

     “Applicable Margin” shall be (i) for any Type A Loan Certificate of any Series, the sum of the Liquidity Margin applicable to such Loan Certificate of such Series plus 1.65% per annum; and (ii) for any Type B Loan Certificate of any Series, 2.95% per annum, subject, in each case, to Section 3(b)(iv).

     “Appraisals” shall mean, for any Designated Aircraft, desktop appraisals of the Dollar base value (determined in accordance with standard ISTAT methodologies and assuming half-life condition of such Designated Aircraft obtained by the Borrower from the Appraisers at the Borrower’s own cost and expense.

     “Appraisers” shall mean Aircraft Value Analysis Company, Avitas, Inc. and Ascend Worldwide Ltd., or such other appraisal firm(s) agreed by the Borrower and the Agent.

     “Average Base Value” shall mean, for any Designated Aircraft and as at any date of determination, the average of base values set out in the Appraisals as calculated by the Agent.

     “Commitment Termination Date” for each Designated Aircraft shall be December 31, 2011.

     “Engines” shall mean (i) initially, as to any Designated Aircraft, the General Electric GEnx-2B67 engines originally installed thereon and (ii) at any later date of determination as to any Designated Aircraft, the “Engines” as defined in its associated Mortgage.

     “Participation Percentage” shall mean, for any Loan Participant, and for any Designated Aircraft, the percentage set next to the name of such Loan Participant for such Designated Aircraft on Schedule II hereto.

     SECTION 2 The Loan; Borrower’s Notice of Delivery Dates; Closing Procedure.

          (a) Commitment; Loan Certificates; Special Funding Elections.

               (i) Subject to the terms and conditions of this Agreement, each Loan Participant agrees to make a secured loan to the Borrower in respect of each Designated Aircraft (herein called, for such Designated Aircraft, a “Loan”) on a date to be designated pursuant to Section 2(b)(i) hereof, but in no event later than the Commitment Termination Date for such Designated Aircraft, in an amount in Dollars up to its

* Manufacturer’s Serial Numbers and United States Registration Numbers to be advised.

2

[Facility Agreement [Atlas/747-8F 2011]]

Participation Percentage multiplied by the lesser of (i) $120,000,000 and (ii) 75% of the Average Base Value of such Designated Aircraft, as such Average Base Value is determined on or about, but no earlier than, the date that is 35 days prior to the Delivery Date of such Designated Aircraft (for any Loan Participant, and for any Designated Aircraft, its “Commitment” for such Designated Aircraft), and to receive, as evidence of each Loan, Loan Certificate(s) of the applicable Type and Series in the amount of such Loan.

               (ii) The Loan Certificates shall be issued by reference to a particular “Type” and “Series”. The “Type” of any Loan Certificate, designated as “Type A” or “Type B”. shall indicate whether such Loan Certificate is held by a Type A Loan Participant or a Type B Loan Participant The “Series” of any Loan Certificate shall indicate the Designated Aircraft in respect of which such Loan Certificate was issued, with a particular Series being denoted by reference to such Designated Aircraft’s manufacturer serial number. The Type and Series of a Loan Certificate shall be indicated on the face of such Loan Certificate. Each Loan and the related Commitment may be designated as being of a Type and Series of its related Loan Certificates.

               (iii) Schedule I hereto sets out the Type of Loan Certificates that each Loan Participant has irrevocably elected to receive on behalf of itself and its successors and assigns. Any Loan Certificate initially issued to a Type A Loan Participant shall be and remain a Type A Loan Certificate, and any Loan Certificate initially issued to a Type B Loan Participant shall be and remain a Type B Loan Certificate. A Loan Certificate, once issued as a particular Type, shall only be transferred and reissued as such Type, entitling its Holder to the rights, and subjecting such Holder to the obligations, applicable to such Type only, as further set forth herein.

          (b) Funding Procedures.

               (i) In connection with the financing of each Designated Aircraft hereunder, the Borrower agrees to give the Agent at least three (or, in the case the Borrower elects to have the related Loan bear interest at a Fixed Rate, five) Business Days’ prior written notice (which notice, to be effective on any Business Day, must be received no later than 9:00 a.m. New York time) of the anticipated Delivery Date for such Designated Aircraft (for any Designated Aircraft and its related Series, its “Funding Date”), which date shall be a Business Day not later than the Commitment Termination Date, and which notice shall be in substantially the form of the Notice of Borrowing attached hereto as Exhibit A. Unless previously elected pursuant to Section 3(b)(iii)(5) or 3(c)(ii), respectively, the Notice of Borrowing shall if desired by the Borrower, identify whether the Borrower elects a Fixed Rate to be applicable to the related Loan. The Agent shall promptly provide a copy of such Notice of Borrowing to the relevant Loan Participants.

               (ii) In order to facilitate the timely closing of the transactions contemplated hereby, for each Designated Aircraft, the Borrower, by delivery of the Notice of Borrowing for such Designated Aircraft to the Agent, irrevocably instructs the Loan Participants to: (A) wire transfer (for receipt by no later than 9:00 a.m. New York

3

[Facility Agreement [Atlas/747-8F 2011]]

City time) on the Funding Date for such Designated Aircraft its Commitment for such Designated Aircraft by the wiring of immediately available funds (reference: Atlas/747-8F 2011) to the account of the Security Trustee specified on Schedule I (the “Account”); (B) in the case of any Type A Loan Participant, enter into arrangements to establish its Liquidity Margin for the related Loan (if it has not already done so); and (C) if the Borrower shall have elected a Fixed Rate, enter into a Swap Transaction on the terms set forth herein for its portion of such Designated Aircraft’s Loan (if it has not already done so).

               (iii) The funds so paid by each such Loan Participant (the “Deposit”) into the Account for any Designated Aircraft are to be held by the Security Trustee for account of such Loan Participant. Subject to paragraph (vi) below, upon the satisfaction (as determined by each Loan Participant) of the conditions precedent set forth in Section 4 hereof in respect of the applicable Designated Aircraft, such Loan Participant (or its special counsel acting on its behalf) shall instruct the Security Trustee to disburse the Deposit for application of its Commitment for such Designated Aircraft in the financing as contemplated by Section 2(c) hereof.

               (iv) If, for any reason, the Designated Aircraft to be financed hereunder on its Funding Date shall not be so financed, the Deposit for such Designated Aircraft, and earnings thereon, will be invested and reinvested by the Security Trustee at the sole direction, for the account, and at the risk of the Borrower in an overnight investment selected by the Borrower and reasonably acceptable to the Agent and the Security Trustee. Upon the Borrower’s oral (to be confirmed in writing) instructions, earnings on any such investments shall be applied to the Borrower’s payment obligations to each Loan Participant under this Section 2(b) to the extent of such earnings.

               (v) If the actual Delivery Date for any Designated Aircraft is a date falling after the Funding Date for such Designated Aircraft, the Borrower shall pay interest hereunder to each Loan Participant on the amount of its Deposit transferred to the Security Trustee for each Loan Certificate as indicated on Schedule 1 to the Notice of Borrowing for the period from and including the Funding Date for such Designated Aircraft to but excluding the earlier of (A) the Delivery Date for such Designated Aircraft or (B) the Cutoff Date (as defined below). For each Loan Participant, such interest shall accrue on the amount of such Loan Participant’s Commitment at the applicable Applicable Rate established for such Loan. Interest on the Commitments accrued pursuant to the preceding sentence shall (I) if accrued to the Delivery Date for the applicable Designated Aircraft, be paid on the first Interest Payment Date for such Aircraft and (II) if accrued to the Cutoff Date, be due and payable to each Loan Participant on such date.

               (vi) If for any reason, other than the failure of any Loan Participant to comply with the terms hereof, the Delivery Date for any Designated Aircraft shall not have occurred on or prior to five Business Days after the Funding Date for such Designated Aircraft (the “Cutoff Date”), the Borrower hereby irrevocably agrees that such Loan Participant may cancel, terminate or otherwise unwind its funding arrangements made in the London interbank market or otherwise to fund its Commitment

4

[Facility Agreement [Atlas/747-8F 2011]]

on the Funding Date for such Designated Aircraft (including, for any Type A Loan Participant, its related liquidity arrangements) and, if applicable, such Loan Participant may cancel, terminate or otherwise unwind the related Swap Transaction, and such Loan Participant may notify the Security Trustee thereof, and the Security Trustee shall return its Commitment for such Designated Aircraft to it, subject, however, to such Loan Participant’s continuing commitment to fund as provided herein.

               (vii) In the event of the occurrence of the events described in paragraph (vi) above, the Borrower agrees to pay promptly (but in any event within three Business Days of the relevant Cutoff Date):

(A)	any Break Amount incurred by the relevant Loan Participant (for which purpose such Loan Participant shall be deemed to have the amount of its Commitment prepaid as a funded Loan); and
(B)	without duplication of the amounts covered by the preceding clause (A), all reasonable out-of-pocket costs and expenses incurred by such Loan Participant (including, without limitation, reasonable legal costs and expenses) to the extent payable pursuant to Section 12 hereof.

          (c) Subject to the terms and conditions of this Agreement, and simultaneous with receipt by the Borrower of the Loan for any Designated Aircraft pursuant to this Section 2, the Borrower shall authorize the delivery and filing for record at the FAA of the Mortgage and/or the related Mortgage Supplement for such Designated Aircraft. On the Delivery Date for each Designated Aircraft specified in the Borrower’s notice referred to in Section 2(b)(i), subject to the terms and conditions of this Agreement, each Loan Participant agrees, and hereby directs the Security Trustee, to pay the amount of its Commitment for the Aircraft to the Borrower by wire transferring such amounts to the Aircraft Manufacturer’s account identified by the Borrower in the Notice of Borrowing, or to such other account as the Borrower shall direct the Security Trustee in writing, upon closing.

          (d) If an Event of Default shall have occurred and be continuing (i) in me case of an Event of Default described in Section 8.06 or 8.07 of the Mortgage, the Commitments in respect of each Designated Aircraft shall automatically terminate (without any notice or other act by the Agent or any Loan Participant) and (ii) in the case of any other Event of Default, the Agent, acting on instruction of the Majority in Interest of Holders, may terminate the Commitments in respect of any Designated Aircraft by notifying the Borrower thereof, whereupon, in the case of a Type A Loan Participant, Liquidity Break Amount, if any, shall be payable as provided in Section 3(c)(ii).

          (e) The closing with respect to the financing of each Designated Aircraft shall take place at the offices of Vedder Price P.C., 1633 Broadway, New York, New York 10019.

     SECTION 3 Loan Economics.

          (a) Principal Amortization. Annex A for the Loan Certificates for the Series issued in respect of any Designated Aircraft (and the related Schedule 1 of the Mortgage

5

[Facility Agreement [Atlas/747-8F 2011]]

Supplement for such Designated Aircraft) shall be calculated using a mortgage-style (level payments of principal and interest) methodology utilizing the Benchmark Rate for such Loan Certificates and amortizing as follows: the Loan Certificates of each Series shall amortize over twelve years on a quarterly basis on each Interest Payment Date (the first such amortizing payment to be made on the first Interest Payment Date next following the Funding Date of such Loan) to a balloon payment of $30,000,000 (in aggregate principal amount for all Loan Certificates for such Series) payable on the last (48^th) such installment. The “Benchmark Rate” for the Loan Certificates of each Series shall be: the lesser of (A) (1) if the Borrower shall have elected to have the related Loan initially bear interest at a Fixed Rate, pursuant to Section 3(b) hereof, the blended Fixed Rate payable on the Type A Loan Certificates and the Type B Loan Certificates; or (2) if the Borrower shall not have so elected, the blended initial Floating Rate payable on the Type A Loan Certificates and the Type B Loan Certificates and (B) 7% per annum. The Agent, using the Benchmark Rate as so determined, shall determine the Annex A for the Loan Certificates of each Series (and the related Schedule 1 of the Mortgage Supplement for the related Aircraft) on the basis specified in this Section 3(a) and shall confirm such proposed schedules with the Borrower. Promptly after the determination thereof, the Agent shall advise the Borrower and the applicable Loan Participants of the Benchmark Rate and resulting amortization schedules.

          (b) Interest. The Borrower shall, subject to the terms and conditions of this Section 3(b), have the right to select an initial Floating Rate or a Fixed Rate for the Loan.

               (i) Floating Rate. If the Borrower shall not have notified the Loan Participants of its request, pursuant to the Notice of Borrowing for any Designated Aircraft, to have the Loan bear interest at a fixed rate, then the Applicable Rate for each Loan and related Series of Loan Certificates shall be, for each Interest Period relating to such Series, the Floating Rate for such Interest Period. Interest on each Loan payable by reference to the Floating Rate shall be payable quarterly in arrears on each Interest Payment Date relating to such Series and shall be calculated on the basis of a year of 360 days and actual number of days elapsed.

               (ii) Fixed Rate Setting. The Borrower may notify the Agent of its request, pursuant to the Notice of Borrowing for the Loan in respect of any Designated Aircraft, to have such Loan bear interest at a fixed rate (a “Fixed Rate Notice”), which Fixed Rate shall be fixed two Business Days prior to the Funding Date of such Designated Aircraft and be effective on such Funding Date (the “Swap Effective Date”). Upon delivery by the Borrower of a Fixed Rate Notice to the Agent, the following procedures shall apply to determine the “Swap Rate”:

                    (1) The Agent will notify the Loan Participants of the Swap Effective Date and provide a copy of the Fixed Rate Notice to each thereof. No later than 10:00 a.m. New York time on the fourth Business Day prior to the Funding Date for the applicable Designated Aircraft, the Agent will notify the Borrower (with a copy to the Loan Participants) of a single fixed rate of interest (the “Agent Quote”) for the Swap Rate applicable to the Loan for such Designated Aircraft. The Agent Quote shall be agreed to by each Loan Participant and shall be derived on the basis of an Internal Swap Transaction

6

[Facility Agreement [Atlas/747-8F 2011]]

(giving effect to the anticipated amortization, maturity and Swap Effective Date of such Loan). In accordance with timing procedures to be agreed, the Borrower shall either accept or reject the Agent Quote; provided, that acceptance of the Agent Quote over the telephone shall be deemed a legally valid and binding acceptance thereof by the Borrower. If the Borrower accepts such Agent Quote, such interest rate will be the “Swap Rate” for the applicable Loan effective on the Swap Effective Date.

                    (2) The Agent shall promptly notify the Loan Participants and Security Trustee of the Swap Rate, if any, for the applicable Loan determined in accordance with the above procedures.

                    (3) During the period prior to the Funding Date in respect of any Designated Aircraft, the parties hereto will further contemplate entering into a mutually acceptable arrangement designed to enable the Borrower to hedge or otherwise lock-in an interest rate in respect of the Loan to be made on such Funding Date on a forward basis.

                    (iii) Fixed Rate. If the Applicable Rate for any Series of Loan Certificates and the related Loan is a Fixed Rate:

                    (1) Interest on the Loan shall be payable quarterly in arrears on each Interest Payment Date and shall be calculated on the basis of a year of 360 day year consisting of 12 30-day months.

                    (2) The Fixed Rate on a Fixed Rate Loan shall be subject to adjustment as provided in clause (v) below.

                    (3) On the date (i) of any prepayment of Loan Certificates pursuant to the Mortgage or (ii) of any acceleration of Loan Certificates pursuant to the Mortgage, the Agent will request that each relevant Swap Counterparty settle-out (or mark-to-market) its Swap Transaction in whole or in part (in the case of a partial prepayment of Loan Certificates, and to the extent thereof) and in furtherance thereof use commercially reasonable efforts to cause such Loan Participant to advise the Agent and the Borrower by 11:00 a.m., New York time, on such date (the “Settlement Date”) of the Swap Break Amount applicable to such event.

                    (4) Each Loan Participant agrees that, so long as no Special Default or Event of Default shall have occurred and be continuing, it shall promptly pay to the Borrower at such account as the Borrower may specify any Swap Breakage Gain in respect of any Series of Loan Certificates (or its related Commitment), except that it may first deduct therefrom any amounts then due to it (or the other Loan Participants) under the Operative Documents and apply any amount so retained to the satisfaction thereof. Each Holder may retain any Swap Breakage Gain that arises after the occurrence of an Event of Default or a Special Default as security for the obligations of the Borrower until the earlier of (i) the

7

[Facility Agreement [Atlas/747-8F 2011]]

date that such Event of Default or Special Default is cured by the Borrower, promptly following which date such amount shall be paid over to the Borrower, or (ii) the date that Section 9.07 of the Mortgage shall be applicable, promptly following which date such amounts shall be remitted to the Security Trustee for application as provided in such Section 9.07.

                    (5) Upon the request of the Borrower to the Agent, the Agent shall obtain from each Loan Participant a good faith written estimate of the Swap Breakage Loss or Swap Breakage Gain, as the case may be, in connection with the occurrence, or anticipated occurrence, of any event contemplated by the Operative Documents that might give rise to an obligation to pay Swap Breakage Loss or to receive Swap Breakage Gain.

                    (6) Upon determination by a Loan Participant of any Swap Breakage Loss or Swap Breakage Gain payable to or by it, as the case may be, such Loan Participant will provide to the Borrower a certificate, certifying such Swap Breakage Loss or Swap Breakage Gain, which certified amount shall be determined in accordance with the procedures set out in the definition of “Swap Break Amount”.

               (iv) Margin Adjustment.

                    (1) The Applicable Margin is subject to adjustment for each Loan Participant to preserve such Loan Participant’s net return on capital based on its internal risk models if and to the extent the Aircraft is reregistered outside of an Approved Country (as defined below) and the resulting security package fails to provide (i) to the Security Trustee the same degree and quality of security as available under the law of an Approved Country and (ii) to such Loan Participant the Basel II treatment and the Basel III treatment (each as internally determined in good faith by such Loan Participant) required to support the internal risk “score” afforded by such resulting security package. Any determination of a need for such an adjustment shall be communicated to the Security Trustee and the Borrower promptly following notice by the Borrower of any such reregistration (either proposed or actual) and shall be effective immediately upon such reregistration. The determination of any such adjustment by a Loan Participant (including as to its internal modeling and Basel II and/or Basel III application) shall be conclusive absent fraud or manifest error. Any such adjustment may be to increase or to decrease the Applicable Margin, and the Loan Participants agree to recalculate any applicable adjustment at the time of any reregistration; provided that the Applicable Margin shall automatically revert to the original “Applicable Margin” hereunder in the event the Aircraft is reregistered in an Approved Country. “Approved Country” means any of the United Kingdom and the United States; provided that any such country shall upon 90 days written notice from the Agent to the Borrower cease to be an Approved Country if there shall have occurred therein a change in law or interpretation that has a material adverse effect on the grant, perfection, priority or enforceability of liens on aircraft collateral registered in such country. Notwithstanding anything to

8

[Facility Agreement [Atlas/747-8F 2011]]

the contrary contained herein, no upward adjustment of the Applicable Margin by any Loan Participant pursuant to this Section 3(b)(iv)(l) shall exceed the highest adjustment as would be applicable to a Loan Participant domiciled in any of France, Germany, the Netherlands, the United Kingdom or the United States.

                    (2) A Loan Participant intending to make a claim for an Applicable Margin adjustment pursuant to Section 3(b)(iv)(l) shall, within 30 days after receipt of written notice of any proposed or actual reregistration, provide written notice to the Agent and the Borrower in writing of the event by reason of which it is entitled to do so (the “Adjustment Notice”); provided, that: (x) the Adjustment Notice shall describe the events giving rise to such adjustment, the basis for determining such adjustment and the amount thereof, together with a statement that the determinations made in respect of such adjustment comply with the provisions of this Section 3(b)(iv); and (y) such Loan Participant shall not be required to disclose any confidential information relating to the organization of its affairs, or its capital structure or return on capital.

               (v) Fixed Rate Adjustment. If any Series of Loan Certificates and the related Loan shall bear interest at a Fixed Rate, such rate shall be as provided in the definition of Fixed Rate, adjusted automatically by the amount of any increase or decrease of the Applicable Margin as determined pursuant to clause (iv) above. Any adjustment effected by the preceding sentence shall be calculated by the Agent, shall be notified promptly to the Security Trustee and the Borrower and the Loan Participants, and such calculation shall be conclusive absent manifest error.

               (vi) Past Due Interest. All amounts due and payable by Borrower under the Operative Documents that are not paid when due shall bear interest at the Past Due Rate, payable on demand.

          (c) Liquidity Costs.

               (i) Subject to clause (ii) below, the Liquidity Margin for the Type A Loan Certificates and the related Loan in respect of any Series shall be established two Business Days prior to the Delivery Date for such Designated Aircraft.

               (ii) The Liquidity Margin for the Type A Loan Certificates and the related Loan for any Series may be “forward fixed” by the Borrower upon request to the Type A Loan Participants. Insofar as the actual Funding Date for the Loan to be made in respect of such Designated Aircraft is unknown, the related Liquidity Margin will have built-in flexibility to allow the Funding Date to occur within a period commencing on or about the anticipated delivery date of such Designated Aircraft and ending on the Commitment Termination Date for such Designated Aircraft (or such earlier date designated by the Borrower), and the related Liquidity Margin will be priced accordingly.

          (d) Structuring Fees. The Borrower agrees to pay to, or for account of, the Underwriters the structuring fee as specified in the Fee Letter.

9

[Facility Agreement [Atlas/747-8F 2011]]

          (e) Commitment Fees. The Borrower agrees to pay a commitment fee to the Security Trustee for account of the Loan Participants in an amount equal to 85 basis points per annum, calculated on the basis of a year of 360 days and actual days elapsed in respect of the unutilized maximum Commitments of the Loan Participants for each Designated Aircraft. Accrued commitment fees shall be payable (i) quarterly on the 10th day of each April, July, October and, if the Commitments in respect of each Designated Aircraft have not been fully drawn by such date, the Commitment Termination Date (or, if any such day is not a Business Day, the next following Business Day) and (ii) on the Delivery Date of such Designated Aircraft. Commitment fees for any Designated Aircraft shall commence their accrual from and including the date hereof and shall continue to accrue to but excluding the earlier of (x) the date of the making of the Loan in respect of such Designated Aircraft to be financed hereunder or (y) the Commitment Termination Date for such Designated Aircraft. The Security Trustee agrees to pay to each Loan Participant such Loan Participant’s commitment fee received by it promptly following receipt thereof. Commitment fees shall be non-refundable.

          (f) Agency Fee. The Borrower agrees to pay an agency fee to the Agent in an amount equal to $3500 per year, which fee shall be payable annually in advance to the Agent on the date of the making of the Loan in respect of the first Designated Aircraft to be financed hereunder and each of the anniversary dates thereof (or, if such day is not a Business Day, the next following Business Day). Such fee shall not be refundable. The agency fee specified in this Section 3(f) shall cease to be payable to the Agent from and after the date the Loan Certificates in respect of each Designated Aircraft shall have been paid in full.

          (g) LIBOR Break Amounts. The Borrower shall indemnify each Loan Participant against any cost, loss or liability incurred by that Loan Participant or deemed incurred by that Loan Participant under this Section 3(g) (characterized as a “negative” LIBOR Break Amount) as a result of:

          (i) funding, or making arrangements to fund, its participation in an Advance requested by the Borrower in a Notice of Borrowing for any Designated Aircraft but not made for any reason (other than by reason of default by that Loan Participant alone);

          (ii) the Loan (or part of the Loan) for any Designated Aircraft being repaid on a date other than an Interest Payment Date;

          (iii) the Maturity Date of the Loan for any Designated Aircraft not being also an Interest Payment Date; or

          (iv) the Loan (or part of the Loan) for any Designated Aircraft not being prepaid in accordance with a notice of prepayment given by the Borrower,

in each case including, without limitation, in relation to funds borrowed or mobilized, the liquidation or redeployment of any deposits taken or made, and/or the loss of margin, which amount shall be payable on the dates specified herein for payment of LIBOR Break Amount. All “negative” LIBOR Break Amounts hereunder shall be equal to the excess, if any, of (i) the amount of interest that otherwise would have accrued on the principal amount so paid, prepaid or

10

[Facility Agreement [Atlas/747-8F 2011]]

not borrowed for the period from the date of such payment, prepayment or failure to borrow to the last day of the then current Interest Period for the Loan in respect of the applicable Designated Aircraft (or, in the case of a failure to borrow, the Interest Period for such Loan that would have commenced on the date specified for such borrowing) at the applicable LIBOR rate provided for herein (excluding the Applicable Margin) over (ii) the amount of interest that otherwise would have accrued on such principal amount at a rate per annum equal to the interest component of the amount the applicable Loan Participant would have bid in the London interbank market for Dollar deposits of leading banks in amounts comparable to such principal amount and with maturities comparable to such period (as reasonably determined by such Loan Participant). Any amount payable by Borrower under this Section 3(g) shall be referred to as a “LIBOR Break Amount”.

          (h) Liquidity Break Amount. The Borrower shall indemnify each Type A Loan Participant against any cost, loss or liability incurred by that Type A Loan Participant or deemed incurred by that Type A Loan Participant under this Section 3(h) as a result of any Liquidity Event. The amount of such indemnity shall be determined for each Series (or its related Commitment), and shall be equal to the cumulative amount of the present values of the interest amount for each (whole or partial) Interest Period relating to such Series as to which a Liquidity Margin applies and which succeeds the date of such Liquidity Event, calculated at a per annum rate equal to the Liquidity Reserve Differential that would have accrued and been payable on the last day of such Interest Period on the amount so paid or prepaid or Commitment cancelled in respect of such Series over the remaining balance of the refinancing term (through the Maturity Date for such Series) of such Loan. Any calculation by an affected Type A Loan Participant required by this definition shall be conclusive (and without the necessity for such Type A Loan Participant to disclose the manner or inputs for its determining the same); provided, that such affected Type A Loan Participant will furnish to the Borrower an officer’s certificate from a duly authorized officer stating that Liquidity Break Amount has been incurred and listing the Liquidity Break Amount, which furnishing of such amount in such officer’s certificate shall be deemed a certification by such Type A Loan Participant that the determinants for calculating the Liquidity Reserve Differential were based on its Treasury-assessed liquidity costs as at the applicable dates and that the calculation thereof was made on a non-discriminatory basis and in accordance with this provision; there will be no further calculation or disclosure of refinancing practice in order to evidence or verify the actual liquidity breakage losses. There shall be no “Liquidity Breakage Gain”. Interest calculated as aforesaid shall be computed on the basis of a year of 360 days and actual number of days elapsed. The amount of such indemnity shall be determined by each Type A Loan Participant and shall be conclusive absent manifest error; provided that the furnishing by any Type A Loan Participant of any Liquidity Reserve Differential amount shall be deemed a certification by such Type A Loan Participant that the determinants for calculating the Liquidity Reserve Differential were based on its Treasury-assessed liquidity costs as at the applicable dates, that such assessment was made on a nondiscriminatory basis, and that the calculation thereof was made in accordance with this Agreement. Any amount payable by Borrower under this Section 3(h) shall be referred to as a “Liquidity Break Amount”. As amongst the Type A Loan Participants, insofar as the Liquidity Break Amount is calculated on the weighted average of their individual Liquidity Margins, the Liquidity Break Amount payable to each Type A Loan Participant shall be paid to them on the basis of their individual Liquidity Margins, and the Security Trustee agrees to make payments on account of the Liquidity Break Amount to each Type A Loan Participant accordingly, it being

11

[Facility Agreement [Atlas/747-8F 2011]]

agreed that the Security Trustee may rely on the written direction of the Agent for the allocation of such amounts.

          (i) LTV Test.

                     (i) An LTV Test will be performed on each Designated Aircraft on:

                    (1) The fourth anniversary of the Delivery Date for such Designated Aircraft (the “First LTV Test Date”): and

                    (2) The eighth anniversary of the Delivery Date for such Designated Aircraft (the “Second LTV Test Date”: the First LTV Test Date and the Second LTV Test Date being referred to collectively herein as the “LTV Test Dates”).

               (ii) When an LTV Test is conducted for any Designated Aircraft pursuant to the preceding paragraph (i), and the resulting LTV for such Designated Aircraft is more than (x) in the case of the First LTV Test Date, 83.75% or (y) in the case of the Second LTV Test Date, 73.75%, then the Borrower shall prepay the Loans in respect of such Designated Aircraft on the Interest Payment Date falling on or about the applicable LTV Test Date in an amount necessary to reduce the LTV for such Designated Aircraft to the stipulated percentage, such prepayment to be accompanied by accrued interest thereon and any associated Break Amount (other than any Liquidity Break Amount, which shall not be payable in connection with any such prepayment).

               (iii) The loan to value test (the “LTV Test”) will be calculated as the percentage (the “LTV”) derived by dividing the then outstanding Loan in respect of the Series relating to any Designated Aircraft by the arithmetic average of the Dollar base values (determined in accordance with standard ISTAT methodologies) of such Designated Aircraft as determined by a desktop half-life appraisal by each of Ascend, AVITAS and AVAC, each of which appraisals shall be dated ten Business Days prior to the applicable LTV Test Date.

               (iv) Each LTV Test will be arranged by the Agent in a manner such that the results thereof will be available no later than ten Business Days prior to the applicable LTV Test Date, and the costs of the related appraisals shall be paid by the Borrower.

               (v) The principal amounts to be prepaid under Section 3(i)(ii) above in respect of the Loan of any Series shall be applied pro rata amongst all remaining installments of such Loan; provided that, at the Borrower’s option and subject to payment by the Borrower of any associated Break Amount (calculated as though the related Loan Certificates were being repaid and reborrowed with the resulting amortization schedule as hereafter provided), the Borrower may direct the Agent to recalculate the amortization schedules for the Loan Certificates in respect of such Series to provide that the remaining principal amount is repaid on a level mortgage-style basis calculated on the same basis as the original amortization schedule for the Loans in respect of such Series as provided in Section 3(a) hereof. If such amortization schedules are so recalculated and the Borrower

12

[Facility Agreement [Atlas/747-8F 2011]]

has approved them, the resulting schedules shall be incorporated in the related Loan Certificates by an allonge executed and delivered by the Borrower, and the related amortization schedule attached to the related Mortgage Supplement shall be amended by an appropriate instrument prepared by the Agent and reasonably satisfactory to the Borrower.

          (j) Right of Repayment and Cancellation in Relation to a Single Loan Participant. If:

                    (1) any sum payable to any Loan Participant by the Borrower is required to be increased under paragraph (d) of Schedule III hereto; or

                    (2) any Loan Participant claims indemnification from the Borrower under Section 8(c) hereof, or

                    (3) the Market Disruption Floating Interest Rate or the Market Disruption Fixed Interest Rate quoted by any Type B Loan Participant after the occurrence of a Market Disruption Event is deemed unacceptably high by the Borrower, acting reasonably;

then the Borrower may, while the circumstance giving rise to the requirement or indemnification continues, upon not less than 30 days (or such shorter period as the relevant Loan Participant may agree) prior notice to the Agent and such Loan Participant either (1) cancel the commitment of that Loan Participant and repay that Loan Participant’s Loans together with accrued Commitment Fee, if any, accrued interest thereon, Break Amount, if any, the Prepayment Fee, if any, and such Loan Participant’s allocable share of all other amounts due and owing by the Borrower under the Operative Documents or (2) cause that Loan Participant to transfer its Loans, Commitments and other rights and obligations hereunder to a transferee designated by the Borrower and permitted under Section 16(c) for a purchase price equal to the outstanding amount of principal owed to such Loan Participant as of the relevant date of transfer together with any accrued and unpaid Commitment Fee, accrued interest, Break Amount thereon and the Prepayment Fee, if any. In the case of any prepayment effected pursuant to clause (1) or (2) of this Section 3(j), (x) in respect of the Break Amount payable to any Type A Loan Participant in association therewith, only 50% of the component thereof constituting Liquidity Break Amount shall be payable; provided, that, as to any such Liquidity Break Amount calculation, the Liquidity Reserve Differential shall not include the reduction of 0.25% per annum set forth in the definition thereof and (y) in respect of the Prepayment Fee (if any) payable to any Type B Loan Participant in association therewith, only 50% of such Prepayment Fee shall be payable.

          (k) Yield Protection.

           (i) If with respect to any Interest Period relating to any Series and any Type B Loan Certificate of such Series:

                    (1) the Agent (acting on advice of the Type B Loan Participants, each acting reasonably and in good faith) determines (which determination shall be binding and conclusive on all parties) that, by reason of circumstances affecting the London interbank market or any other applicable

13

[Facility Agreement [Atlas/747-8F 2011]]

financial market, adequate and reasonable means do not exist for ascertaining the LIBOR rate for such period; or

          (2) the Holder of such Type B Loan Certificate, acting reasonably and in good faith, advises the Agent that the LIBOR rate as determined in accordance with the provisions of the Mortgage will not adequately and fairly reflect the cost to such Holder of maintaining or funding its Loan in line with prudent banking practice for such Interest Period; provided, that such inadequacy is the result of circumstances affecting the relevant interbank market generally and is not directly and solely the result of a deterioration in the financial condition of such Holder,

(each, a “Market Disruption Event”), then (x) the Agent shall promptly notify the Borrower and (y) so long as such circumstances shall continue, the portion of the Loan that relates to such Type B Loan Certificate shall bear interest, for each Interest Period of the related Series (A) in the case of a Floating Rate Loan, at the cost of funds of such Holder for such Interest Period (determined as provided in paragraph (ii) below), expressed as a percentage rate per annum, plus the Applicable Margin (applicable to Type B Loan Certificates of such Series) (the “Market Disruption Floating Interest Rate”) and (B) in the case of a Fixed Rate Loan, at the Fixed Rate applicable to such Type and Series of Loan Certificates plus an amount equal to the difference of (I) the cost of funds of such Holder for such Interest Period (determined as provided in paragraph (ii) below), expressed as a percentage rate per annum minus (II) the LIBOR rate for such Interest Period (the “Market Disruption Fixed Interest Rate”).

          (ii) If the provisions of this Section 3(k) are applicable, then each affected Holder shall report, as provided in paragraph (iv) below, to the Agent its cost of funds for such Interest Period and, based on the report of each such Holder as to such cost of funds, the Agent shall calculate the weighted average thereof. Promptly following the calculation of such average, the Agent shall advise the Borrower and the affected Holders thereof.

          (iii) The report by any Holder of a Type B Loan Certificate to the Agent of its cost of funds for any Interest Period shall be conclusive, absent manifest error, and shall constitute a certification by such Holder that the interest rate so provided is an accurate, fair and non-discriminatory calculation of its Treasury-assessed funding costs for such period.

          (iv) If the provisions of this Section 3(k) are applicable, each Type B Loan Participant shall report to the Agent its cost of funds for each affected Interest Period as soon as practicable and, in any event, prior to the first day of such Interest Period (or promptly thereafter); provided that if such Type B Loan Participant is not able to obtain deposits in the London interbank (or other relevant) market matching such Interest Period, notice of its cost of funds rate shall be provided as follows: (i) prior to the first day of such Interest Period (or promptly thereafter), such Type B Loan Participant shall provide to the Agent an approximation of the cost to such Type B Loan Participant of such funding for such Interest Period; and (ii) prior to the last day of such Interest Period (or earlier, to the extent practicable if deposits of a duration longer than

14

[Facility Agreement [Atlas/747-8F 2011]]

one day are obtained), such Type B Loan Participant shall provide to the Agent the actual cost to such Type B Loan Participant of such funding for such Interest Period.

          (v) Notwithstanding Section 2.06 of the Mortgage (or any other provision in the Operative Documents requiring that interest be paid on a pro rata basis), in respect of each Interest Period of the related Series with respect to which a Market Disruption Event shall be applicable, the Security Trustee shall pay to each affected Holder of such Series from the funds provided by the Borrower pursuant to the preceding clause (ii) interest on the portion of the Loan that relates to the Type B Loan Certificate of such Series held by such Holder at the Market Disruption Floating Interest Rate applicable to such Holder or the Market Disruption Fixed Interest Rate applicable to such Holder, as the case may be, provided in clause (i) above for such Holder.

          (vi) All amounts payable under this Section 3(k) shall be calculated on the basis of a year of 360 days and actual number of days elapsed.

          (1) Alternative Basis. If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest payable in respect of Type B Loan Certificates, provided that any alternative basis agreed shall, with the prior consent of each affected Type B Loan Participant and the Borrower, be binding on all parties. For the avoidance of doubt, during any such period of negotiation, the Borrower shall be required to perform its obligations under the preceding paragraph (k).

          (m) Manner of Payment. All amounts payable by the Borrower under this Agreement shall be payable without setoff or counterclaim in immediately available funds to the Person entitled thereto, and to such Person’s account specified on Schedule I or as otherwise directed.

SECTION 4 Conditions.

          (a) Conditions Precedent to the Effectiveness of the Commitments. It is agreed that the respective Commitments of each Loan Participant in respect of each Designated Aircraft and the effectiveness of this Agreement is subject to the satisfaction of the following conditions precedent:

          (i) The following documents shall have been duly authorized, executed and delivered by the respective party or parties thereto, shall each be satisfactory in form and substance to such Loan Participant and shall be in full force and effect and executed counterparts shall have been delivered to such Loan Participant and its counsel:

(1) this Agreement;

(2) the Guarantee; and

(3) the Fee Letter.

15

[Facility Agreement [Atlas/747-8F 2011]]

          (ii) Such Loan Participant shall have received the following, in each case in form and substance satisfactory to it:

          (1) a certified copy of the Articles of Incorporation and Bylaws of the Borrower and a copy of resolutions of the board of directors of the Borrower or the executive committee thereof, certified by the Secretary or an Assistant Secretary of the Borrower, duly authorizing the execution, delivery and performance by the Borrower of this Agreement, the Mortgage and each other document required to be executed and delivered by the Borrower on the Delivery Date in accordance with the provisions hereof and thereof;

          (2) a certificate of the Borrower as to the person or persons authorized to execute and deliver this Agreement, the other Operative Documents, and any other documents to be executed on behalf of the Borrower in connection with the transactions contemplated hereby and as to the signature of such person or persons;

          (3) a certified copy of the Articles of Incorporation and Bylaws of the Guarantor and a copy of resolutions of the board of directors of the Guarantor or the executive committee thereof, certified by the Secretary or an Assistant Secretary of the Guarantor, duly authorizing the execution, delivery and performance by the Guarantor of the Guarantee;

          (4) a certificate of the Guarantor as to the person or persons authorized to execute and deliver the Guarantee in connection with the transactions contemplated hereby and as to the signature of such person or persons;

          (5) an incumbency certificate of the Security Trustee as to the person or persons authorized to execute and deliver this Agreement, the Mortgage, and any other documents to be executed on behalf of the Security Trustee in connection with the transactions contemplated hereby and the signatures of such person or persons;

          (6) a copy of the resolutions of the board of directors of the Security Trustee, certified by the Secretary or an Assistant Secretary of the Security Trustee, duly authorizing the transactions contemplated hereby and the execution and delivery of each of the documents required to be executed and delivered on behalf of the Security Trustee in connection with the transactions contemplated hereby;

          (7) copies of the following as it relates to the Borrower: (i) its air carrier certificate (as defined in 49 U.S.C. Sec. 41101 and issued pursuant to Part 119 of the Federal Aviation Regulations) and (ii) its operations specifications certificate issued under Part 121 of the Federal Aviation Regulations; and

          (8) a copy of the articles of association of the Security Trustee, each certified by the Secretary or an Assistant Secretary of the Security Trustee.

16

[Facility Agreement [Atlas/747-8F 2011]]

          (iii) Such Loan Participant shall have received such further “KYC” requirements from the Borrower and/or the Guarantor as it shall require to comply with its internal procedures.

          (iv) The Borrower and/or the Guarantor shall have paid, or made arrangements with such Loan Participant to pay, all fees, costs and expenses of such Loan Participant, the Agent and the Security Trustee that are then due and payable in accordance with Section 12 and the Fee Letter.

          (v) On the date hereof, no event shall have occurred and be continuing which constitutes (or would, with the passage of time or the giving of notice or both, constitute) an Event of Default.

          (vi) As of the date hereof, no Material Adverse Change has occurred since December 31, 2009 and is continuing.

          (b) Conditions Precedent to the Loan Participants’ Participation in a Designated Aircraft. It is agreed that the respective obligations of each Loan Participant to lend its Commitment to the Borrower in respect of each Designated Aircraft and Series is subject to the effectiveness of this Agreement under Section 4(a) and the satisfaction prior to or on the Delivery Date for such Designated Aircraft of the following conditions precedent:

          (i) Such Loan Participant shall have received due notice with respect to the Delivery Date for such Designated Aircraft pursuant to Section 2 hereof in the form of the Notice of Borrowing referred to therein (or shall have waived such notice either in writing or as provided in Section 2).

          (ii) No change shall have occurred after the date of the execution and delivery of this Agreement in applicable law or regulations thereunder or interpretations thereof by appropriate regulatory authorities which, in the reasonable opinion of such Loan Participant would make it a violation of law or regulations for such Loan Participant to make its Commitment for such Designated Aircraft available to acquire its Loan Certificate(s) or to realize the benefits of the security afforded by the Mortgage.

          (iii) On the Delivery Date of such Designated Aircraft, (A) (x) unless the Type A Loan Participants have previously established the Liquidity Margin pursuant to Section 3(c)(ii), the Type A Loan Participants are able to access U.S. dollars in the LIBOR or other applicable financial markets so as to fund (and to finance) their respective Loan to be made on such date to the Maturity Date and (y) the Type B Loan Participants are able to access U.S. dollars in the LIBOR or other applicable financial markets so as to fund (and to finance) their respective Loan to be made on such date to the succeeding Interest Payment Date and (B) no Material Adverse Change has occurred since December 31, 2009 and is continuing.

          (iv) (x) each Underwriter shall have received its installment of the structuring fee specified in Section 3(d), (y) the Agent shall have received its agency fee specified in Section 3(e) for the first year and (z) the Borrower and/or the Guarantor shall have paid, or made arrangements with such Loan Participant to pay, all other fees, costs

17

[Facility Agreement [Atlas/747-8F 2011]]

and expenses of such Loan Participant, the Agent and the Security Trustee that are then due and payable in accordance with Section 12.

          (v) As of the Delivery Date of such Designated Aircraft, there shall not have occurred and be continuing, since the date hereof, an event or series of events (excluding ordinary business cycles and changes of a general nature in the global economy) which shall have a material adverse effect on the international commercial air cargo business and which would reasonably be expected to materially adversely affect the Borrower’s ability to perform its obligations under the Operative Documents; provided, that the condition precedent set forth in this clause (v) shall be deemed satisfied on the Delivery Date of each Designated Aircraft, unless all of the Loan Participants shall have unanimously determined that such an event or series of events has occurred and is continuing as of such Delivery Date.

          (vi) The following documents shall have been duly authorized, executed and delivered by the respective party or parties thereto, shall each be satisfactory in form and substance to such Loan Participant and shall be in full force and effect and executed counterparts shall have been delivered to such Loan Participant and its counsel, provided that only such Loan Participant shall receive an executed original of its Loan Certificate(s) to be issued to it:

          (1) the Mortgage and/or Mortgage Supplement covering such Designated Aircraft and dated the Delivery Date for such Designated Aircraft;

          (2) the Loan Certificates for such Series, with Annex A for each Loan Certificate (and the related Schedule 1 of the Mortgage Supplement for such Designated Aircraft) duly completed (which Annex A and related Schedule 1 to be prepared by the Agent) as provided in Section 3(a) hereof;

          (3) the Consent and Agreement in respect of such Designated Aircraft;

          (4) the Warranty Bill of Sale and FAA Bill of Sale for such Designated Aircraft;

          (5) the DERA for such Designated Aircraft; and

          (6) a copy of that portion of the Aircraft Purchase Agreement certified by a Responsible Officer of the Borrower as being a true and accurate copy of the same that relates to the Assigned Warranties and the related obligations of the Borrower or a successor in interest to the Borrower which has the right to exercise any such warranty.

          (vii) A Uniform Commercial Code financing statement or statements covering all the security interests created by or pursuant to the granting clause of the Mortgage that are not covered by the recording system established by the Federal Aviation Act shall have been authorized by the Borrower, and such financing statement or statements shall have been duly filed in all places deemed necessary or advisable in the

18

[Facility Agreement [Atlas/747-8F 2011]]

opinion of counsel for the Loan Participants, and any additional Uniform Commercial Code financing statements deemed advisable by such Loan Participant shall have been authorized by the Borrower and duly filed and all other action shall have been taken as is deemed necessary or advisable, in the opinion of counsel for the Loan Participants, to establish and perfect the Security Trustee’s security interest in such Designated Aircraft.

          (viii) All appropriate action required to have been taken by the Federal Aviation Administration, or any governmental or political agency, subdivision or instrumentality of the United States, on or prior to the Delivery Date for such Designated Aircraft in connection with the transaction contemplated by this Agreement shall have been taken, and all orders, permits, waivers, authorizations, exemptions and approvals of such entities required to be in effect on such Delivery Date in connection with the transaction contemplated by this Agreement shall have been issued, and all such orders, permits, waivers, authorizations, exemptions and approvals shall be in full force and effect on such Delivery Date.

          (ix) On the Delivery Date for such Designated Aircraft, the following statements shall be true, and such Loan Participant shall have received evidence satisfactory to it (including a printout of the “priority search certificates” (as defined in the Regulations for the International Registry) from the International Registry relating to such Designated Aircraft (and the constituent Airframe and Engines)) to the effect that:

          (1) the Borrower has good title to such Designated Aircraft, free and clear of Liens other than (subject to filing and recording of the FAA Bill of Sale with the FAA if the Borrower does not already own such Designated Aircraft) the mortgage and security and international interests created by the Mortgage and the Mortgage Supplement for such Designated Aircraft and, if applicable, a Subordinated Lien;

          (2) the FAA Bill of Sale, the Mortgage and the Mortgage Supplement for such Designated Aircraft have been duly filed with the FAA for recordation (or are in form suitable for recordation and are in the process of being so filed for recordation) and there exist no Liens of record on such Designated Aircraft prior to the Lien of the Mortgage;

          (3) the international interest of the Mortgage Supplement with respect to the Airframe and Engines associated with such Designated Aircraft shall have been registered with the International Registry (or arrangements satisfactory to the Security Trustee for such registration immediately upon delivery shall have been made), and there exists no registered international interest on the International Registry prior to such international interest;

          (4) such Designated Aircraft has been duly certified as to type and airworthiness by the FAA, and the Borrower has authority to operate such Designated Aircraft (and such Loan Participant shall have received copies of the type certification and the airworthiness certificate for such Designated Aircraft); and

19

[Facility Agreement [Atlas/747-8F 2011]]

          (5) the Security Trustee is entitled to the protection of Section 1110 of the United States Bankruptcy Code in connection with its right to take possession of such Designated Aircraft in the event of a case under Chapter 11 of the United States Bankruptcy Code in which the Borrower is a debtor.

          (x) On the Delivery Date of such Designated Aircraft, (A) the representations and warranties of the Borrower contained in Section 7 of this Agreement shall be true and accurate as though made on and as of such date except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties shall be true and accurate on and as of such earlier date), and (B) no event shall have occurred and be continuing which constitutes (or would, with the passage of time or the giving of notice or both, constitute) an Event of Default.

          (xi) Such Loan Participant shall have received an opinions addressed to such Loan Participant and the Security Trustee from (i) Pillsbury Winthrop Shaw Pittman, LLP, special New York counsel to the Borrower and Guarantor and (ii) in-house counsel to the Borrower, each dated the Delivery Date of such Designated Aircraft, in form and substance reasonably satisfactory to the addressees thereof.

          (xii) Such Loan Participant shall have received an opinion addressed to such Loan Participant, the Security Trustee and the Borrower from special counsel in the jurisdiction in which such Designated Aircraft is to be registered as to matters relating to such registration and perfection of the mortgage lien on such Designated Aircraft contemplated hereby, in form and substance reasonably satisfactory to the addressees thereof.

          (xiii) Such Loan Participant shall have received from Vedder Price P.C., special New York counsel for the Loan Participants, an opinion satisfactory in substance and form to such Loan Participant, dated the Delivery Date of such Designated Aircraft, as to such matters incident to the transactions contemplated hereby as such Loan Participant may reasonably request.

          (xiv) Such Loan Participant shall have received a certificate signed by a Responsible Officer of the Borrower, dated the Delivery Date of such Designated Aircraft, addressed to the Loan Participant and certifying as to the matters stated in paragraphs (x), (xvi) and (xvii) of this Section 4(b).

          (xv) Such Loan Participant shall have received (A) an independent insurance brokers’ report and certificate(s) of insurance, in form and substance reasonably satisfactory to such Loan Participant, dated the Delivery Date of such Designated Aircraft, as to the due compliance with the terms of Schedule 1 to the Mortgage relating to insurance with respect to such Designated Aircraft, (B) confirmation from such broker that the type, scope and amount of the insurances evidenced by such insurance certificates and maintained by the Borrower in respect of such Designated Aircraft is consistent with market practice for major international cargo airlines flying comparable equipment as the Borrower and (C) a certificate, in form and substance

20

[Facility Agreement [Atlas/747-8F 2011]]

reasonably acceptable to such. Loan Participant, signed by a responsible Officer of the Borrower confirming indemnification or insurance provided by the United States and evidence of such indemnification or insurance, if any.

          (xvi) On the Delivery Date of such Designated Aircraft, it shall be true that no Event of Loss (or event which with the passage of time would become an Event of Loss) with respect to such Designated Aircraft (or constituent Airframe) or any Engine has occurred.

          (xvii) No action or proceeding shall have been instituted nor shall governmental action be threatened before any court or governmental agency, nor shall any order, judgment or decree have been issued or proposed to be issued by any court or governmental agency at the time of the Delivery Date of such Designated Aircraft to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement or the transaction contemplated hereby.

          (xviii) On the Delivery Date of Such Designated Aircraft, the Aircraft Manufacturer shall have received the entire purchase price of such Designated Aircraft due to it, such purchase price to have been funded by (i) the Loan made in respect thereof and (ii) equity provided by the Borrower or debt supported by a Subordinated Lien.

Promptly upon the recording of the Mortgage and the Mortgage Supplement at the FAA covering each Designated Aircraft pursuant to the Federal Aviation Act, the Borrower will cause Crowe & Dunlevy, P.C., special counsel in Oklahoma City, Oklahoma, to deliver to each Loan Participant and the Borrower an opinion as to the due and valid registration of such Designated Aircraft in the name of the Borrower, the due recording of the related FAA Bill of Sale, Mortgage and Mortgage Supplement and the lack of filing of any intervening documents with respect to such Designated Aircraft.

SECTION 5 Closing Procedure.

          (a) Following the Borrower’s notice of the Delivery Date for any Designated Aircraft as provided in Section 2 hereof, the Borrower will obtain an authorization code from the FAA for the international interest of the Security Trustee with respect to the Airframe and each Engine associated with such Designated Aircraft by filing with the FAA an FAA Entry Point Filing Form — AC Form 8050-135 and the parties will pre-position the related Mortgage and/or Mortgage Supplement with FAA counsel in Oklahoma City, Oklahoma, together with the FAA Bill of Sale for such Designated Aircraft and the application for registration of such Designated Aircraft in the name of the Borrower. On the Delivery Date of any Designated Aircraft and in sufficient time to permit the closing to occur during business hours of the FAA in Oklahoma City, Oklahoma, each Loan Participant will wire transfer its Commitment prior to 9:00 a.m. New York time for such Designated Aircraft to the Security Trustee. On the Delivery Date of any Designated Aircraft, by conference telephone call among the Aircraft Manufacturer, the Borrower, the Loan Participants (and/or their counsel acting on their behalf), the Security Trustee and FAA counsel, the Aircraft Manufacturer will authorize the filing of the FAA Bill of Sale for such Designated Aircraft to be delivered on such Delivery Date and the Borrower will (a) cause the ownership interest of the Airframe and each Engine associated with such

21

[Facility Agreement [Atlas/747-8F 2011]]

Designated Aircraft to be duly registered with the International Registry as a contract of sale, (b) authorize the filing of the Mortgage and/or the Mortgage Supplement for such Designated Aircraft upon receipt by the Aircraft Manufacturer of the purchase price for such Designated Aircraft and receipt by the Borrower (or its order) of the Loan for such Designated Aircraft and (c) cause an international interest in the Airframe and each Engine associated with such Designated Aircraft listing the Security Trustee as creditor to be registered with the International Registry with respect to the Mortgage and the Mortgage Supplement for such Designated Aircraft. The irrevocable authorization to FAA counsel to date the FAA Bill of Sale for any Designated Aircraft and file the FAA Bill of Sale and the Mortgage and/or Mortgage Supplement for such Designated Aircraft will occur prior to the transfer of the Loan for such Designated Aircraft to or for account of the Borrower, but the filing will not occur until the earlier of the Aircraft Manufacturer’s receipt of the purchase price for such Designated Aircraft and of the Borrower’s (or its order) receipt of the funds at the designated account. The Loan Certificate(s) for each Designated Aircraft will be delivered to the applicable Loan Participants and legal opinions delivered to all parties immediately following the transfer of the related Loan as provided in Section 2(c).

          (b) The Borrower irrevocably authorizes FAA counsel to file with the FAA the Mortgage and/or Mortgage Supplement for each Designated Aircraft and register the appropriate International Interests with the International Registry for such Designated Aircraft following the closing of the financing for such Designated Aircraft. FAA counsel may rely, without any further investigation, on any statement or certification by the Security Trustee that the closing of the financing for any Designated Aircraft has occurred.

     SECTION 6 Extent of Interest of Holders.

     No Holder shall have any further interest in, or other right with respect to, the mortgage and security interests created by the Mortgage in respect of any Designated Aircraft when and if the Original Amount of and interest on all related Loan Certificate(s) held by such Holder and all other sums payable to such Holder hereunder, under the Mortgage and under such Loan Certificate(s) in respect of such Designated Aircraft shall have been paid in full, provided, however, to the extent, for any reason, any such sums paid to a Holder is rescinded or must otherwise be restored by such Holder, the obligations of the Borrower and the security interests created by such Mortgage shall be automatically reinstated with respect to such Holder and the Security Trustee, as applicable.

SECTION 7 Representation and Warranties.

          (a) Borrower’s Representations and Warranties. The Borrower makes the following representations and warranties set out in this Section 7 to each Loan Participant on the date hereof and on the Delivery Date of each Designated Aircraft (except to the extent such representation or warranties relates to an earlier date, in which case such representation or warranty shall only be made as to the date on which it is expressed to be made):

          (i) the Borrower is a corporation duly organized and validly existing in good standing pursuant to the laws of the State of Delaware; is duly qualified to do business as a foreign corporation in each jurisdiction in which its operations or the nature

22

[Facility Agreement [Atlas/747-8F 2011]]

of its business requires, except where the failure to be so qualified would not have a Material Adverse Change on the Borrower or its business; is a U.S. Air Carrier; and has the corporate power and authority to engage in air transport and to carry on cargo service as presently conducted, to own such Designated Aircraft and to enter into and perform its obligations under the Operative Documents;

          (ii) it has duly authorized, executed and delivered this Agreement and each of the Operative Documents to which it is (or will be) a party, and each of the Operative Documents to which it is (or will be) a party constitutes, or when entered into will constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity;

          (iii) neither the execution and delivery by the Borrower of the Operative Documents to which it is or will be a party, nor the consummation by the Borrower of any of the transactions contemplated hereby or thereby, nor the compliance by the Borrower with any of the terms and provisions hereof and thereof, (A) requires or will require any approval of its stockholders, or approval or consent of any trustees or holders of any indebtedness or obligations of the Borrower except such as have been (or will be) duly obtained, (B) violates or will violate its certificate of incorporation or by-laws, (C) contravenes or will contravene any provision of, or constitutes or will constitute a default under, or results or will result in any breach of, any indenture, mortgage, lease, chattel mortgage, deed of trust, conditional sale contract, bank loan or credit agreement, license or other agreement, instrument or contractual restriction to which it is a party or by which it is bound or (D) contravenes or will contravene any applicable law binding on it;

          (iv) no authorization of, giving of notice to, or registration with, or taking of any other action in respect of, any governmental authority or agency or any other applicable governmental authority or agency is required for the execution and delivery of, or the carrying out by, the Borrower of any of the transactions contemplated hereby or any other of the Operative Documents to which the Borrower is or will be a party, except for (A) the orders, permits, waivers, exemptions, authorizations and approvals of the regulatory authorities having jurisdiction over the operation of such Designated Aircraft by the Borrower, which orders, permits, waivers, exemptions, authorizations and approvals have been duly obtained or will on or prior to the Delivery Date of such Designated Aircraft be duly obtained, and will on such Delivery Date be in full force and effect, (B) any normal periodic and other reporting requirements under the Federal Aviation Act and the regulations promulgated thereunder and the applicable rules, and regulations of the FAA, in each case to the extent required to be given or obtained only after the Delivery Date of such Designated Aircraft and (C) any filings, registrations or applications specifically described in this Agreement;

          (v) there are no pending or, to the Borrower’s knowledge, threatened actions or proceedings against the Borrower before any court or administrative agency

23

[Facility Agreement [Atlas/747-8F 2011]]

that would reasonably be expected to materially adversely affect Borrower’s ability to perform its obligations under the Operative Documents;

          (vi) except for (A) the filing with the FAA of an FAA Entry Point Filing Form — AC Form 8050-135 and the procurement of unique authorization codes for the registration of the ownership interest of the Borrower in the Airframe and each Engine associated with such Designated Aircraft represented by the contract of sale constituting the FAA Bill of Sale and/or the Warranty Bill of Sale and the registration of the Borrower’s ownership interest with respect to each contract of sale in respect of the Airframe and each Engine associated with such Designated Aircraft, the filing with the FAA of an FAA Entry Point Filing Form — AC Form 8050-135 as to the international interest of the Security Trustee with respect to the Airframe and each Engine associated with such Designated Aircraft and the procurement of unique authorization codes for each thereof and the registration of the Security Trustee’s international interest in the Airframe and each Engine associated with such Designated Aircraft with the International Registry, (B) the filing for recording pursuant to the Federal Aviation Act of the FAA Bill of Sale for such Designated Aircraft (and the application for registration of such Designated Aircraft in the name of the Borrower) and the Mortgage with the Mortgage Supplement for such Designated Aircraft, (C) the filing of financing statements (and continuation statements at periodic intervals) with respect to the interests created by such documents under the Uniform Commercial Code of Delaware and such other states as may be specified in the opinion furnished pursuant to Section 4(b)(xi)(i) hereof and (D) the affixation of the nameplates referred to in Section 3.04 of the Mortgage for such Designated Aircraft, no further action, including any filing or recording of any document (including any financing statement in respect thereof under Article 9 of the Uniform Commercial Code of any applicable jurisdiction), is necessary or advisable in order to establish and perfect the first mortgage Lien on such Designated Aircraft in favor of the Security Trustee pursuant to the Mortgage for such Designated Aircraft or to establish as against third parties the international interest under such Mortgage in any applicable jurisdiction in the United States;

          (vii) there has not occurred any event which constitutes a Default or an Event of Default under the Mortgage for such Designated Aircraft which is presently continuing;

     (viii) (x) The Original Financial Statements were prepared in accordance with GAAP consistently applied (except as may be indicated in the notes thereto or as permitted by Form 10-Q in the case of interim unaudited consolidated financial statements);

          (y) The Original Financial Statements fairly represent in all material respects the consolidated financial condition and operations of the Guarantor as at the respective dates thereof and the consolidated results of its operations and cash flows for the periods indicated therein; and

24

[Facility Agreement [Atlas/747-8F 2011]]

          (z) There has been no Material Adverse Change since December 31, 2009 except as disclosed by it to the Agent in writing prior to the date hereof;

          (ix) on the Delivery Date of such Designated Aircraft, the Borrower will have good title to such Designated Aircraft delivered on such Delivery Date free and clear of all Liens, except the Lien of the Mortgage for such Designated Aircraft and Inchoate Liens;

          (x) neither the Borrower nor anyone acting on behalf of the Borrower has directly or indirectly offered any interest in the Loan Certificates for such Designated Aircraft for sale to, or solicited any offer to acquire any of the same from, anyone other than the related Loan Participants and not more than 35 other institutions believed capable of evaluating and bearing the risks of investment in the transactions contemplated hereby;

          (xi) on the Delivery Date for such Designated Aircraft, such Designated Aircraft will have been insured by the Borrower in accordance with the terms of the related Mortgage, will have suffered no Event of Loss and will be in the condition and state of repair required under the terms of the related Mortgage, and, within two Business Days of the Delivery Date for such Designated Aircraft, such Designated Aircraft will have been duly certified by the FAA as to type and airworthiness;

          (xii) the Borrower is not an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940;

          (xiii) none of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrower to the Security Trustee or any Loan Participant in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

          (xiv) no part of the proceeds of the Loan hereunder in respect of such Designated Aircraft will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board of Governors of the Federal Reserve, including Regulations U and X;

          (xv) (A) the Borrower: is a “transacting user entity” (as such term is defined in the Regulations of the International Registry); is “situated”, for the purposes of the Cape Town Convention, in the United States; and has the power to “dispose” (as such term is used in the Cape Town Convention) of the Airframe and related Engines financed on the Delivery Date of the related Designated Aircraft; (B) the Airframe and related Engines financed on the Delivery Date of the related Designated Aircraft are “aircraft objects” (as defined in the Cape Town Convention); (C) the United States is a Contracting State under the Cape Town Convention; (D) the FAA Bill of Sale for the

25

[Facility Agreement [Atlas/747-8F 2011]]

Airframe associated with such Designated Aircraft and/or the Warranty Bill of Sale for such Designated Aircraft constitutes a “contract of sale” (as defined in the Cape Town Convention), and the Mortgage and the Mortgage Supplement for such Designated Aircraft conveys an international interest in such Designated Aircraft; and (E) the payment of principal of and interest on the Loan Certificates in respect of such Designated Aircraft, and the performance by the Borrower of its other obligations under the Operative Documents, are “associated rights” (as defined in the Cape Town Convention); and

          (xvi) In respect of such Designated Aircraft, there are no registrations on the International Registry in relation to the Airframe and each Engine associated with such Designated Aircraft other than those referred to in clause (vi)(A) above.

          (b) Representations and Warranties of the Security Trustee and Loan Participants. Each Finance Party hereby represents and warrants to each of the other Parties, as of the date hereof, that:

          (i) it is a duly organized, validly existing and (if applicable) in good standing under the applicable laws of its jurisdiction of organization;

          (ii) it has the full requisite power and authority, including trust power (if applicable), to execute, deliver and enter into the Operative Documents to which it is or is contemplated to become a Party, to comply with the terms hereof and thereof, and to perform its obligations hereunder and thereunder;

          (iii) it has duly authorized, executed and delivered the Operative Documents to which it is or is contemplated to become a Party and, assuming due execution and delivery by each of the parties thereto, each such Operative Document constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, receivership, reorganization, arrangement, moratorium or other similar laws affecting creditors’ rights generally and to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law);

          (iv) without making any inquiries (legal, factual or otherwise), it does not have any knowledge of any circumstances that will give rise to a claim pursuant to Section 8(b) or 8(c) hereof; and

          (v) in the case of the Security Trustee, it is a transacting user entity.

          (c) Loan Certificates. Each Loan Participant severally represents and warrants that it is acquiring its interest in its Loan Certificates either (A) in the ordinary course of its general banking business or (B) for investment and not with a view to any distribution thereof that would require registration under the Securities Act, subject, however, to the disposition of its property being at all times within its control.

26

[Facility Agreement [Atlas/747-8F 2011]]

     SECTION 8 Indemnities; Etc.

          (a) General Indemnity.

          (i) Subject to the exclusions stated in (b) below and the other limitations in this Section 8, the Borrower hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from any and all Expenses imposed on, incurred by or asserted against any Indemnitee arising out of or directly resulting from (A) the operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale of any Designated Aircraft, associated Airframe or any associated Engine, or any engine used in connection with any associated Airframe or any part of any of the foregoing by the Borrower, any lessee or any other Person whatsoever, whether or not such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale is in compliance with the terms of the related Mortgage, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any person whatsoever and claims relating to any laws, rules or regulations pertaining to such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, sale or return including environmental control, noise and pollution laws, rules or regulations; (B) the manufacture, design, purchase, acceptance, rejection, delivery, or condition of any Designated Aircraft, associated Airframe or any associated Engine, any engine used in connection with any associated Airframe, or any part of any of the foregoing including, without limitation, latent and other defects, whether or not discoverable, or trademark or copyright infringement; (C) any breach of or failure to perform or observe, or any other noncompliance with, any covenant or agreement to be performed, or other obligation of the Borrower under any of the Operative Documents, or the falsity of any representation or warranty of the Borrower in any of the Operative Documents; (D) the offer, sale and delivery by the Borrower or anyone acting on behalf of the Borrower of any Loan Certificates or successor debt obligations issued in connection with the refunding or refinancing thereof (including, without limitation, any claim arising out of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any other Federal or state statute, law or regulation, or at common law or otherwise relating to securities (collectively “Securities Liabilities”)) (the indemnity provided in this clause (D) to extend also to any Person who controls an Indemnitee, its successors, assigns, employees, directors, officers, servants and agents within the meaning of Section 15 of the Securities Act of 1933, as amended); and (E) the transactions contemplated by the Operative Documents or any lease under the Mortgage for any Designated Aircraft, any Event of Default under the Mortgage for any Designated Aircraft or the enforcement against the Borrower of any of the terms thereof (including, without limitation, Article IX of such Mortgage).

27

[Facility Agreement [Atlas/747-8F 2011]]

          (ii) Claims Excluded. The foregoing indemnity shall not extend to any Expense of any Indemnitee to the extent attributable to one or more of the following:

          (1) acts or omissions involving the willful misconduct, fraud or gross negligence of such Indemnitee or any Person acting on behalf of such Indemnitee (other than gross negligence imputed to such Indemnitee solely by reason of its interest in the applicable Designated Aircraft);

          (2) the failure by such Indemnitee to perform or observe any agreement, covenant or condition in any of the Operative Documents applicable to it, including, without limitation, the creation or existence of a Finance Party Encumbrance (except to the extent such failure was caused directly by the failure of the Borrower to perform any of its obligations under the Operative Documents);

          (3) any representation or warranty by such Indemnitee in the Operative Documents or in connection therewith being incorrect in any material respect;

          (4) with respect to any Indemnitee, a disposition (voluntary or involuntary) by such Indemnitee of all or any part of such Indemnitee’s interest in any Loan Certificate, the Airframe associated with any Designated Aircraft, any Engine associated with any Designated Aircraft or in any Operative Document other than during the continuance of an Event of Default;

          (5) any Tax, or increase in tax liability under any tax law whether or not the Borrower is required to indemnify for such Tax pursuant to Schedule III hereto (such matter being the subject to the indemnity in Schedule III hereto);

          (6) a failure on the part of the Security Trustee to distribute in accordance with the Mortgage for any Designated Aircraft any amounts received and distributable by it thereunder;

          (7) any Claim to the extent such Claim would have arisen if such Indemnitee had not engaged in the transactions contemplated by the Operative Documents;

          (8) any Claim that constitutes a Finance Party Encumbrance attributable to such Indemnitee;

          (9) any Claim to the extent attributable to violations of applicable securities laws attributable to any Loan Participant’s own actions in connection with any offer, sale, assignment or other disposition of its Loans under this Agreement by such Loan Participant;

          (10) the authorization or giving or withholding of any future amendments, supplements, waivers, or consents with respect to any of the

28

[Facility Agreement [Atlas/747-8F 2011]]

Operative Documents other than such as have been consented to, approved, authorized or requested by the Borrower;

          (11) any Expense which is specified to be for account of an Indemnitee pursuant to the Operative Documents without express right of reimbursement under any Operative Document;

          (12) any Claim to the extent it is an ordinary and usual internal operating expense of such Indemnitee other than such expenses caused by an Event of Default; or

          (13) any acts or events (other than acts or events related to the performance or failure to perform by Borrower of its obligations pursuant to the terms of the Operative Documents) that occur after the Security Trustee is required to release all Mortgage Collateral from the Lien of the Mortgage for any Designated Aircraft, except to the extent attributable to acts or events occurring prior thereto.

          The foregoing indemnity shall not extend to any Expense to the extent that such Expense is not caused by, or does not arise out of, an act, omission or event which occurs prior to the termination of the Lien of the Mortgage for any Designated Aircraft and the payment of all other payments required to be paid by the Borrower under the Operative Documents or that is expressly required by the terms of the Operative Documents to be paid by such Indemnitee.

          The Borrower further agrees that any payment or indemnity pursuant to this Section 8(b) in respect of any “Expense” shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or Indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or under the laws of any taxing authority or governmental subdivision of a foreign country, or any territory or possession of the United States or any international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or payment of such Expense.

          (iii) Claims Procedure. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to the Borrower; provided that the failure to provide such notice shall not release the Borrower from any of its obligations to indemnify hereunder except to the extent that the Borrower is prejudiced as a result of the failure to give such notice in a timely fashion, and no payment by the Borrower to an Indemnitee pursuant to this Section 8(a) shall be deemed to constitute a waiver or release of any right or remedy which the Borrower may have against such Indemnitee for any actual damages as a result of the failure by such Indemnitee to give the Borrower such notice. The Borrower shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, so long as the Borrower has acknowledged in writing its responsibility for such Expense hereunder (unless such Expense is covered by the second paragraph of this Section 8(a)(ii), except that such acknowledgment does not apply if the decision of a

29

[Facility Agreement [Atlas/747-8F 2011]]

court or arbitrator provides that the Borrower is not liable hereunder), (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its reasonable efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at the Borrower’s sole expense, to participate therein. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by the Borrower pursuant to the preceding provisions. Notwithstanding any of the foregoing, the Borrower shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if any Event of Default shall have occurred and be continuing, if such proceedings will involve a material risk of the sale, forfeiture or loss of any Designated Aircraft unless the Borrower shall have posted a bond or other security reasonably satisfactory to the relevant Indemnitee with respect to such risk or if such proceedings could entail any risk of criminal liability being imposed on such Indemnitee.

          The Indemnitee shall supply the Borrower with such information reasonably requested by the Borrower as is necessary or advisable for the Borrower to control or participate in any proceeding to the extent permitted by this Section 8(a)(iii). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of the Borrower, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 8(a).

          The Borrower shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 8(a).

          In the case of any Expense indemnified by the Borrower hereunder which is covered by a policy of insurance maintained by the Borrower (or any Lessee) pursuant to Article VI of the Mortgage for any Designated Aircraft or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by the Borrower (or any Lessee) pursuant to Article VI of the Mortgage for any Designated Aircraft or otherwise, the rights of an Indemnitee to control or participate in any proceedings shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder.

          To the extent of any payment of any Expense pursuant to this Section 8(a), the Borrower, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to

30

[Facility Agreement [Atlas/747-8F 2011]]

cooperate with the Borrower to permit the Borrower to pursue such claims, if any, to the extent reasonably requested by the Borrower.

          In the event that the Borrower shall have paid an amount to an Indemnitee pursuant to this Section 8(a), and such Indemnitee subsequently shall be reimbursed in respect of such indemnified amount from any other Person, such Indemnitee shall promptly pay the Borrower the amount of such reimbursement, including interest received attributable thereto, provided that no Special Default or Event of Default has occurred and is continuing.

          (b) Tax Indemnities. The general tax and withholding tax indemnities are specified in Schedule III hereto, which provisions are incorporated herein by reference.

          (c) Increased Costs.

     (i) If, by reason of any Change in Law occurring after the date hereof:

               (x) a Loan Participant or any Holding Company of such Loan Participant has a reduction on its rate of return on its capital as relates to the class of assets and liabilities that includes its commitments and Loans (taking into account any Swap Transaction) made under this Agreement below that which such Loan Participant or Holding Company would have achieved but for such Change in Law (taking into account the capital adequacy policies developed by such Loan Participant in connection with the adoption and/or implementation of the Basel II and Basel III accords);

               (y) a Loan Participant or any Holding Company of such Loan Participant incurs a cost as a result of such Loan Participant entering into or assuming or maintaining a commitment or performing its obligations (including its obligation to participate in the making of the Loan or enter into any Swap Transaction) under this Agreement; or

               (z) there is any increase in the cost to a Loan Participant or any Holding Company of such Loan Participant of funding or maintaining all or any of the Loans (including any Swap Transaction) comprised in a class of loans formed by or including such Loan Participant’s share of the Loans made or to be made by such Loan Participant, including any reserve, special deposit or similar requirement assessed against assets of, deposits with or for account of, or credit extended by, such Loan Participant;

then, subject to the provisions of this Section 8(c), the Borrower shall, from time to time on demand of the Agent (on behalf of any Loan Participant), promptly pay to the Security Trustee for the account of that Loan Participant, amounts sufficient to hold harmless and indemnify such Loan Participant on an After-Tax Basis, from and against, as the case may be, (x) the reasonably allocable portion of any such reduction in the rate of return on capital, (y) any such actual cost, (z) any such increased cost (or such proportion of such increased cost as is reasonably attributable to its participating in the funding or maintaining of the Loans or any Swap Transaction) (together, “Increased Costs”); provided, that:

31

[Facility Agreement [Atlas/747-8F 2011]]

          (1) the Borrower shall have no liability under this Section 8(c) in respect of any Taxes;

          (2) the Borrower shall have no liability under this Section 8(c) if (i) the Borrower elects to direct the transfer or to repay the affected Loans and cancels the affected commitments pursuant to Section 3(j) hereof (provided that the Borrower shall nevertheless be liable under this Section 8(c) for increased costs relating to the period prior to such prepayment and cancellation), (ii) such Loan Participant is not also seeking indemnification against similar increased costs, to the extent it is entitled to do so, in transactions with substantial borrowers (it being agreed that an officer’s certificate to the contrary from any such Loan Participant shall constitute sufficient evidence of such fact) or (iii) the claim for Increased Costs arises out of a voluntary relocation by such Loan Participant of its Facility Office;

          (3) such Loan Participant shall only be entitled to receive compensation for such Increased Costs from and after the time that is 120 days prior to the date the Increased Cost Notice referred below is received by Borrower; and

          (4) such Loan Participant will (at Borrower’s expense) use commercially reasonable efforts to mitigate the amount of the Increased Costs associated with such event, including designating a different Facility Office to hold the Loans if such designation will avoid or reduce such Increased Costs and will not, in the sole opinion of such Loan Participant, result in any economic, legal or regulatory disadvantage to such Loan Participant (other than economic disadvantages for which the Borrower has provided an indemnity acceptable to such Loan Participant).

          (ii) A Loan Participant intending to make a claim for increased Costs pursuant to Section 8(c)(i) shall, within 30 days after becoming aware of the same, provide written notice to the Agent and the Borrower in writing of the event by reason of which it is entitled to do so (the “Increased Cost Notice”); provided, that:

          (x) the Increased Cost Notice shall described the events giving rise to such Increased Costs, the basis for determining and allocating such Increased Costs and the amount of each request by such Loan Participant for compensation under this Section 8(c), together with a statement that the determinations and allocations made in respect of the Increased Costs comply with the provisions of this Section 8(c); and

          (y) such Loan Participant shall not be required to disclose any confidential information relating to the organization of its affairs, or its capital structure or return on capital.

          (iii) Certificate of Loan Participants. A certificate of a Loan Participant as to (i) any amount payable to it under this Agreement or (ii) the amount of any

32

[Facility Agreement [Atlas/747-8F 2011]]

indemnity payable to it, or for its account, under this Section 8(c) shall, in either case and in the absence of manifest error, be prima facie evidence of the existence and amount of such obligation of the Borrower so long the underlying determinations and allocations are made on a reasonable basis.

          (iv) No Greater Obligation. Notwithstanding any other provision of this Agreement, if a Loan Participant changes its Facility Office or Agent changes the office through which it is acting or Agent or a Loan Participant assigns or transfers the whole or any part of the Loan or its rights, benefits or obligations under this Agreement and such change, assignment or transfer would at the date of such change, assignment or transfer subject the Borrower to any greater obligation or liability under this Agreement or any other Operative Documents than it would have been under on such date if no such change, assignment or transfer had then taken place, then unless such change, assignment or transfer was made at the request of the Borrower in order to mitigate or avoid the requirement for payment of additional amounts or increased costs or after the occurrence and continuation of an Event of Default, the Borrower shall not be obliged to pay any amounts in excess of the amount that it would have been obliged to pay had no change, assignment or transfer then taken place.

          (d) Illegality.

          (i) Notwithstanding any other provision in this Agreement, if any Change in Law or Illegality Event shall make it unlawful for any Loan Participant to maintain its Commitment or its portion of the Loans in respect of any Designated Aircraft, then the affected Loan Participant shall deliver to Borrower and Agent a written certification describing in reasonable detail the events giving rise to such unlawfulness. Upon receipt by Borrower of such notice, the Borrower and such Loan Participant shall negotiate for a period of 60 days in an effort to mitigate such illegality. During such mitigation period the affected Loan Participant shall not be required to make any Advances to the Borrower hereunder. If after such mitigation period, such unlawfulness cannot be resolved, then the provisions of clause (ii) below shall apply.

          (ii) If there shall have occurred and be continuing an event with respect to a Loan Participant of the type described in clause (i) above (an “Impaired Loan Participant”), then the Agent may and, if so instructed by the Borrower shall:

          (x) notify the Borrower and each other Loan Participant that such unlawfulness has occurred and give notice that (a) if no Advance shall then have been made by such Impaired Loan Participant, no Advance shall be made to the Borrower by such Impaired Loan Participant or (b) if an Advance shall then have been made by such Impaired Loan Participant, no further Advances shall be made to the Borrower by such Impaired Loan Participant, and request each other Loan Participant to take up the relevant portion of such Impaired Loan Participant’s commitments, if any, in which case each such other Loan Participant may (but shall not be obligated to) in its sole discretion assume its pro rata share of such Impaired Loan Participant’s commitments by providing written notice of such assumption to the Agent within five Business Days, and if such other Loan

33

[Facility Agreement [Atlas/747-8F 2011]]

Participant does not so elect in writing to assume its pro rata share of the Impaired Loan Participant’s commitments, the Agent shall send a further notice to each remaining Loan Participant, which in turn may (but shall not be obligated to) in its sole discretion assume the remaining available commitments of such Impaired Loan Participant on a pro rata basis by providing written notice of such assumption to the Agent within five Business Days; and

          (y) notify the Borrower and each other Loan Participant that such unlawfulness has occurred and, to the extent that applicable laws do not require the immediate repayment of all or a portion of such Impaired Loan Participant’s Loans, request each other Loan Participant to assume the relevant portion of such Impaired Loan Participant’s Loans, in which case each such other Loan Participant may (but shall not be obligated to) in its sole discretion assume its pro rata share of such Impaired Loan Participant’s Loans by providing written notice of such assumption to the Agent within five Business Days and otherwise complying with the procedure set out in Section 16(c) hereof, and if any other Loan Participant does not so elect in writing to assume its pro rata share of the Impaired Loan Participant’s Loans, the Agent shall send a further notice to each remaining Loan Participants, which in turn may (but shall not be obligated to) in its sole discretion assume the remaining available Loans of such Impaired Loan Participant on a pro rata basis by providing written notice of such assumption to the Agent within five Business Days and otherwise complying with the procedure set out in Section 16(c) hereof; and

          (z) to the extent that any of such Impaired Loan Participant’s Loans are not assumed by one or more of the other Loan Participants as contemplated in clause (x) or (y) above, or that applicable laws require the immediate repayment of all or a portion of such Impaired Loan Participant’s Loans, require the Borrower to repay the Loans advanced by such Impaired Loan Participant in full together with accrued interest, Break Amount, if any, the Prepayment Fee, if any, and all other amounts accrued and owing to such Impaired Loan Participant under the Operative Documents, whereupon the Borrower shall on the date specified in such notice (which shall be the earlier of the date on which applicable laws require the immediate repayment of all or a portion of such Impaired Loan Participant’s Loans and the Interest Payment Date first occurring not earlier than ten Business Days from the date of such notice), repay in full all such amounts. In the case of any prepayment effected pursuant to this clause (z), (A) in respect of the Break Amount payable to any Type A Loan Participant in association therewith, only 50% of the component thereof constituting Liquidity Break Amount shall be payable; provided, that, as to any such Liquidity Break Amount calculation, the Liquidity Reserve Differential shall not include the reduction of 0.25% per annum set forth in the definition thereof and (B) in respect of the Prepayment Fee (if any) payable to any Type B Loan Participant in association therewith, only 50% of such Prepayment Fee shall be payable.

34

[Facility Agreement [Atlas/747-8F 2011]]

For the avoidance of doubt, the failure by any Loan Participant to provide written notice of assumption of an Impaired Loan Participant’s commitments or Loans within the relevant time frame contemplated by clause (x) or (y) above, as applicable, shall be conclusive evidence that such Loan Participant has elected not to assume any such additional commitments or Loans. To the extent that any of such Impaired Loan Participant’s commitments or Loans are not assumed by one or more of the other Loan Participants as contemplated in clause (x) or (y) above, as applicable, the unassumed portion will be cancelled and the Commitments will be reduced accordingly.

     SECTION 9 Covenants of the Borrower.

          (a) Borrower Merger. The Borrower may not enter into any transaction (whether by way of reconstruction, reorganization, consolidation, amalgamation, merger, transfer, sale, lease or otherwise, a “Merger”) whereby all or substantially all of its undertaking, property and assets would become the property of any other Person or, in the case of any such Merger, of the continuing corporation resulting therefrom (the “Successor Corporation”) unless: (i) no Event of Default has occurred and is continuing or would result therefrom; (ii) the Person acquiring the undertaking, property or assets will become, or the Successor Corporation will be, liable for the obligations of the Borrower under the Operative Documents to which it is a party, and the Agent shall have received evidence reasonably satisfactory to it of such liability, (iii) such Person or the Successor Corporation is a corporation incorporated under the laws of any state in the United States (and, if not Delaware, all UCC filings shall have been effected in order to ensure that the Security Trustee continues to have a first priority and perfected lien against the Mortgage Estate in respect of each Designated Aircraft) and is a certified air carrier; (iv) all registrations, recordings and filings, and such other actions with respect to the Operative Documents, shall have been effected as shall be necessary or advisable in the reasonable opinion of the Agent to protect their security interest in each Designated Aircraft; and (v) such Person or the Successor Corporation has a Tangible Net Worth after giving effect to such Merger no less than the Tangible Net Worth of the Borrower immediately prior to such Merger (and the Agent shall have received evidence reasonably satisfactory to it to such effect). As used herein,

          “Tangible Net Worth” means, as at any date for any Person, the sum for such Person and its Subsidiaries (determined on a consolidated basis without duplication in accordance with generally accepted accounting principles), of the following:

     (a) the amount of capital stock, plus

     (b) the amount of surplus and retained earnings (or, in the case of a surplus or retained earnings deficit, minus the amount of such deficit), minus

     (c) the sum of the following: cost of treasury shares and the book value of all assets which should be classified as intangibles, including goodwill, minority interests, research and development costs, trademarks, trade names, copyrights, patents and franchises, and unamortized debt discount and expense.

          (b) U.S. Air Carrier. The Borrower covenants and agrees that at all times until the Lien of the Mortgage for each Designated Aircraft shall be discharged pursuant to

35

[Facility Agreement [Atlas/747-8F 2011]]

Section 14.01 thereof, it will be an “air carrier” within the meaning of the Federal Aviation Act operating under certificates issued pursuant to Section 40102(a) of such Act and shall otherwise meet the standards of the definition of U.S. Air Carrier.

          (c) Further Assurances. The Borrower covenants and agrees with each party. hereto as follows:

          (i) The Borrower will cause to be done, executed, acknowledged and delivered all and every such further acts, conveyances and assurances as any Holder shall reasonably require for accomplishing the purposes of this Agreement and the other Operative Documents; provided that any instrument or other document so executed by the Borrower will not expand any obligations or limit any rights of the Borrower in respect of the transactions contemplated by any Operative Documents. The Borrower shall cause each Designated Aircraft to remain duly registered, in the name of the Borrower, except as otherwise required or permitted hereunder or under the related Mortgage, under the Federal Aviation Act.

          (ii) The Borrower, at its expense, will cause (A) the Mortgage, all Mortgage Supplements and all amendments to the Mortgage, in each case, for each Designated Aircraft, to he promptly filed and recorded, or filed for recording, to the extent permitted under the Federal Aviation Act, or required under any other applicable law, (B) subject only to the consent of the Security Trustee (or the Aircraft Manufacturer, in the case of the FAA Bill of Sale for any Designated Aircraft), the registration with the International Registry of the contract of sale and the international interests with respect to each FAA Bill of Sale and/or Warranty Bill of Sale, the Mortgage and Mortgage Supplement, in each case, for each Designated Aircraft, and (C) the Lien of the Mortgage for each Designated Aircraft to at all times be and remain a first priority and perfected Lien on the Mortgage Estate thereunder (subject to Inchoate Liens). The Borrower agrees to furnish the Security Trustee and the Loan Participants with copies of the foregoing documents with recording and registration data as promptly as practicable following the issuance of same by the FAA and the International Registry.

The Borrower shall pay all reasonable costs and expenses (including reasonable costs and disbursements of counsel) incurred by the Security Trustee and the Holders after the date hereof in connection with (x) any supplements or amendments of the Operative Documents (including, without limitation, any related recording and registration costs) requested by Borrower or otherwise reasonably required to effectuate the intent of the Operative Documents, (y) any Event of Default and any enforcement or collection proceedings resulting therefrom or in connection with the negotiation of any restructuring or “work-out” (whether or not consummated), or (z) the enforcement of this Section 9(c).

          (d) Financial Information. The Borrower shall supply or procure the supply to the Agent in sufficient copies for all the Loan Participants, to the extent such materials are not made available on the Guarantor’s website:

          (i) as soon as practicable and in any event within 120 days after the end of each fiscal year of the Guarantor, consolidated statements of income and cash

36

[Facility Agreement [Atlas/747-8F 2011]]

flows and a consolidated statement of stockholders’ equity of the Guarantor and its Subsidiaries for such year, and a consolidated balance sheet of the Guarantor and its Subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit, all in reasonable detail and reported on by independent public accountants of recognized national standing selected by the Borrower (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Guarantor and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied (except for inconsistencies required by changes to GAAP and changes approved by such accountants in accordance with GAAP);

     (ii) as soon as practicable and in any event within 90 days after the end of each quarterly period (other than the last quarterly period) in each fiscal year of the Guarantor beginning after December 31, 2010, consolidated statements of income, stockholders’ equity and cash flows of the Guarantor and its Subsidiaries for the period from the beginning of the current fiscal year to the end of such quarterly period, and a consolidated balance sheet of the Guarantor and its Subsidiaries as at the end of such quarterly period, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year, all in reasonable detail and presenting fairly in all material respects the financial condition and results of operations of the Guarantor and its Subsidiaries, certified by the Guarantor’s chief executive officer or chief financial officer as having been prepared on a consolidated basis in accordance with GAAP consistently applied (except for inconsistencies required by changes to GAAP and changes approved by the accountants referred to in clause (i) above in accordance with GAAP), subject to normal year-end audit adjustments and the absence of footnotes; and

     (iii) The Borrower shall supply or procure the supply to the Agent in sufficient copies for all the Loan Participants, to the extent such materials are not made available on the Borrower’s website and provided that the Borrower is not prohibited or restricted by law from doing so:

          (x) promptly, any documents or information that the Guarantor files with the Securities and Exchange Commission and that is disclosable to the Guarantor’s shareholders; and

          (y) promptly, such further information regarding the Mortgage Estate in respect of each Designated Aircraft, financial condition, business and operations of the Borrower or the Guarantor as any Finance Party (through the Agent) may reasonably request.

     SECTION 10 Notices.

     All notices, demands, instructions and other communications required or permitted to be given to or made upon any party hereto shall be in writing and shall be personally delivered or

37

[Facility Agreement [Atlas/747-8F 2011]]

sent by registered or certified mail, postage prepaid, or by facsimile, or by prepaid courier service, and shall be effective upon receipt.

     Unless otherwise specified in a notice sent or delivered in accordance with the foregoing provisions of this Section 10, notices, demands, instructions and other communications in writing shall be given to or made upon the respective parties hereto at their respective addresses (or to their respective facsimile numbers) as follows: (a) if to the Borrower or the Security Trustee, to the respective addresses set forth in Section 14.06 of the Mortgage in respect of each Designated Aircraft, (b) if to a Loan Participant or the Agent, to the address set forth on Schedule I hereto, or (c) if to any subsequent Holder, addressed to such Holder at its address set forth in the Certificate Register maintained pursuant to the Mortgage in respect of the applicable Designated Aircraft.

     SECTION 11 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.

          (a) This Agreement shall in all respects be governed by, and construed in accordance with, the law of the State of New York, including all matters of construction, validity and performance.

          (b) Each party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Operative Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Operative Document shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any other Operative Document against another party or its properties in the courts of any jurisdiction.

          (c) Each party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10. Nothing in this Agreement or any other Operative Document will affect the right of any party to this Agreement or any other Operative Document to serve process in any other manner permitted by law.

38

[Facility Agreement [Atlas/747-8F 2011]]

          (e) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     SECTION 12 Invoices and Payment of Expenses.

     The Security Trustee, the Agent and the Loan Participants shall promptly submit to the Borrower for its prompt approval copies of invoices of the Transaction Expenses (as defined below) as they are received. The Borrower agrees to pay Transaction Expenses promptly upon receipt of invoices of such Transaction Expenses. For the purposes hereof, “Transaction Expenses” means (i) with respect to the preparation, negotiation, execution and delivery of this Agreement (and the term sheet relating hereto) and the closing or anticipated closing of each Designated Aircraft on the related Delivery Date, the reasonable fees, and out-of-pocket expenses and disbursements of Crowe & Dunlevy, P.C., special counsel in Oklahoma City, Oklahoma and Vedder Price P.C., special counsel to the Loan Participants (subject to any fee arrangements as separately agreed), (ii) all fees, taxes and other charges payable in connection with the recording or filing of instruments and financing statements, or registration of any international interest with the International Registry, (iii) each Loan Participant’s reasonable and documented out-of-pocket costs and expenses relating to the negotiation and closing of this transaction, and (iv) the structuring fee of the Underwriters as separately agreed and the Security Trustee fee as separately agreed; provided the Transaction Expenses of a Loan Participant which fails to fund its Loan for any Designated Aircraft notwithstanding the satisfaction of the applicable conditions precedent shall not be subject to reimbursement.

     SECTION 13 Section 1110 Compliance.

     Notwithstanding any provision herein or elsewhere contained to the contrary, it is understood and agreed among the parties hereto that the transactions contemplated by this Agreement, and the other Operative Documents are expressly intended to be, shall be and should be construed so as to be, entitled to the full benefits of 11 U.S.C. Section 1110, as amended from time to time, and any successor provision thereto.

     SECTION 14 Confidentiality. Each party hereto shall, and shall use all reasonable efforts to ensure that its respective officers, directors, employees and agents, maintain as confidential and shall not, without the prior written consent of the Borrower and the Agent, disclose to any third party the terms of any Operative Document, or any of the information, reports, invoices or documents (except to the extent that it is available on the Guarantor’s

39

[Facility Agreement [Atlas/747-8F 2011]]

website) supplied by or on behalf of any of the Parties, save that such party shall be entitled to disclose any such terms, information, reports, invoices or documents:

          (a) in connection with any proceedings arising out of or in connection with any of the Operative Documents to the extent that such party is advised by legal counsel that it is necessary to protect its interests or is legally required to do so; or if required to do so by an order of a court of competent jurisdiction whether in pursuance of any procedure for discovering documents or otherwise; or

          (b) pursuant to any law or regulation having the force of law (including rules and regulations of the SEC); or

          (c) to any fiscal, monetary, tax, governmental or other competent authority or supervisory boards and bodies; or

          (d) to its auditors, bankers, legal or other professional advisers (which are under an ethical obligation to or agree to hold such information confidential); or

          (e) in any manner contemplated by any of the Operative Documents; or

          (f) for due diligence purposes in connection with significant transactions or dealings involving any party, and which are outside the ordinary course of that party’s business, including investments, acquisitions or financings, to other potential parties to such dealings or transactions or their professional advisors, provided that such other parties (i) shall not be permitted to retain any copies of any of the Operative Documents or to disclose same to any third party; and (ii) shall enter into a confidentiality agreement on terms substantially similar to those contained in this Section 14, except that such confidentiality agreement shall not provide for any disclosure of the terms of the Operative Documents or any non-public information, including pursuant to tins due diligence exemption; or

          (g) if the information contained therein shall have emanated in conditions free from confidentiality restrictions from some person other than such party and such party would, but for the preceding provisions of this Section 14, have been free to disclose or use the same.

     SECTION 15 Nondisturbance.

     The Security Trustee and each Loan Participant each agrees that neither it nor anyone acting on its behalf will interfere in the Borrower’s quiet enjoyment of each Designated Aircraft so long as no Event of Default under the Mortgage relating to such Designated Aircraft shall have occurred and be continuing.

     SECTION 16 Miscellaneous.

          (a) The representations, warranties, indemnities and agreements of the Borrower, the Security Trustee and each Loan Participant provided for in this Agreement and each party’s obligations under any and all thereof, shall survive the expiration or other termination of this Agreement or any other Operative Document, except as expressly provided herein or therein.

40

[Facility Agreement [Atlas/747-8F 2011]]

          (b) This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. Neither this Agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified, except by an instrument in writing signed by the party or parties thereto.

          (c) (i) This Agreement shall be binding upon and shall inure to the benefit of, and shall be enforceable by, the parties hereto and their respective successors and permitted assigns including each successive holder of any Loan Certificate(s) issued and delivered pursuant to this Agreement or the Mortgage for any Designated Aircraft whether or not an express assignment to any such holder of rights under the Agreement has been made.

          (ii) The Borrower may not assign any of its rights or obligations under this Agreement or the other Operative Documents except to the extent expressly provided thereby.

          (iii) The Loan Participants may not assign their Commitments without the express written consent of the Borrower. Each Holder may assign its Loan Certificates, in whole or in part, to any Person as provided in Section 2.08 of the Mortgage, which assignment shall be effected pursuant to an agreement substantially in the form of Exhibit B hereto. Notwithstanding anything to the contrary contained herein, without the consent of the Borrower, no Holder may assign its Loan Certificates, in whole or in part, (i) in any manner which would result in a violation of the Securities Act or any other applicable law, (ii) so long as no Event of Default shall have occurred and be continuing, to (A) any airline, commercial air carrier, air freight forwarder, entity engaged in the business of parcel transport or other similar business that is a competitor of the Borrower, or any Person controlling, controlled by, or under common control with any such entity or (B) any hedge fund, (iii) so long as no Event of Default shall have occurred and be continuing, in an original principal amount of less than $10,000,000, (iv) such that, after giving effect to such assignment there shall be more than eight different Loan Participants or Holders and (v) if the effect of such assignment were to in any way diminish as at the date of such assignment Borrower’s rights or increase the Borrower’s liability or obligations or amounts owing in respect thereof (including with respect to withholding taxes, increased costs, interest rate adjustments or Swap Breakage Loss) above that which would result or would have been incurred as at the date of such assignment had such assignment or participation not occurred. For the avoidance of doubt, in the event that a Holder assigns or transfers a Loan Certificate in accordance with the foregoing (other than upon request by the Borrower or after the occurrence and continuation of an Event of Default) and, as a result of circumstances existing at the date the assignment or transfer occurs the Borrower’s rights or obligations are so diminished or increased, as applicable, then the Borrower shall have no liability or obligations or owe any amounts in respect thereof (including with respect to withholding taxes, increased costs, interest rate adjustments or Swap Breakage Loss) above that which would result or would have been incurred had such assignment or participation not occurred as at such date. Subject to Section 2(a), effective upon the assignment of any Commitment, the assigning Loan Participant shall be relieved of its obligations in respect of such Commitment to the extent the assignee thereof shall have become obligated in respect

41

[Facility Agreement [Atlas/747-8F 2011]]

thereof. The Borrower shall not be liable for any costs, fees or expenses in connection with any assignment of Commitments or transfer of Loan Certificates.

          (d) No Loan Participant shall have any obligation or duty to the Borrower, or to other Persons with respect to the transactions contemplated hereby except those obligations or duties of such Loan Participant expressly set forth in this Agreement and the other Operative Documents and no Loan Participant shall be liable for performance by any other party hereto of such other party’s obligations or duties hereunder. Without limitation of the generality of the foregoing, under no circumstances whatsoever shall any Loan Participant be liable to the Borrower for any action or inaction on the part of the Security Trustee in connection with the transactions contemplated herein, whether or not such action or inaction is caused by willful misconduct or gross negligence of the Security Trustee.

          (e) Any reference herein to an approval, consent or waiver to be given by the Loan Participants shall be deemed hereunder to be an approval, consent or waiver, as the case may be, if a Majority in Interest of Holders approve, consent or waive, as the case may be.

          (f) Anything herein to the contrary notwithstanding, any Loan Participant may pledge its Loans and related Loan Certificate to a Federal Reserve Bank, any European central bank or any other bank or other financial institution or authority in connection with a programmatic financing by such Loan Participant of certain of its assets.

          (g) The Operative Documents constitute the entire understanding of the parties relating to the subject matter thereof and supersedes all previous agreements, whether written or oral, concerning such subject matter.

          (h) If, at any time, any provision of the Operative Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

          (i) In no event shall any Party be liable on any theory of liability for any special, indirect, incidental, consequential or punitive damages, and each Party hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

     SECTION 17 Patriot Act; Money Laundering.

          (a) Each of the Agent and the Loan Participants hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower and the Guarantor, which information includes the name and address of the Borrower and Guarantor and other information that will allow each of the Agent and the Loan Participants (as the case may be) to identify the Borrower and the Guarantor in accordance with the Act.

42

[Facility Agreement [Atlas/747-8F 2011]]

          (b) For the purpose of the German Money Laundering Act (Geldwäschegesetz), the Borrower hereby confirms that it is acting for its own account.

     SECTION 18 Registrations with the International Registry.

     Each of the parries hereto consents to the registration with the International Registry of the international interests with respect to the Mortgage and each Mortgage Supplement, in each case, for each Designated Aircraft, and each party hereto covenants and agrees that it will take all such action reasonably requested by the Borrower or the Security Trustee in order to make any registrations with the International Registry, including becoming a registry user entity with the International Registry and providing consents to any registration as may be contemplated by the Operative Documents.

     SECTION 19 The Agent.

          (a) Appointment Powers and Immunities. Each holder of a Loan Certificate hereby appoints and authorizes Nord/LB to act as Agent hereunder and under the other Operative Documents with such powers as are specifically delegated to the Agent by the terms of this Agreement and of the other Operative Documents, together with such other powers as are reasonably incidental thereto. Nord/LB accepts such appointment. The Agent (which term as used in this sentence and in Section 19(d) and the first sentence of Section 19(e) hereof shall include reference to Nord/LB’s affiliates and its own and its affiliates’ officers, directors, employees and agents): (i) shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Operative Documents, and shall not by reason of this Agreement or any other Operative Document be a trustee for any holder of a Loan Certificate; (ii) shall not be responsible to the holder of a Loan Certificates for any recitals, statements, representations or warranties contained in this Agreement or in any other Operative Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Operative Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, any Loan Certificate or any other Operative Document or any other document referred to or provided for herein or therein or for any failure by the Borrower or any other person to perform any of its obligations hereunder or thereunder; (iii) shall not be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Operative Document; and (iv) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other Operative Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. The Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agent or attorneys-in-fact selected by it in good faith.

          (b) Reliance by Agent. The Agent shall be entitled to rely upon any certification, notice or other communication (including, without limitation, any thereof by telephone, telecopy, telex, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper person or persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Agent. As to any matters not expressly provided for by this Agreement or any other Operative Document, the Agent shall in all cases be fully protected in acting, or in refraining from acting,

43

[Facility Agreement [Atlas/747-8F 2011]]

hereunder or thereunder in accordance with instructions given by the Majority in Interest of Holders, as provided herein, or all of the holders of Loan Certificates as is required in such circumstance, and such instructions of such holder of a Loan Certificates and any action taken or failure to act pursuant thereto shall be binding on all of the holders of Loan Certificates.

          (c) Defaults. The Agent shall not be deemed to have knowledge or notice of the occurrence of a Default unless the Agent has received notice from a holder of a Loan Certificate or the Borrower specifying such Default and stating that such notice is a “Notice of Default”. The Agent shall (subject to Section 19(f) hereof) take such action with respect to such Default as shall be directed by the Majority in Interest of Holders, provided that, unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interest of the holders of Loan Certificates except to the extent that this Agreement expressly requires that such action be taken, or not be taken, only with the consent or upon the authorization of the Majority in Interest of Holders or all of the holders of Loan Certificates.

          (d) Indemnification. The holders of Loan Certificates agree to indemnify the Agent ratably in accordance with their respective Loan Certificates, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against the Agent (including by any holder of a Loan Certificate) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any other Operative Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or the enforcement of any of the terms hereof or thereof or of any such other documents, provided that no holder of a Loan Certificate shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the Agent

          (e) Non-Reliance on Agent and Other Holder of a Loan Certificate. Each holder of a Loan Certificate agrees that it has, independently and without reliance on the Agent or any other holder of a Loan Certificate, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Borrower and the Guarantor and decision to enter into the Operative Documents to which it is or is to be a party and that it will, independently and without reliance upon the Agent or any other holder of a Loan Certificate, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement. The Agent shall not be required to keep itself informed as to the performance or observance by the Borrower or the Guarantor of this Agreement or any of the other Operative Documents or any other document referred to or provided for herein or therein or to inspect their respective properties or books. Except for notices, reports and other documents and information expressly required to be furnished to the holders of Loan Certificates by the Agent hereunder, the Agent shall not have any duty or responsibility to provide any holder of a Loan Certificate with any credit or other information concerning the affairs, financial condition or business of Borrower or the Guarantor (or any of their affiliates) that may come into the possession of the Agent or any of its affiliates.

44

[Facility Agreement [Atlas/747-8F 2011]]

          (f) Failure to Act. Except for action expressly required of the Agent hereunder and under the other Operative Documents, the Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from the holders of Loan Certificates of their indemnification obligations under Section 19(d) hereof against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.

          (g) Resignation or Removal of Agent. Subject to the appointment and acceptance of a successor Agent as provided below, the Agent may resign at any time by giving notice thereof to the Holders, the Borrower and the Security Trustee, and the Agent may be removed at any time with or without cause by the Majority in Interest of Holders. Upon any such resignation or removal, the Majority in Interest of Holders (with, so long as no Event of Default has occurred and is continuing, the consent of the Borrower, not to be unreasonably withheld) shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Majority in Interest of Holders and shall have accepted such appointment within 30 days after the retiring Agent’s giving of notice of resignation or the Majority in Interest of Holders’ removal of the retiring Agent, then the retiring Agent may, on behalf of the holders of Loan Certificates, appoint a successor Agent. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After any retiring Agent’s resignation or removal hereunder as Agent, the provisions of this Section 19 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Agent. Unless an Event of Default has occurred and is continuing, a successor Agent shall be reasonably acceptable to the Borrower.

*      *      *

45

[Facility Agreement [Atias/747-8F 2011]]

          IN WITNESS WHEREOF, the parties hereto have caused this Facility Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

ATLAS AIR, INC., as Borrower
By:	/s/ Edward J. McGarvey
	Vice President & Treasurer

BANK OF UTAH, as Security Trustee
By:	/s/ Brett King
	Its: Vice President

NORDDEUTSCHE LANDESBANK GIROZENTRALE, as a Loan Participant and as Agent
By:	/s/ Harald Brauns
	Its:	Managing Director

By:	/s/ Tammo Reinmann
	Its:	Vice President

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Loan Participant
By:	/s/ Brian Bolotin
	Its:	Managing Director

By:	/s/ Charles Moran
	Its:	Director

[Facility Agreement [Atlas/747-8F 2011]]

BNP PARIBAS, as a Loan Participant
By:	/s/ Robert Papas
	Its:	Director Transportation Group Aviation Finance
By:	/s/ Stephanie Klein
	Its:	Associate
DEKABANK DEUTSCHE GIROZENTRALE, as a Loan Participant
By:	/s/ Angelika Beyer
	Its:	Angelika Beyer, Executive Director
By:	/s/ Jens Epping
	Its:	Jens Epping, Authorized Officer

EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer

     I, William J. Flynn, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Atlas Air Worldwide Holdings, Inc.;
2.	Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.	Based on my knowledge, the Financial Statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
	a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
	b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
	d)  Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
	a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 2, 2011	/s/ William J. Flynn
	William J. Flynn
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer

     I, Spencer Schwartz, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Atlas Air Worldwide Holdings, Inc.;
2.	Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.	Based on my knowledge, the Financial Statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting ( as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
	a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
	b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
	d)  Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
	a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 2, 2011	/s/ Spencer Schwartz
	Spencer Schwartz
	Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Section 1350 Certifications
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

     In connection with the Quarterly Report of Atlas Air Worldwide Holdings, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2011 as filed with the Securities and Exchange Commission (the “Report”), we, William J. Flynn and Spencer Schwartz, Chief Executive Officer and Chief Financial Officer, respectively, of the Company certify that to our knowledge:

     1. the Report complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange of 1934, as amended; and

     2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

     Date: August 2, 2011

/s/ William J. Flynn  

William J. Flynn 

President and Chief Executive Officer 

/s/ Spencer Schwartz  

Spencer Schwartz 

Senior Vice President and Chief Financial Officer 

XML



Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
Consolidated Balance Sheets
Allowance for doubtful accounts receivable	$ 1,668	$ 1,900
Preferred stock par value	$ 1	$ 1
Preferred stock shares authorized	10,000,000	10,000,000
Preferred stock shares issued	0	0
Common stock par value	$ 0.01	$ 0.01
Common stock authorized	50,000,000	50,000,000
Common stock issued	27,437,520	26,955,923
Common stock outstanding	26,282,856	25,937,014
Treasury stock shares	1,154,664	1,018,909

XML



Consolidated Statements of Operations (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Operating Revenue
ACMI	$ 160,442	$ 126,829	$ 306,477	$ 239,232
AMC charter	112,473	109,224	193,649	230,808
Commercial charter	71,067	114,828	136,603	171,481
Dry leasing	2,134	1,849	3,677	3,227
Other	3,458	3,451	6,775	6,665
Total Operating Revenue	349,574	356,181	647,181	651,413
Operating Expenses
Aircraft fuel	100,358	83,525	174,525	148,115
Salaries, wages and benefits	61,498	60,071	123,262	121,433
Maintenance, materials and repairs	46,860	39,603	96,929	71,220
Aircraft rent	41,567	38,183	79,921	76,333
Landing fees and other rent	12,603	12,778	23,943	24,487
Depreciation and amortization	8,775	8,567	17,105	17,646
Travel	9,922	7,798	19,044	15,413
Ground handling and airport fees	5,803	6,299	11,105	11,222
Gain on disposal of aircraft	(181)	(2,158)	(301)	(3,380)
Other	24,750	38,197	47,537	57,475
Total Operating Expenses	311,955	292,863	593,070	539,964
Operating Income	37,619	63,318	54,111	111,449
Non-operating Expenses / (Income)
Interest income	(5,080)	(5,224)	(10,196)	(9,130)
Interest expense	9,912	10,150	20,208	20,220
Capitalized interest	(6,185)	(3,517)	(11,602)	(6,606)
Other (Income) Expense, net	(406)	213	(364)	(8,622)
Total Non-operating Expenses / (Income)	(1,759)	1,622	(1,954)	(4,138)
Income before income taxes	39,378	61,696	56,065	115,587
Income tax expense	(14,907)	(28,920)	(21,131)	(49,200)
Net Income	24,471	32,776	34,934	66,387
Less: Net income (loss) attributable to noncontrolling interests	624	115	570	(59)
Net Income Attributable to Common Stockholders	$ 23,847	$ 32,661	$ 34,364	$ 66,446
Earnings per share:
Basic	$ 0.91	$ 1.27	$ 1.31	$ 2.59
Diluted	$ 0.90	$ 1.25	$ 1.30	$ 2.56
Weighted average shares:
Basic	26,269	25,767	26,155	25,676
Diluted	26,491	26,077	26,397	25,985

XML



Accrued Liabilities (Tables)

3 Months Ended

Jun. 30, 2011

Accrued Liabilities [Abstract]

Accrued Liabilities

		June 30, 2011		December 31, 2010
Maintenance	$	68,908	$	57,552
Salaries, wages and benefits		24,388		33,542
Aircraft fuel		30,835		17,710
Other		44,331		41,088
Accrued liabilities	$	168,462	$	149,892

XML



Document and Entity Information	3 Months Ended
	Jun. 30, 2011
Document And Entity Information [Abstract]
Document Type	10-Q
Document period end date	Jun. 30, 2011
Amendment flag	false
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2011
Current fiscal year end date	--12-31
Entity central index key	0001135185
Entity current reporting status	Yes
Entity filer category	Large Accelerated Filer
Entity registrant name	ATLAS AIR WORLDWIDE HOLDINGS INC
Entity voluntary filers	No
Entity well known seasoned issuer	Yes
Entity common stock shares outstanding	26,282,856

XML



Comprehensive Income (Tables)

3 Months Ended

Jun. 30, 2011

Scheduleofcomprehensiveincomelosstableabstract [Abstract]

Comprehensive Income

	For the Three Months Ended				For the Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Net Income Attributable to Common Stockholders	$	23,847	$	32,661	$	34,364	$	66,446
Unrealized loss on interest rate derivatives		(808)		-		(808)		-
Other		(18)		53		78		(30)
Income taxes related to items of Other comprehensive loss		302		(14)		282		10
Total other comprehensive income (loss)		(524)		39		(448)		(20)
Comprehensive income	$	23,323	$	32,700	$	33,916	$	66,426

XML



Financial Instruments

3 Months Ended

Jun. 30, 2011

Long Term Investments And Financial Instruments [Abstract]

Long-term Investments and Financial Instruments

5. Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are classified in the following hierarchy:

Level 1              Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2       Other inputs that are observable directly or indirectly, such as quoted prices in

active markets for similar assets or liabilities, or inactive quoted prices for identical assets or liabilities in inactive markets;

Level 3       Unobservable inputs reflecting assumptions about the inputs used in pricing the

asset or liability.

We endeavor to utilize the best available information in measuring fair value.

We maintain Cash and cash equivalents and Short-term investments, which include cash on hand, demand deposits, other cash investments that are highly liquid in nature and have original maturities of three months or less at acquisition, certificates of deposit, current portion of debt securities and money market funds. The carrying value for Cash and cash equivalents and Short-term investments is based on cost, which approximates fair value.

Long-term investments consist of debt securities for which we have both the ability and the intent to hold until maturity. These investments are classified as held-to-maturity and reported at amortized cost. The fair value of our Long-term investments was based on a discounted cash flow analysis using the contractual cash flows of the investments and a discount rate derived from unadjusted quoted interest rates for debt securities of comparable risk. Such debt securities represent investments in Pass-Through Trust Certificates related to enchanced equipment trust certificates (“EETCs”) issued by Atlas in 1998, 1999 and 2000. Interest on debt securities and accretion of discounts using the effective interest method are included in Interest income.

The fair value of our EETCs was estimated based on Level 3 inputs. We obtained Level 2 inputs of quoted market prices of our equipment notes and used them as a basis for valuing the EETCs.

The fair value of our pre-delivery deposit (“PDP”) financing facility and term loans was based on a discounted cash flow analysis using current borrowing rates for instruments with similar terms.

The fair value of our interest rate derivatives was based on Level 2 inputs utilized in expected cash flow models. The incorporated market inputs include the implied forward London InterBank Offered Rate (“LIBOR”) yield curve for the same period as the future interest swap settlements. These derivatives are designated as hedging instruments.

The following table summarizes the carrying amount, estimated fair value and classification of our financial instruments as of:

			June 30, 2011
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
	Cash and cash equivalents	$	462,011	$	462,011	$	462,011	$	-	$	-
	Short-term investments		7,739		7,739		-		-		7,739
	Long-term investments and accrued interest		130,383		159,085		-		-		159,085
		$	600,133	$	628,835	$	462,011	$	-	$	166,824
Liabilities
	Interest rate derivatives	$	808	$	808	$	-	$	808	$	-
	1998 EETCs		137,156		153,310		-		-		153,310
	1999 EETCs		152,444		161,989		-		-		161,989
	2000 EETCs		56,865		62,707		-		-		62,707
	Term loans		69,761		69,634		-		-		69,634
		$	417,034	$	448,448	$	-	$	808	$	447,640

			December 31, 2010
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
	Cash and cash equivalents	$	588,852	$	588,852	$	588,852	$	-	$	-
	Short-term investments		6,211		6,211		-		-		6,211
	Long-term investments and accrued interest		127,094		157,787		-		-		157,787
		$	722,157	$	752,850	$	588,852	$	-	$	163,998
Liabilities
	1998 EETCs	$	145,012	$	164,379	$	-	$	-	$	164,379
	1999 EETCs		159,043		171,478		-		-		171,478
	2000 EETCs		58,485		65,230		-		-		65,230
	PDP financing facility		46,871		46,861		-		-		46,861
	Term loans		77,822		79,198		-		-		79,198
		$	487,233	$	527,146	$	-	$	-	$	527,146

The following table presents the carrying value, gross unrealized gains and fair value of our long-term investments by contractual maturity as of:

			June 30, 2011						December 31, 2010
			Carrying Value		Gross Unrealized Gains		Fair Value		Carrying Value		Gross Unrealized Gains		Fair Value
Debt securities
Due after five but within ten years		$	130,383	$	28,702	$	159,085	$	73,356	$	18,363	$	91,719
Due after ten years			-		-		-		53,738		12,330		66,068
	Total	$	130,383	$	28,702	$	159,085	$	127,094	$	30,693	$	157,787

Interest Rate Derivatives

We are exposed to changes in interest ratesfor projected issuances of debt related to the future financing of the Boeing 747-8F aircraft that we have on order. We use forward-starting interest rate swaps to effectively fix the interest rate on an anticipated debt issuance in 2011.The use of forward-starting interest rate swaps effectively converts our floating-rate forecasted debt issuance to a fixed rate basis. When entering into forward-starting interest rate swaps, we become exposed to both credit risk and market risk. We are subject to counterparty credit risk when the value of the forward-starting interest rate swaps are a gain and the risk exists that the counterparty will fail to perform under the terms of the contract. We are subject to market risk with respect to changes in the underlying benchmark interest rate that impacts the fair value of the forward-starting interest rate swaps. We manage our counterparty credit risk by only entering into forward-starting interest rate swaps with major financial institutions with investment-grade credit ratings. We manage our market risk by matching the terms of each forward-starting interest rate swap with a specified expected debt issuance. We do not use derivative instruments for trading or speculative purposes.

We formally document all relationships between hedging instruments and hedged items, as well as our risk management objectives and strategies for undertaking the hedge. This process includes specific identification of the hedging instrument and the hedged transaction, the nature of the risk being hedged and how the hedging instrument's effectiveness will be assessed. Both at the inception of the hedge and on an ongoing basis, we assess whether the derivatives used in a projected transaction are highly effective in offsetting changes in cash flows or the fair value of hedged items.

In May 2011, we entered into two forward-starting interest rate swaps with a total notional value of $237.5 million to hedge the risk of changes in quarterly interest payments due to fluctuations in the forward 90-day LIBOR swap rate for anticipated fixed-rate debt issuances in 2011. We designated these forward-starting interest rate swaps as cash flow hedges. Changes in the fair value of the effective portion of the forward-starting interest rate swaps will be recorded as a gain or loss in other comprehensive income (loss) until the underlying hedged item is recognized in net income. We classify both the net earnings and cash flow impact from these forward-starting interest rate swaps consistent with the underlying hedged item. In the event the debt is not issued and the forward-starting interest rate swaps are terminated, any gain or loss from the termination would be recorded in net income immediately. Hedging ineffectiveness and a net earnings impact would occur if the change in the value of the hedge did not offset the change in the value of the underlying hedged item.

The forward-starting interest rate swaps outstanding as of June 30, 2011 relate to anticipated debt issuances in the fourth quarter of 2011. The fair value of these forward-starting interest rate swaps was a short-term liability of $0.8 million as of June 30, 2011.

We recorded unrealized pre-tax and after-tax losses of $0.8 million and $0.5 million in Other comprehensive loss for changes in the fair value of our forward-starting interest rate swaps during both the three and six months ended June 30, 2011. There was no ineffectiveness associated with these hedges during the three and six months ended June 30, 2011.

XML



DHL Investment and Polar (Tables Details) (Polar [Member], USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Polar [Member]
Schedule of Equity Method Investments [Line Items]
ACMI revenue from Polar	$ 60,272	$ 47,081	$ 106,650	$ 91,739
Other revenue from Polar	2,837	2,837	5,675	5,675
Ground handling and airport fees to Polar	312	667	559	1,115
Receivables from Polar	3,509		3,509		8,009
Payables to Polar	$ 7,172		$ 7,172		$ 2,945

XML



Comprehensive Income (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Other Comprehensive Income (Loss), Tax [Abstract]
Net Income Attributable to Common Stockholders	$ 23,847	$ 32,661	$ 34,364	$ 66,446
Unrealized loss on derivative instruments	(808)	0	(808)	0
Other	(18)	53	78	(30)
Income taxes related to items of Other comprehensive income	302	(14)	282	10
Other Comprehensive Income (Loss)	(524)	39	(448)	(20)
Comprehensive Income	$ 23,323	$ 32,700	$ 33,916	$ 66,426

XML



Earnings Per Share (Tables)

3 Months Ended

Jun. 30, 2011

Earnings Per Share Tables [Abstract]

Calculations of Basic and Diluted EPS

	For the Three Months Ended				For the Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Numerator:
Net Income Attributable to Common Stockholders	$	23,847	$	32,661	$	34,364	$	66,446
Denominator:
Basic EPS weighted average shares outstanding		26,269		25,767		26,155		25,676
Effect of dilutive stock options and restricted stock		222		310		242		309
Diluted EPS weighted average shares outstanding		26,491		26,077		26,397		25,985
EPS:
Basic	$	0.91	$	1.27	$	1.31	$	2.59
Diluted	$	0.90	$	1.25	$	1.30	$	2.56

XML



Earnings Per Share

3 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share

10. Earnings Per Share

Basic earnings per share (“EPS”) represents net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period. There were no anti-dilutive restricted shares and options that were out of the money and excluded for the three and six months ended June 30, 2011 and 2010.

The calculations of basic and diluted EPS were as follows:

	For the Three Months Ended				For the Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Numerator:
Net Income Attributable to Common Stockholders	$	23,847	$	32,661	$	34,364	$	66,446
Denominator:
Basic EPS weighted average shares outstanding		26,269		25,767		26,155		25,676
Effect of dilutive stock options and restricted stock		222		310		242		309
Diluted EPS weighted average shares outstanding		26,491		26,077		26,397		25,985
EPS:
Basic	$	0.91	$	1.27	$	1.31	$	2.59
Diluted	$	0.90	$	1.25	$	1.30	$	2.56

Diluted shares reflect the potential dilution that could occur from stock options and restricted shares using the treasury stock method. The calculation does not include restricted shares and units in which performance or market conditions were not satisfied of 0.3 million for both the three and six months ended June 30, 2011, and 0.2 million and 0.3 million for the threeand six months June 30, 2010, respectively.

XML



Basis of Presentation

3 Months Ended

Jun. 30, 2011

Basis Of Presentation [Abstract]

Basis Of Presentation

1. Basis of Presentation

Our consolidated financial statements include the accounts of the holding company Atlas Air Worldwide Holdings, Inc. (“AAWW”) and its consolidated subsidiaries. AAWW is the parent company of its principal operating subsidiary, Atlas Air, Inc. (“Atlas”), and of Polar Air Cargo LLC (“Old Polar”). AAWW is also the parent company of several subsidiaries related to our dry leasing services (collectively referred to as “Titan”). In addition, we are the primary beneficiary of Global Supply Systems Limited (“GSS”), a consolidated subsidiary. AAWW has a 51% equity interest and 75% voting interest in Polar Air Cargo Worldwide, Inc. (“Polar”). We record our share of Polar's results under the equity method of accounting.

The terms “we,” “us,” “our,” and the “Company” mean AAWW and all entities included in its consolidated financial statements.

We provide outsourced aircraft and aviation operating services throughout the world, serving Africa, Asia, Australia, Europe, the Middle East, North America and South America through: (i) contractual service arrangements, including contracts through which we provide aircraft to customers and value-added services, including crew, maintenance and insurance (“ACMI”), as well as contracts through which we provide crew, maintenance and insurance, with the customer providing the aircraft (“CMI”); (ii) military charter services (“AMC Charter”); (iii) seasonal, commercial and ad-hoc charter services (“Commercial Charter”); and (iv) dry leasing or sub-leasing of aircraft and engines (“Dry Leasing” or “Dry Lease”).

The accompanying unaudited consolidated financial statements and related notes (the “Financial Statements”) have been prepared in accordance with the U.S. Securities and Exchange Commission (the “SEC”) requirements for quarterly reports on Form 10-Q, and consequently, exclude certain disclosures normally included in audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated. The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes included in the AAWW Annual Report on Form 10-K for the year ended December 31, 2010, which included additional disclosures and a summary of our significant accounting policies. In our opinion, the Financial Statements contain all adjustments, consisting of normal recurring items, necessary to fairly state the financial position of AAWW and its consolidated subsidiaries as of June 30, 2011, the results of operations for the three and six months ended June 30, 2011 and 2010, cash flows for thesix months ended June 30, 2011 and 2010, and shareholders' equity as of and for the sixmonths ended June 30, 2011 and 2010.

For interim accounting purposes, we recognize income taxes using an estimated annual effective tax rate.

Our quarterly results are subject to seasonal and other fluctuations, and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year.

Except for per share data, all dollar amounts are in thousands unless otherwise noted.

XML



Commitments and Contingencies (Details)	Jun. 30, 2011
Commitments And Contingencies Details [Abstract]
Aircraft under purchase contracts	12
Rights to acquire additional number of aircraft	14

XML



Segment Reporting

3 Months Ended

Jun. 30, 2011

Segment Reporting [Abstract]

Segment Reporting

7. Segment Reporting

We have the following reportable segments: ACMI, AMC Charter, Commercial Charter and Dry Leasing. We use an economic performance metric (“Direct Contribution”) that shows the profitability of each segment after allocation of direct ownership costs. Direct Contribution consists of Income before income taxes and excludes the following: special charges, nonrecurring items, gains on the disposal of aircraft, unallocated revenue and unallocated fixed costs. Direct ownership costs include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense related to aircraft debt, interest income on debt securities and aircraft depreciation. Unallocated income and expenses include corporate overhead, non-aircraft depreciation, interest income, foreign exchange gains and losses, other revenue and other non-operating costs, including special items. Management uses Direct Contribution to measure segment profitability as it shows each segment's contribution to unallocated fixed costs. Each segment has different operating and economic characteristics that are separately reviewed by our senior management.

Management allocates the costs attributable to aircraft operation and ownership among the various segments based on the aircraft type and activity levels in each segment. Depreciation and amortization expense, aircraft rent, maintenance expense, and other aircraft related expenses are allocated to segments based upon aircraft utilization because individual aircraft are utilized across segments interchangeably.In addition, certain ownership costs are directly apportioned to the ACMI segment. Other allocation methods are standard activity-based methods that are commonly used in the industry.

The ACMI segment provides aircraft, crew, maintenance and insurance services to customers. Also included in the ACMI segment are the results of operations for CMI, which we began providing in the second quarter of 2010. CMI provides crew, maintenance and insurance services, with the customer providing the aircraft. Under both services, the customers utilize an insured and maintained aircraft with crew in exchange for a guaranteed monthly level of operation at a predetermined rate for a defined period of time. The customer bears the commercial revenue risk and the obligation for other direct operating costs, including fuel. The Direct Contribution from Express Network ACMI flying is reflected as ACMI.

The AMC Charter segment provides full-planeload charter flights to the U.S. Military. In addition to cargo flights, the AMC Charter segment includes passenger flights, which we began providing in the second quarter of 2011. We also earn commissions on subcontracting certain flying of oversized cargo, or in connection with flying cargo into areas of military conflict where we cannot perform these services on our own. Revenue from the AMC Charter business is typically derived from one-year contracts on a cost-plus basis with the AMC. Our current AMC contract runs from January 1, 2011 through December 31, 2011. Although we are responsible for the direct operating costs of the aircraft, the price paid for fuel consumed during AMC flights is fixed by the U.S. Military. We receive reimbursement from the AMC each month if the price of fuel paid by us to vendors for AMC missions exceeds the fixed price. Alternatively, if the price of fuel paid by us is less than the fixed price, we pay the difference to the AMC each month.

The Commercial Charter segment provides aircraft charters to freight forwarders, airlines and other air cargo customers. Charters are often paid in advance and we typically bear the direct operating costs.

The Dry Leasing segment provides for the leasing of aircraft and engines to customers.

Other represents revenue for services that are not allocated to any segment, includingadministrative and management support servicesand flight simulator training.

The following table sets forth Operating Revenue and Direct Contribution for our reportable business segments reconciled to Operating Income and Income before Income Taxes:

		For the Three Months Ended				For the Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Operating Revenue:
ACMI	$	160,442	$	126,829	$	306,477	$	239,232
AMC Charter		112,473		109,224		193,649		230,808
Commercial Charter		71,067		114,828		136,603		171,481
Dry Leasing		2,134		1,849		3,677		3,227
Other		3,458		3,451		6,775		6,665
Total Operating Revenue	$	349,574	$	356,181	$	647,181	$	651,413

Direct Contribution:
ACMI	$	36,795	$	30,894	$	59,066	$	52,288
AMC Charter		19,743		35,666		33,942		76,277
Commercial Charter		8,590		38,487		17,630		52,167
Dry Leasing		1,185		1,255		2,013		2,127
Total Direct Contribution for Reportable Segments		66,313		106,302		112,651		182,859
Add back (subtract):
Unallocated income and expenses		(27,116)		(46,764)		(56,887)		(70,652)
Gain on disposal of aircraft		181		2,158		301		3,380
Income before Income Taxes		39,378		61,696		56,065		115,587
Add back (subtract):
Interest income		(5,080)		(5,224)		(10,196)		(9,130)
Interest expense		9,912		10,150		20,208		20,220
Capitalized interest		(6,185)		(3,517)		(11,602)		(6,606)
Other (Income) Expense, net		(406)		213		(364)		(8,622)
Operating Income	$	37,619	$	63,318	$	54,111	$	111,449

XML



Income Taxes

3 Months Ended

Jun. 30, 2011

Income Taxes [Abstract]

Income Taxes

12. Income Taxes

Our effective income tax rates were 37.9% and 46.9% for the three months ended June 30, 2011 and2010, respectively, and were 37.7% and 42.6%for the six months ended June 30, 2011 and 2010, respectively. The changes in the effective ratesfrom 2010 to 2011 were primarily due to non-deductible litigation settlements in 2010. The effective rates differ from the U.S. federal statutory rate due to the income tax impact of global operations, U.S. state income taxes, the non-deductibility of certain expenses for tax purposes, and the relationship of these items to our projected operating results for the year.

XML



Commitments and Contingencies

3 Months Ended

Jun. 30, 2011

Commitments And Contingencies [Abstract]

Commitments and Contingencies Disclosure

8. Commitments and Contingencies

In 2006, we entered into an agreement with The Boeing Company (“Boeing”) providing for our purchase of 12 747-8F aircraft (the “Boeing 747-8F Agreement”). The Boeing 747-8F Agreement provided for deliveries of the aircraft to begin in 2010, with all 12 deliveries originally contractually scheduled for delivery by the end of 2011. In addition, the Boeing 747-8F Agreement provides us with rights to purchase up to an additional 14 747-8F aircraft, of which one is being held under option. In 2009, Boeing announced a delay and proposed a new delivery schedule for our deliveries.

In March 2010, we entered into an agreement with Boeing to reschedule the delivery of our 747-8F aircraft and option aircraft under the Boeing 747-8F Agreement with the first delivery occurring in early 2011.

In September 2010, Boeing announced a further delay and proposed a new delivery schedule for certain of our deliveries. In July 2011, Boeing proposed an updated delivery schedule which we are reviewing. That proposed schedule shows that our first 747-8F aircraft is to be delivered early in the fourth quarter of 2011. Boeing has agreed with us to suspend payments for the delayed aircraft under the above agreement until a revised delivery and payment schedule has been agreed upon.

XML



Financial Instruments (Text Details) (USD $) In Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
Interest Rate Derivatives [Abstract]
Notional Amount of Interest Rate Derivatives	$ 237.5	$ 237.5
Pre-tax Loss in OCI for Changes in the Fair Value Interest Rate Derivatives	(0.8)	(0.8)
After-tax Loss in OCI for Changes in the Fair Value Interest Rate Derivatives	$ (0.5)	$ (0.5)

XML



Accrued Liabilities

3 Months Ended

Jun. 30, 2011

Accrued Liabilities [Abstract]

Accrued Liabilities

6. Accrued Liabilities

Accrued liabilities consisted of the following as of:

		June 30, 2011		December 31, 2010
Maintenance	$	68,908	$	57,552
Salaries, wages and benefits		24,388		33,542
Aircraft fuel		30,835		17,710
Other		44,331		41,088
Accrued liabilities	$	168,462	$	149,892

XML



Consolidated Statements of Stockholders Equity (USD $) In Thousands	Total	Total Stockholders Equity	Common Stock	Treasury Stock	Additional Paid In Capital	Accumulated Other Comprehensive Income	Retained Earnings	Noncontrolling Interest
Balance at at Dec. 31, 2009	$ 888,757	$ 886,273	$ 266	$ (26,394)	$ 481,074	$ 471	$ 430,856	$ 2,484
Net Income Attributable to Common Stockholders	66,387	66,446					66,446	(59)
Other Comprehensive Loss	(20)	(20)				(20)
Other Comprehensive Income (Loss) Including Noncontrolling Interest	(31)							(11)
Comprehensive income	66,356	66,426
Stock option and restricted stock compensation	7,751	7,751			7,751
Purchase of shares of treasury stock	(5,713)	(5,713)		(5,713)
Exercise of employee stock options	1,335	1,335			1,335
Issuance of shares of restricted stock			2		(2)
Tax benefit on restricted stock and stock options	1,420	1,420			1,420
Balance at at Jun. 30, 2010	959,906	957,492	268	(32,107)	491,578	451	497,302	2,414
Balance at at Dec. 31, 2010	1,050,090	1,046,443	270	(32,248)	505,297	458	572,666	3,647
Net Income Attributable to Common Stockholders	34,934	34,364					34,364	570
Other Comprehensive Loss	(448)	(448)				(448)
Other Comprehensive Income (Loss) Including Noncontrolling Interest	(373)							75
Comprehensive income	34,561	33,916				0	0
Stock option and restricted stock compensation	6,540	6,540			6,540
Purchase of shares of treasury stock	(9,126)	(9,126)		(9,126)
Exercise of employee stock options	4,429	4,429			4,429
Issuance of shares of restricted stock			4		(4)
Tax benefit on restricted stock and stock options	2,946	2,946			2,946
Balance at at Jun. 30, 2011	$ 1,089,440	$ 1,085,148	$ 274	$ (41,374)	$ 519,208	$ 10	$ 607,030	$ 4,292

XML



Recent Accounting Pronouncements

3 Months Ended

Jun. 30, 2011

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

2. Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board amended its guidance on the presentation ofcomprehensive income to increase the prominence of items reported in other comprehensive income. The new guidance requires that all components of comprehensive income in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements.The new guidance is effective as of the beginning of 2012 and itsadoption will not have any impact on ourfinancial condition, results of operations or cash flows.

XML



Financial Instruments (Contractual Maturity Table Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Debt securities
Due after five but within ten years, carrying value	$ 130,383	$ 73,356
Due after ten years, carrying value	0	53,738
Total, carrying value	130,383	127,094
Due after five but within ten years, gross unrealized gains	28,702	18,363
Due after ten years, gross unrealized gains	0	12,330
Total, gross unrealized gains	28,702	30,693
Due after five but within ten years, fair value	159,085	91,719
Due after ten years, fair value	0	66,068
Total, fair value	$ 159,085	$ 157,787

XML



DHL Investment and Polar

3 Months Ended

Jun. 30, 2011

DHL Investment And Polar [Abstract]

DHL Investment And Polar

3. DHL Investment and Polar

Polar provides air cargo capacity to its customers, including DHL Network Operations (USA), Inc. ("DHL"), through a blocked-space agreement that began on October 27, 2008. The aggregate carrying value of our Polar investment at June 30, 2011 and December 31, 2010 was $5.3million and was included within Deposits and other assets.

Polar currently operates six 747-400 freighter aircraft that are subleased from us.  An additional two aircraft are operated by Atlas to support the Polar network and DHL through an alliance agreement whereby Atlas provides ACMI services to Polar. We also provide incremental charter capacity to Polar on an as-needed basis. Atlas and Polar have entered into various agreements under which we provide Polar with crew, maintenance and insurance for the subleased aircraft. Collectively, these service agreements and the subleases are referred to as “Express Network ACMI”. We provide Polar with certain management and administrative services under a shared services agreement. In addition, Polar and Atlas provide each other with sales and ground support services under a general sales and services agreement. The following table summarizes our transactions with Polar:

		For the Three Months Ended				For the Six Months Ended
Revenue and Expenses:			June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
	ACMI revenue from Polar	$	60,272	$	47,081	$	106,650	$	91,739
	Other revenue from Polar	$	2,837	$	2,837	$	5,675	$	5,675
	Ground handling and airport fees to Polar	$	312	$	667	$	559	$	1,115
Accounts receivable/payable as of:			June 30, 2011		December 31, 2010
	Receivables from Polar	$	3,509	$	8,009
	Payables to Polar	$	7,172	$	2,945

XML



DHL Investment and Polar (Text Details) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Equity Method Investment, Summarized Financial Information [Abstract]
The aggregate carrying value of our Polar investment	$ 5.3	$ 5.3

XML



Accrued Liabilities (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Accrued Liabilities Details [Abstract]
Maintenance	$ 68,908	$ 57,552
Salaries, wages and benefits	24,388	33,542
Aircraft fuel	30,835	17,710
Other	44,331	41,088
Accrued liabilities	$ 168,462	$ 149,892

XML



Financial Instruments (Fair Value Table Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Dec. 31, 2009
Assets
Cash and cash equivalents	$ 462,011	$ 588,852	$ 604,021	$ 613,740
Short-term investments	7,739	6,211
Long-term investments and accrued interest	130,383	127,094
Carrying Value
Assets
Cash and cash equivalents	462,011	588,852
Short-term investments	7,739	6,211
Long-term investments and accrued interest	130,383	127,094
Financial Instruments Assets	600,133	722,157
Liabilities
Interest Rate Derivatives	808
1998 EETCs	137,156	145,012
1999 EETCs	152,444	159,043
2000 EETCs	56,865	58,485
PDP Financing Facility		46,871
Term Loans	69,761	77,822
Financial Instruments Liabilities	417,034	487,233
Fair Value
Assets
Cash and cash equivalents	462,011	588,852
Short-term investments	7,739	6,211
Long-term investments and accrued interest	159,085	157,787
Financial Instruments Assets	628,835	752,850
Liabilities
Interest Rate Derivatives	808
1998 EETCs	153,310	164,379
1999 EETCs	161,989	171,478
2000 EETCs	62,707	65,230
PDP Financing Facility		46,861
Term Loans	69,634	79,198
Financial Instruments Liabilities	448,448	527,146
Level 1
Assets
Cash and cash equivalents	462,011	588,852
Short-term investments	0	0
Long-term investments and accrued interest	0	0
Financial Instruments Assets	462,011	588,852
Liabilities
Interest Rate Derivatives	0
1998 EETCs	0	0
1999 EETCs	0	0
2000 EETCs	0	0
PDP Financing Facility		0
Term Loans	0	0
Financial Instruments Liabilities	0	0
Level 2
Assets
Cash and cash equivalents	0	0
Short-term investments	0	0
Long-term investments and accrued interest	0	0
Financial Instruments Assets	0	0
Liabilities
Interest Rate Derivatives	808
1998 EETCs	0	0
1999 EETCs	0	0
2000 EETCs	0	0
PDP Financing Facility		0
Term Loans	0	0
Financial Instruments Liabilities	808	0
Level 3
Assets
Cash and cash equivalents	0	0
Short-term investments	7,739	6,211
Long-term investments and accrued interest	159,085	157,787
Financial Instruments Assets	166,824	163,998
Liabilities
Interest Rate Derivatives	0
1998 EETCs	153,310	164,379
1999 EETCs	161,989	171,478
2000 EETCs	62,707	65,230
PDP Financing Facility		46,861
Term Loans	69,634	79,198
Financial Instruments Liabilities	$ 447,640	$ 527,146

XML



Comprehensive Income

3 Months Ended

Jun. 30, 2011

Comprehensive Income [Abstract]

Comprehensive Income

11. Comprehensive Income

Comprehensive income includes changes in the fair value of certain financial derivative instruments, which qualify for hedge accounting, and other items. The differences between net income attributable to common stockholders and comprehensive income were as follows:

	For the Three Months Ended				For the Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Net Income Attributable to Common Stockholders	$	23,847	$	32,661	$	34,364	$	66,446
Unrealized loss on interest rate derivatives		(808)		-		(808)		-
Other		(18)		53		78		(30)
Income taxes related to items of Other comprehensive loss		302		(14)		282		10
Total other comprehensive income (loss)		(524)		39		(448)		(20)
Comprehensive income	$	23,323	$	32,700	$	33,916	$	66,426

XML



Concentration of Credit Risk and Significant Customers

3 Months Ended

Jun. 30, 2011

Concentration Of Credit Risk And Significant Customers [Abstract]

Concentration of Credit Risk and Significant Customers

4. Concentration of Credit Risk and Significant Customers

We are exposed to concentration of credit risk by our customers. The following table summarizes our significant exposure to Polar andthe U.S. Military Air Mobility Command (“AMC”). We have not experienced credit issues with either of these customers.No other customer accounted for 10.0% or more of our Total Operating Revenue.

		For the Three Months Ended		For the Six Months Ended
Revenue as a % of Total Operating Revenue:		June 30, 2011	June 30, 2010	June 30, 2011	June 30, 2010
	AMC	32.2%	30.7%	29.9%	35.4%
	Polar	18.1%	14.0%	17.4%	15.0%
		For the Three Months Ended		For the Six Months Ended
Revenue as a % of Total ACMI Revenue:		June 30, 2011	June 30, 2010	June 30, 2011	June 30, 2010
	Polar	37.6%	37.1%	34.8%	38.3%
Accounts receivable as a % of Total Accounts receivable, net of allowance, as of:		June 30, 2011	December 31, 2010
	AMC	25.1%	10.5%
	Polar	4.2%	10.2%

XML



Concentration of Credit Risk and Significant Customers (Tables)

3 Months Ended

Jun. 30, 2011

Concentration Of Credit Risk And Significant Customers Tables [Abstract]

Concentration of Credit Risk by Our Customers

		For the Three Months Ended		For the Six Months Ended
Revenue as a % of Total Operating Revenue:		June 30, 2011	June 30, 2010	June 30, 2011	June 30, 2010
	AMC	32.2%	30.7%	29.9%	35.4%
	Polar	18.1%	14.0%	17.4%	15.0%
		For the Three Months Ended		For the Six Months Ended
Revenue as a % of Total ACMI Revenue:		June 30, 2011	June 30, 2010	June 30, 2011	June 30, 2010
	Polar	37.6%	37.1%	34.8%	38.3%
Accounts receivable as a % of Total Accounts receivable, net of allowance, as of:		June 30, 2011	December 31, 2010
	AMC	25.1%	10.5%
	Polar	4.2%	10.2%

XML



Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Abstract]
Effective Income Tax Rate	37.90%	46.90%	37.70%	42.60%

XML



Concentration of Credit Risk and Significant Customers (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
AMC
Revenue Percentage Total Revenue [Abstract]
Revenue as a percentage of Total Operating Revenue	32.20%	30.70%	29.90%	35.40%
Receivables Percentage Total Receivables [Abstract]
Accounts Receivable as a percentage of Total Accounts receivable, net of allowance	25.10%				10.50%
Polar
Revenue Percentage Total Revenue [Abstract]
Revenue as a percentage of Total Operating Revenue	18.10%	14.00%	17.40%	15.00%
ACMI Revenue Net Percentage [Abstract]
Revenue as a percentage of Total ACMI Revenue	37.60%	37.10%	34.80%	38.30%
Receivables Percentage Total Receivables [Abstract]
Accounts Receivable as a percentage of Total Accounts receivable, net of allowance	4.20%				10.20%

XML



Consolidated Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Operating Activities:
Net Income Attributable to Common Stockholders	$ 34,364	$ 66,446
Less: Net income (loss) attributable to noncontrolling interests	570	(59)
Net Income	34,934	66,387
Adjustments to reconcile Net Income to net cash provided by operating activities:
Depreciation and amortization	17,105	17,646
Amortization of debt discount	2,428	2,670
Amortization of operating lease discount	1,193	1,166
Amortization of debt issuance costs	147	146
Accretion of debt securities discount	(4,112)	(3,900)
Provision for allowance for doubtful accounts	45	188
Gain on disposal of aircraft	(301)	(3,380)
Deferred taxes	3,824	14,811
Stock-based compensation expense	6,540	7,751
Changes in:
Accounts receivable	(4,081)	(5,098)
Prepaid expenses and other current assets	(15,525)	3,406
Deposits and other assets	(4,254)	(9,518)
Accounts payable and accrued liabilities	35,723	49,745
Net cash provided by operating activities	73,666	142,020
Investing Activities:
Capital expenditures	(129,559)	(34,801)
Investment in debt securities	0	(100,090)
Proceeds from short-term investments	3,468	3,212
Proceeds from disposal of aircraft	770	4,610
Net cash used for investing activities	(125,321)	(127,069)
Financing Activities:
Proceeds from stock option exercises	4,429	1,335
Purchase of treasury stock	(9,126)	(5,713)
Excess tax benefit from stock-based compensation expense	2,946	1,420
Payments of debt	(73,435)	(21,712)
Net cash used for financing activities	(75,186)	(24,670)
Net decrease in cash and cash equivalents	(126,841)	(9,719)
Cash and cash equivalents at the beginning of period	588,852	613,740
Cash and cash equivalents at the end of period	$ 462,011	$ 604,021

XML



Financial Instruments (Tables)

3 Months Ended

Jun. 30, 2011

Long Term Investments And Financial Instruments Tables [Abstract]

Carrying Amount, Estimated Fair Value and Classification of Our Financial Instruments

			June 30, 2011
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
	Cash and cash equivalents	$	462,011	$	462,011	$	462,011	$	-	$	-
	Short-term investments		7,739		7,739		-		-		7,739
	Long-term investments and accrued interest		130,383		159,085		-		-		159,085
		$	600,133	$	628,835	$	462,011	$	-	$	166,824
Liabilities
	Interest rate derivatives	$	808	$	808	$	-	$	808	$	-
	1998 EETCs		137,156		153,310		-		-		153,310
	1999 EETCs		152,444		161,989		-		-		161,989
	2000 EETCs		56,865		62,707		-		-		62,707
	Term loans		69,761		69,634		-		-		69,634
		$	417,034	$	448,448	$	-	$	808	$	447,640

			December 31, 2010
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
	Cash and cash equivalents	$	588,852	$	588,852	$	588,852	$	-	$	-
	Short-term investments		6,211		6,211		-		-		6,211
	Long-term investments and accrued interest		127,094		157,787		-		-		157,787
		$	722,157	$	752,850	$	588,852	$	-	$	163,998
Liabilities
	1998 EETCs	$	145,012	$	164,379	$	-	$	-	$	164,379
	1999 EETCs		159,043		171,478		-		-		171,478
	2000 EETCs		58,485		65,230		-		-		65,230
	PDP financing facility		46,871		46,861		-		-		46,861
	Term loans		77,822		79,198		-		-		79,198
		$	487,233	$	527,146	$	-	$	-	$	527,146

Carrying Value, Gross Unrealized Gains and Fair Value of Our Long-term Investments by Contractual Maturity

			June 30, 2011						December 31, 2010
			Carrying Value		Gross Unrealized Gains		Fair Value		Carrying Value		Gross Unrealized Gains		Fair Value
Debt securities
Due after five but within ten years		$	130,383	$	28,702	$	159,085	$	73,356	$	18,363	$	91,719
Due after ten years			-		-		-		53,738		12,330		66,068
	Total	$	130,383	$	28,702	$	159,085	$	127,094	$	30,693	$	157,787

XML



Segment Reporting (Tables)

3 Months Ended

Jun. 30, 2011

Segment Reporting Tables [Abstract]

Schedule Of Segment Reporting Information By Segment Text Block

		For the Three Months Ended				For the Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Operating Revenue:
ACMI	$	160,442	$	126,829	$	306,477	$	239,232
AMC Charter		112,473		109,224		193,649		230,808
Commercial Charter		71,067		114,828		136,603		171,481
Dry Leasing		2,134		1,849		3,677		3,227
Other		3,458		3,451		6,775		6,665
Total Operating Revenue	$	349,574	$	356,181	$	647,181	$	651,413

Direct Contribution:
ACMI	$	36,795	$	30,894	$	59,066	$	52,288
AMC Charter		19,743		35,666		33,942		76,277
Commercial Charter		8,590		38,487		17,630		52,167
Dry Leasing		1,185		1,255		2,013		2,127
Total Direct Contribution for Reportable Segments		66,313		106,302		112,651		182,859
Add back (subtract):
Unallocated income and expenses		(27,116)		(46,764)		(56,887)		(70,652)
Gain on disposal of aircraft		181		2,158		301		3,380
Income before Income Taxes		39,378		61,696		56,065		115,587
Add back (subtract):
Interest income		(5,080)		(5,224)		(10,196)		(9,130)
Interest expense		9,912		10,150		20,208		20,220
Capitalized interest		(6,185)		(3,517)		(11,602)		(6,606)
Other (Income) Expense, net		(406)		213		(364)		(8,622)
Operating Income	$	37,619	$	63,318	$	54,111	$	111,449

XML



Consolidated Statements of Stockholders Equity (Parentheticals) In Thousands	3 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Consolidated Statements of Stockholders Equity
Purchase of shares of treasury stock	135,755	123,535
Exercise of employee stock options	105,173	50,849
Issuance of shares of restricted stock	376,424	196,795

XML



Labor and Legal Proceedings

3 Months Ended

Jun. 30, 2011

Labor And Legal Proceedings [Abstract]

Labor and Legal Proceedings

9. Labor and Legal Proceedings

Labor

The pilots, flight engineers and dispatchers of Atlas and Polar are represented by the International Brotherhood of Teamsters (the “IBT”). These employees represented approximately 53.7% of our workforce as of June 30, 2011. We are subject to risks of work interruption or stoppage as permitted by the Railway Labor Act of 1926 (the “Railway Labor Act”) and may incur additional administrative expenses associated with union representation of our employees.

The collective bargaining agreement for Atlas pilots and flight engineers became amendable in 2006. The collective bargaining agreement for Polar pilots and flight engineers became amendable in 2007. While both units have filed Railway Labor Act “Section 6” notices to begin negotiations for amended agreements, those negotiations have been placed on hold in favor of completing the merger of the two crew forces. In 2004, we initiated steps to merge the represented crewmember bargaining units of Atlas and Polar. The respective collective bargaining agreements provide for a seniority integration process and the negotiation of a single collective bargaining agreement (“SCBA”).  This seniority list integration process was completed in 2006.

We received the integrated seniority lists and the parties have concluded negotiations for a SCBA. In accordance with both the Atlas and Polar contracts, an arbitrator was assigned to resolve the few open contract issues that remained after we concluded negotiations. Those issues were submitted to the arbitrator in December 2010 for final and binding interest arbitration. We have continued to coordinate with the IBT to implement the SCBA upon receipt of the arbitrator's decision, which is expected during the second half of 2011.

In 2009, the IBT was certified as the collective bargaining representative of the dispatchers employed by Atlas and Polar. Formal negotiations began in 2009 between the IBT and us regarding the first collective bargaining agreement for these dispatchers. Other than the crewmembers and dispatchers, there are no other Atlas or Polar employees represented by a union.

Legal Proceedings

Department of Justice Investigation and Related Litigation

In 2010, Old Polar entered into a plea agreement with the United States Department of Justice (the "DOJ") relating to the previously disclosed DOJ investigation concerning alleged manipulation by cargo carriers of fuel surcharges and other rate components for air cargo services (the “DOJ Investigation”). Under the terms of the agreement, Old Polar will pay a fine of $17.4 million, payable in five annual installments, the first of which was made in November 2010. The fine relates to an alleged agreement by Old Polar with respect to fuel surcharges on cargo shipped from the United States to Australia during the time period from January 2000 through April 2003. The United States District Court for the District of Columbia held a hearing on the plea on November 15, 2010. The court accepted the plea and judgment was entered the following day, finalizing the plea agreement, in the amount of $17.4 million as agreed.

As a result of the DOJ Investigation, the Company and Old Polar have been named defendants, along with a number of other cargo carriers, in several class actions in the United States arising from allegations about the pricing practices of a number of air cargo carriers that have now been consolidated for pre-trial purposes in the United States District Court for the Eastern District of New York. The consolidated complaint alleges, among other things, that the defendants, including the Company and Old Polar, manipulated the market price for air cargo services sold domestically and abroad through the use of surcharges, in violation of United States, state, and European Union antitrust laws. The suit seeks treble damages and injunctive relief. The defendants moved to dismiss the consolidated complaint, and on September 26, 2008, the Magistrate Judge who heard the motion to dismiss issued a decision recommending that the Federal District Court Judge grant the defendants' motion to dismiss. The Magistrate Judge recommended that plaintiffs' claims based on the United States antitrust laws be dismissed without prejudice so that plaintiffs have an opportunity to cure the defects in their complaint by pleading more specific facts, if they have any, relevant to their federal claims. The Magistrate Judge recommended that the plaintiffs' claims based on state and European Union laws be dismissed with prejudice. Both plaintiffs and defendants objected to portions of the Magistrate Judge's Report and Recommendation. In 2009, the Federal District Court Judge issued an opinion and order, accepting the Magistrate Judge's Report and Recommendation, except for the Magistrate Judge's recommendation that the complaint be dismissed in its entirety, instead maintaining the claims under the United States antitrust laws on the grounds that the consolidated complaint was sufficiently detailed to withstand a motion to dismiss. Old Polar and the other defendants moved for reconsideration of that portion of the Federal District Court Judge's decisionwhich motion was denied on March 22, 2010. The plaintiffs moved to join Polar Air Cargo Worldwide, Inc. as a defendant in this case on February 10, 2011. The Federal District Court Judge granted the plaintiffs' motion on April 13, 2011. Pre-trial written and document discovery and depositions are ongoing. We are unable to predict the outcome of this litigation.

In 2007, the Company and Old Polar commenced an adversary proceeding in bankruptcy court against each of the plaintiffs in this class action litigation seeking to enjoin the plaintiffs from prosecuting claims against the Company and Old Polar that arose prior to 2004, the date on which the Company and Old Polar emerged from bankruptcy. In 2007, the plaintiffs consented to the injunctive relief requested and the bankruptcy court entered an order enjoining plaintiffs from prosecuting Company claims arising prior to 2004.

The Company, Old Polar and a number of other cargo carriers have also been named as defendants in civil class action suits in the provinces of British Columbia, Ontario and Quebec, Canada that are substantially similar to the class action suits in the United States. The plaintiffs in the British Columbia case have indicated they do not intend to pursue their lawsuit against the Company and Old Polar. We are unable to reasonably predict the outcome of the litigation in Ontario and Quebec.

If the Company or Old Polar were to incur an unfavorable outcome in connection with one or more of the matters described above, such outcome is not expected to materially affect our business, financial condition, results of operations, and/or cash flows.

Brazilian Customs Claim

Old Polar was cited for two alleged customs violations in Sao Paulo, Brazil, relating to shipments of goods dating back to 1999 and 2000. Each claim asserts that goods listed on the flight manifest of two separate Old Polar scheduled service flights were not on board the aircraft upon arrival and therefore were improperly brought into Brazil. The two claims, which also seek unpaid customs duties, taxes and penalties from the date of the alleged infraction, are approximately $12.5 million and $6.8 million, respectively, plus interest based on June 30, 2011exchange rates.

In both cases, we believe that the amounts claimed are substantially overstated due to a calculation error when considering the type and amount of goods allegedly missing, among other things. Furthermore, we may seek appropriate indemnity from the shipper in each claim as necessary. In the pending claim for $12.5 million, we received an administrative decision dismissing the claim in its entirety, which remains subject to a mandatory appeal by the Brazil customs authorities.

We are currently defending these and other Brazilian customs claims and the ultimate disposition of these claims, either individually or in the aggregate, is not expected to materially affect our financial condition, results of operations or cash flows.

Trademark Matters

Since 2005, we have been involved in ongoing litigation in Europe against Atlas Transport, an unrelated and unaffiliated entity, over the use of the name “Atlas”. Following application by us to register the mark “ATLAS AIR” in the European Union (“EU”), opposition from Atlas Transport and follow-up filings by us, the Office for Harmonization in the Internal Market (“OHIM”), which handles trademark matters in the EU, declared Atlas Transport's own trademark “ATLAS” partially invalid because of the prior existence of our Benelux trademark registration.  In 2008, OHIM's First Board of Appeal upheld the lower panel's decision, and Atlas Transport appealed that decision to the EU General Court (formally the Court of First Instance), which upheld the court's decision on May 18, 2011.

In 2007, Atlas Transport also filed a lawsuit in the Netherlands challenging the validity of our Benelux trademark. In 2009, following completion of its proceedings, the court issued a judgment in favor of us. Atlas Transport has appealed that decision to the Dutch Court of Appeal, but the judgment took effect immediately upon entry.

In 2009, Atlas Transport instituted a trademark infringement lawsuit against us in the regional court in Hamburg, Germany. The amended complaint alleges that Atlas Air has been unlawfully using Atlas Transport's trademark in Germany without permission and should be required to render information on the scope of use and pay compensation. In a supplementary motion, Atlas Transport asserts a cease and desist claim against Atlas Air, to be considered if the court denies the claim for compensation. On May 31, 2011, the court dismissed the case and Atlas Transport has filed an appeal.

We believe that the ultimate disposition of these claims, either individually or in the aggregate, will not materially affect our financial condition, results of operations or cash flows.

Other

We have certain other contingencies incident to the ordinary course of business. Management believes that the ultimate disposition of such other contingencies is not expected to materially affect our financial condition, results of operations or cash flows.

XML



Segment Reporting (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Operating Revenue
ACMI	$ 160,442	$ 126,829	$ 306,477	$ 239,232
AMC charter	112,473	109,224	193,649	230,808
Commercial charter	71,067	114,828	136,603	171,481
Dry leasing	2,134	1,849	3,677	3,227
Other	3,458	3,451	6,775	6,665
Total Operating Revenue	349,574	356,181	647,181	651,413
Direct Contribution
ACMI	36,795	30,894	59,066	52,288
AMC Charter	19,743	35,666	33,942	76,277
Commercial Charter	8,590	38,487	17,630	52,167
Dry Leasing	1,185	1,255	2,013	2,127
Total Direct Contribution for Reportable Segments	66,313	106,302	112,651	182,859
Unallocated Amount To Segment Income Expense	(27,116)	(46,764)	(56,887)	(70,652)
Gain on disposal of aircraft	181	2,158	301	3,380
Income before income taxes	39,378	61,696	56,065	115,587
Interest income	(5,080)	(5,224)	(10,196)	(9,130)
Interest expense	9,912	10,150	20,208	20,220
Capitalized interest	(6,185)	(3,517)	(11,602)	(6,606)
Other (Income) Expense, net	(406)	213	(364)	(8,622)
Operating Income	$ 37,619	$ 63,318	$ 54,111	$ 111,449

XML



DHL Investment and Polar (Tables)

3 Months Ended

Jun. 30, 2011

DHL Investment And Polar Tables [Abstract]

Related Party Disclosure for Polar

		For the Three Months Ended				For the Six Months Ended
Revenue and Expenses:			June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
	ACMI revenue from Polar	$	60,272	$	47,081	$	106,650	$	91,739
	Other revenue from Polar	$	2,837	$	2,837	$	5,675	$	5,675
	Ground handling and airport fees to Polar	$	312	$	667	$	559	$	1,115
Accounts receivable/payable as of:			June 30, 2011		December 31, 2010
	Receivables from Polar	$	3,509	$	8,009
	Payables to Polar	$	7,172	$	2,945

XML



Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Current Assets
Cash and cash equivalents	$ 462,011	$ 588,852
Short-term investments	7,739	6,211
Accounts receivable, net of allowance	83,423	78,334
Prepaid maintenance	33,271	26,102
Deferred taxes	3,721	3,721
Prepaid expenses and other current assets	28,430	24,212
Total current assets	618,595	727,432
Property and Equipment
Flight equipment	853,699	766,681
Ground equipment	31,308	29,124
Less: accumulated depreciation	(148,536)	(138,851)
Purchase deposits for flight equipment	369,266	336,969
Property and equipment, net	1,105,737	993,923
Other Assets
Long-term investments and accrued interest	130,383	127,094
Deposits and other assets	48,850	45,026
Intangible assets, net	42,364	42,627
Total Assets	1,945,929	1,936,102
Current Liabilities
Accounts payable	36,984	22,954
Accrued liabilities	168,462	149,892
Current portion of long-term debt	51,530	96,197
Total current liabilities	256,976	269,043
Other Liabilities
Long-term debt	364,696	391,036
Deferred taxes	106,681	103,150
Other liabilities	128,136	122,783
Total other liabilities	599,513	616,969
Commitments and contingencies	0	0
Stockholders Equity
Preferred stock	0	0
Common stock	274	270
Additional paid-in-capital	519,208	505,297
Treasury stock, at cost	(41,374)	(32,248)
Accumulated other comprehensive income	10	458
Retained earnings	607,030	572,666
Total stockholders equity	1,085,148	1,046,443
Noncontrolling interest	4,292	3,647
Total equity	1,089,440	1,050,090
Total Liabilities and Equity	$ 1,945,929	$ 1,936,102

XML



Labor and Legal Proceedings (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2011
Labor And Legal Proceedings [Abstract]
Union Work Force Percentage	53.70%
Old Polar DOJ Agreement	$ 17.4
Brazilian Claim One	12.5
Brazilian Claim Two	$ 6.8

XML



Earnings Per Share (Details) (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Denominator [Abstract]
Basic EPS weighted average shares outstanding	26,269	25,767	26,155	25,676
Effect of dilutive stock options and restricted stock	222	310	242	309
Diluted EPS weighted average shares outstanding	26,491	26,077	26,397	25,985
Earnings Per Share Tables [Abstract]
Restricted shares and units in which performance or market conditions were not satisfied	0.3	0.2	0.3	0.3
Earnings per share:
Basic	$ 0.91	$ 1.27	$ 1.31	$ 2.59
Diluted	$ 0.90	$ 1.25	$ 1.30	$ 2.56
Numerator [Abstract]
Net Income Attributable to Common Stockholders	$ 23,847	$ 32,661	$ 34,364	$ 66,446