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, 2008

OR

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

For the transition period from                      to                     

0-25732
(Commission File Number)

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 is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “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
(Do not check if a smaller reporting company) Smaller reporting company o

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ No o

APPLICABLE ONLY TO CORPORATE ISSUERS: As of June 30, 2008, there were 21,744,810 shares of the registrant’s Common Stock outstanding.

TABLE OF CONTENTS

			Page
PART I. FINANCIAL INFORMATION
	Item 1.	Condensed Consolidated Financial Statements
		Condensed Consolidated Balance Sheets at June 30, 2008 and December 31, 2007 (unaudited)		1
		Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2008 and 2007 (unaudited)		2
		Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2008 and 2007 (unaudited)		3
		Notes to Unaudited Condensed Consolidated Financial Statements		4
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		28
	Item 4.	Controls and Procedures		28
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings		30
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		30
	Item 4.	Submission of Matters to a Vote of Security Holders		30
	Item 6.	Exhibits		31
		Signatures		32
		Exhibit Index		33
EX-10.2: EMPLOYMENT AGREEMENT RONALD A. LANE
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Atlas Air Worldwide Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)

	June 30,			December 31,
	2008			2007
Assets
Current Assets
Cash and cash equivalents	$	367,538		$	477,309
Accounts receivable, net of allowance of $3,483 and $3,481, respectively		137,548			134,014
Prepaid maintenance		61,306			72,250
Deferred taxes		26,712			35,053
Prepaid expenses and other current assets		30,768			24,693
Total current assets		623,872			743,319
Property and equipment
Property and equipment, net		841,512			594,872
Other Assets
Deposits and other assets		39,050			41,038
Lease contracts and intangible assets, net		37,042			37,961
Total Assets	$	1,541,476		$	1,417,190
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	25,587		$	29,600
Accrued liabilities		161,078			163,831
Deferred gain		152,836			151,742
Current portion of long-term debt and capital leases		30,332			28,444
Total current liabilities		369,833			373,617
Other Liabilities
Long-term debt and capital leases		457,097			365,619
Deferred taxes		16,115			21,570
Other liabilities		97,871			93,682
Total other liabilities		571,083			480,871
Commitments and contingencies (Note 12)
Minority interest		9,802			13,477
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; 21,912,851 and 21,796,484 shares issued, 21,744,810 and 21,636,250 shares outstanding (net of treasury stock), at June 30, 2008 and December 31, 2007, respectively		219			218
Additional paid-in-capital		349,657			341,537
Receivable from issuance of subsidiary stock		(39,543	)		(77,065	)
Treasury stock, at cost; 168,041 and 160,234 shares, respectively		(7,018	)		(6,599	)
Accumulated other comprehensive income		1,860			1,750
Retained earnings		285,583			289,384
Total stockholders’ equity		590,758			549,225
Total Liabilities and Stockholders’ Equity	$	1,541,476		$	1,417,190

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

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Atlas Air Worldwide Holdings, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007
Operating Revenues	$	438,780		$	372,627		$	811,801		$	727,962
Operating Expenses
Aircraft fuel		207,031			122,123			351,522			234,434
Salaries, wages and benefits		52,845			61,438			111,748			123,188
Maintenance, materials and repairs		40,271			37,937			93,843			83,219
Aircraft rent		40,869			38,702			80,327			77,123
Ground handling and airport fees		19,096			18,385			37,622			35,706
Landing fees and other rent		20,213			18,288			38,930			36,018
Depreciation and amortization		12,817			10,062			21,183			19,637
Gain on disposal of aircraft		(2,726	)		(37	)		(2,726	)		(1,005	)
Travel		12,882			12,610			26,609			24,604
Minority interest		(239	)		—			(3,675	)		—
Other		22,169			21,883			45,466			46,312
Total operating expenses		425,228			341,391			800,849			679,236
Operating income		13,552			31,236			10,952			48,726
Non-operating Expenses
Interest income		(3,118	)		(3,838	)		(8,476	)		(7,259	)
Interest expense		11,709			11,274			23,092			22,522
Capitalized interest		(2,274	)		(1,121	)		(4,049	)		(1,963	)
Other (income) expense, net		607			(271	)		139			92
Total non-operating expenses		6,924			6,044			10,706			13,392
Income before income taxes		6,628			25,192			246			35,334
Income tax expense (benefit)		5,098			(17,993	)		4,047			(14,048	)
Net income (loss)	$	1,530		$	43,185		$	(3,801	)	$	49,382
Income (loss) per share:
Basic	$	0.07		$	2.04		$	(0.18	)	$	2.34
Diluted	$	0.07		$	2.01		$	(0.18	)	$	2.30
Weighted average shares:
Basic		21,506			21,175			21,465			21,110
Diluted		21,656			21,452			21,465			21,393

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

2

Atlas Air Worldwide Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

	Six Months Ended
	June 30, 2008			June 30, 2007
Cash Flows from Operating Activities:
Net income (loss)	$	(3,801	)	$	49,382
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		21,183			19,637
Accretion of debt discount		3,632			3,519
Amortization of operating lease discount		919			918
Provision for (release of) allowance for doubtful accounts		(502	)		555
Gain on disposal of aircraft		(2,726	)		(1,005	)
Deferred taxes		2,886			(25,607	)
Stock-based compensation expense		3,758			4,108
Minority interest		(3,675	)		—
Other, net		—			496
Changes in operating assets and liabilities		4,785			(8,030	)
Net cash provided by operating activities		26,459			43,973
Cash Flows from Investing Activities:
Capital expenditures		(274,424	)		(30,400	)
Proceeds from sale of aircraft		—			6,000
Insurance proceeds		5,900			—
Net cash used by investing activities		(268,524	)		(24,400	)
Cash Flows from Financing Activities:
Proceeds from loan		107,259			—
Proceeds from stock option exercises		3,162			4,050
Purchase of treasury stock		(419	)		(673	)
Excess tax benefits from share-based compensation expense		1,201			1,563
Proceeds from issuance of subsidiary stock		38,616			75,000
Payments on debt		(17,525	)		(18,842	)
Net cash provided by financing activities		132,294			61,098
Net increase (decrease) in cash and cash equivalents		(109,771	)		80,671
Cash and cash equivalents at the beginning of period		477,309			231,807
Cash and cash equivalents at the end of period	$	367,538		$	312,478

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

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Atlas Air Worldwide Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2008

1. Basis of Presentation

     The accompanying interim Condensed Consolidated Financial Statements (the “Financial Statements”) are unaudited and have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. As permitted by the rules and regulations of the Securities and Exchange Commission (the “SEC”), the Financial Statements exclude certain footnote disclosures normally included in audited consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, the Financial Statements contain all adjustments, consisting of normal recurring items, necessary to fairly state the financial position of Atlas Air Worldwide Holdings, Inc. (“Holdings” or “AAWW”) and its consolidated subsidiaries as of June 30, 2008, the results of operations for the three and six months ended June 30, 2008 and 2007, and cash flows for the six months ended June 30, 2008 and 2007. The Financial Statements include the accounts of Holdings and its consolidated subsidiaries. All inter-company accounts and transactions have been eliminated. The year end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the fiscal year ended December 31, 2007 included in the Annual Report on Form 10-K of Holdings that was filed with the SEC on February 28, 2008 (the “2007 10-K”).

     Holdings is the parent company of two principal operating subsidiaries, Atlas Air, Inc. (“Atlas”), which is wholly owned, and Polar Air Cargo Worldwide, Inc. (“Polar”), of which Holdings has a 51% economic interest and 75% voting interest. On June 28, 2007, Polar issued shares representing a 49% economic interest and a 25% voting interest to DHL Network Operations (USA), Inc. (“DHL”), a subsidiary of Deutsche Post AG (“DP”). Prior to that date, Polar was wholly owned by Holdings and was the parent company of Polar Air Cargo, Inc. (“Polar LLC”). Holdings, Atlas, Polar and Polar LLC are referred to collectively as the “Company”. The Company provides air cargo and related services throughout the world, serving Asia, the Middle East, Australia, Europe, South America, Africa and North America through: (i) contractual lease arrangements including contracts through which the Company leases an aircraft to a customer and provides value-added services including, crew, maintenance and insurance (“ACMI”); (ii) airport-to-airport scheduled air cargo service (“Scheduled Service”); (iii) military charter (“AMC Charter”); (iv) seasonal, commercial and ad-hoc charter services (“Commercial Charter”); and (v) dry leasing or sub-leasing of aircraft and engines (“Dry Leasing” or “Dry Lease”). The Company operates only Boeing 747 freighter aircraft.

     The Company’s quarterly results have in the past been 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. General

DHL

     In March 2008, Atlas entered into a three year ACMI agreement and related agreements with Polar for two Boeing 747-400 aircraft, beginning on March 21, 2008. Polar entered into an interim blocked space agreement (the “Interim BSA”) with DHL covering these two aircraft commencing on March 30, 2008 and expiring on October 27, 2008. In addition, on March 21, 2008, Polar and DHL amended and restated the original blocked space agreement entered into in June 2007 (the “Amended BSA”) to include these two additional aircraft as part of that agreement beginning on the expiration of the Interim BSA. See Note 3 of the 2007 10-K for discussion of the blocked space agreement. Under the Interim BSA, Polar began express network flying (“Express Network ACMI”) on March 30, 2008 and the direct contribution for such flying is included as part of the ACMI reporting segment (see Note 4 for further discussion).

Investments

     The Company holds a minority interest (49%) in a private company, which is accounted for under the equity method. The June 30, 2008 and December 31, 2007 aggregate carrying value of the investment was $5.8 million and $5.6 million, respectively, and was included within Deposits and other assets on the Condensed Consolidated Balance Sheets.

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     Atlas has Dry Leased three owned aircraft to this company. The leases have terms that mature in the third quarter of 2009. The carrying value of these leased aircraft as of June 30, 2008 and December 31, 2007 was $165.8 million and $168.1 million, respectively. The related accumulated depreciation as of June 30, 2008 and December 31, 2007 was $18.9 million and $16.5 million, respectively. The leases provide for payment of rent and a provision for maintenance costs associated with the aircraft. Total rental income for the three aircraft was $10.8 million and $11.4 million for the three months ended June 30, 2008 and 2007, respectively, and $21.6 million and $22.8 million for the six months ended June 30, 2008 and 2007, respectively.

Property and equipment, net

     Property and equipment, net consisted of the following at:

	June 30,			December 31,
	2008			2007
Flight equipment	$	682,929		$	583,468
Ground equipment		24,057			23,040
Purchase deposits for flight equipment		232,230			75,026
Less: accumulated depreciation		(97,704	)		(86,662	)
Property and equipment, net	$	841,512		$	594,872

     At June 30, 2008 and December 31, 2007, included in purchase deposits for flight equipment is capitalized interest of $9.2 million and $5.2 million, respectively.

     On January 11, 2008, AAWW entered into an aircraft purchase agreement under which AAWW or its designee agreed to acquire two Boeing 747-400 aircraft. The acquisition of such aircraft was completed on May 6, 2008. The aircraft include one production Boeing 747-400 freighter, which entered service on June 12, 2008, and one passenger configured Boeing 747-400 aircraft that will be converted to freighter configuration and is expected to enter service in the third quarter of 2008. The purchase price for these aircraft was approximately $167.5 million, which includes conversion costs, of which $152.3 million has been paid. The remaining $15.2 million will be paid upon completion of the freighter conversion.

     In February 2008, one of the Company’s Boeing 747-200 aircraft (tail number N527MC) on a short-term ACMI lease to a customer was damaged due to improper shipper packaging of a load which damaged the hull. The plane landed safely but as a result of this incident the airframe was damaged beyond economic repair. Atlas negotiated a net $5.9 million cash-in-lieu-of-repair settlement with its insurance carriers and received the insurance proceeds in June 2008. The Company removed the engines and other certain high value rotable parts, which were transferred into rotable inventory. The remainder of the airframe is being sold for scrap metal. Since the settlement proceeds exceeded the net book value of the airframe after salvaging certain rotable parts, the Company recorded a gain of $2.7 million in the second quarter of 2008.

     In March 2007, the Company sold aircraft tail number N536MC for $6.0 million and recorded a gain of approximately $1.0 million.

Concentration of Credit Risk and Significant Customers

     United States Military Airlift Mobility Command (“AMC”) charters accounted for 25.5% and 25.6% of the Company’s total revenues for the three months ended June 30, 2008 and 2007, respectively, and 25.3% and 29.1% for the six months ended June 30, 2008 and 2007, respectively. Accounts receivable from AMC were $19.6 million and $32.2 million at June 30, 2008 and December 31, 2007, respectively. The International Airline of United Arab Emirates (“Emirates”) accounted for 14.1% and 11.7% of the Company’s total revenues for the three months ended June 30, 2008 and 2007, respectively, and 7.6% and 11.5% for the six months ended June 30, 2008 and 2007, respectively. Emirates accounted for 38.9% and 47.6% of the Company’s ACMI revenues for the three months ended June 30, 2008 and 2007, respectively, and 40.1% and 47.7% for the six months ended June 30, 2008 and 2007, respectively. Accounts receivable from Emirates were $8.5 million and $13.4 million at June 30, 2008 and December 31, 2007, respectively. No other customer accounted for 10% or more of the Company’s total operating revenues or accounts receivable during these periods.

Debt Discount

5

     At June 30, 2008 and December 31, 2007, the Company had $71.8 million and $75.4 million, respectively, of unamortized discount related to fair market value adjustments recorded against debt upon application of fresh-start accounting.

Recent Accounting Pronouncements

     In September 2006, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards No. 157 Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 establishes a common definition for fair value to be applied to U.S. GAAP requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. SFAS No. 157 is effective for financial assets and financial liabilities for fiscal years beginning after November 15, 2007. Issued in February 2008, FASB Staff Position (“FSP”) 157-1 “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” (“FSP 157-1”) removed leasing transactions accounted for under Statement 13 and related guidance from the scope of SFAS No. 157. FSP 157-2 “Partial Deferral of the Effective Date of Statement 157” (“FSP 157-2”), deferred the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities to fiscal years beginning after November 15, 2008.

     The implementation of SFAS No. 157 for financial assets and financial liabilities, effective January 1, 2008, did not have a material impact on the Company’s consolidated financial position and results of operations. The Company is currently assessing the impact of SFAS No. 157 for non-financial assets and non-financial liabilities on its consolidated financial position and results of operations.

     SFAS No. 157 defines fair value as 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). SFAS No. 157 classifies the inputs used to measure fair value into the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or
	Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
	Inputs other than quoted prices that are observable for the asset or liability
Level 3	Unobservable inputs for the asset or liability

     The Company endeavors to utilize the best available information in measuring fair value.

     As of June 30, 2008, the Company did not have any financial assets or liabilities that were impacted by SFAS No. 157.

     In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115, (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The implementation of this standard did not have a material impact on the Company’s consolidated financial position and results of operations.

     In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements” (“SFAS No. 160”). SFAS No. 160 establishes requirements for ownership interests in subsidiaries held by parties other than the Company (sometimes called “minority interests”) be clearly identified, presented, and disclosed in the consolidated statement of financial position within equity, but separate from the parent’s equity. All changes in the parent’s ownership interests are required to be accounted for consistently as equity transactions and any non-controlling equity investments in unconsolidated subsidiaries must be measured initially at fair value. SFAS No. 160 is effective, on a prospective basis, for fiscal years beginning after December 15, 2008. However, presentation and disclosure requirements must be retrospectively applied to comparative financial statements. The Company is currently assessing the impact of SFAS No. 160 on its consolidated financial position and results of operations.

6

     In March 2008, the FASB issued SFAS No. 161, “Disclosures About Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“SFAS No. 161”). SFAS No. 161 expands quarterly disclosure requirements in SFAS No. 133 about an entity’s derivative instruments and hedging activities. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008. The Company is currently assessing the impact of SFAS No. 161 on its consolidated financial position and results of operations.

Reclassifications

     Certain reclassifications have been made in the prior period’s Condensed Consolidated Financial Statement amounts and related note disclosures to conform to the current period’s presentation, primarily related to the classification of segments and commission income.

3. Notes Payable

     On January 30, 2008, Atlas entered into a $270.3 million pre-delivery deposit payment (“PDP”) financing facility with Norddeutsche Landesbank Girozentrale (the “PDP Financing Facility”), which is intended to fund a portion of Atlas’ PDP obligations in respect of the first five aircraft to be delivered to Atlas under its Boeing 747-8F purchase agreement with The Boeing Company (“Boeing”). These aircraft are scheduled for delivery between February and July 2010.

     The facility is comprised of five separate tranches and is secured by certain of Atlas’ rights in and to the purchase agreement, but only to the extent related to the first five aircraft scheduled to be delivered thereunder. In the case of a continuing event of default by Atlas, the lenders will have certain rights to assume Atlas’ position and accept delivery of the related aircraft. Each tranche relating to each aircraft will become due on the earlier of (a) the date the aircraft is delivered or (b) up to nine months following the last day of the scheduled delivery month, depending on the cause of the delivery delay.

     Funds available under the facility are subject to certain up-front and commitment fees, and funds drawn under the facility bear interest at Libor plus a margin. The facility is guaranteed by AAWW and is subject to typical and customary events of default. As of June 30, 2008, the Company had borrowed $107.3 million under the facility and has unused availability of $163.0 million.

4. Segment Reporting

     The Company has five reportable segments: ACMI, Scheduled Service, AMC Charter, Commercial Charter and Dry Leasing. Each segment has different operating and economic characteristics which are separately reviewed by the Company’s senior management.

     The Company is pursuing growth in its Dry Leasing business. The increasing importance of this business has led senior management to classify Dry Leasing as a separate reportable segment and in the first quarter of 2008, the Company formed a wholly owned subsidiary, based in Ireland, for the purpose of Dry Leasing aircraft and engines. The Company currently Dry Leases three Boeing 747-400s to an affiliate in which the Company owns a minority (49%) interest. These aircraft are currently in the service of British Airways. In addition, the Company currently has one Boeing 747-200 aircraft Dry Leased to a cargo operator. Previously, the Company included Dry Lease revenue with Other Revenue and did not report the segment results separately.

     In addition to reporting the Dry Lease segment separately, in the first quarter of 2008 the Company changed the principal economic performance metric it reports for each of its business segments. Previously, the Company used Fully Allocated Contribution (“FAC”) as its economic performance metric. FAC was computed by allocating all operating and non-operating costs to segments, and only taxes, post-emergence costs and related professional fees, gains on the sale of aircraft, and other unusual items were not allocated to segments. As part of the change, Management has adopted an economic performance metric that shows profitability of each segment after allocation of direct costs and ownership (“Direct Contribution”). Management believes that Direct Contribution is a better measurement of segment profitability. Direct costs and ownership include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense related to aircraft debt and aircraft depreciation. Direct Contribution shows each segment’s contribution to corporate fixed costs. Although corporate fixed costs are not allocated to each segment, the total corporate fixed costs are disclosed. Direct Contribution consists of income (loss) before taxes, excluding post-emergence costs and related professional fees, gains on the sale of aircraft, and unallocated fixed costs. Unallocated

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fixed costs include corporate overhead, non-aircraft depreciation, interest income, foreign exchange gains and losses and other non-operating costs.

     Management allocates the direct costs of aircraft operation and ownership among the various segments based on the aircraft type and activity levels in each segment. Allocation methods are standard activity-based methods commonly used in the industry.

     The ACMI segment provides aircraft, crew, maintenance and insurance services, whereby customers receive the use of an insured and maintained aircraft and crew in exchange for, in most cases, a guaranteed monthly level of operation at a predetermined rate for defined periods of time. The customer bears the commercial revenue risk and the obligation for other direct operating costs, including fuel. Beginning on March 30, 2008, Polar began Express Network ACMI flying with two aircraft for DHL. Under the terms of the Interim BSA, DHL is responsible for the commercial revenue risk (yields and cargo loads) and bears all of the direct costs of operation, including fuel, for these two aircraft. For segment reporting purposes all revenue derived from ACMI and related services provided to Polar for Express Network ACMI operations have been reclassified from Scheduled Service to the ACMI segment (see table below for reconciliation of revenue per the Financial Statements to revenue by segment). All costs associated with providing such services have also been reclassified for purposes of calculating Direct Contribution. Non-ACMI costs and an equal amount of revenue remain in the Scheduled Service segment.

     The Scheduled Service segment provides airport-to-airport scheduled air freight and available on-forwarding services primarily to freight forwarding customers. The Company carries all of the commercial revenue risk (yields and cargo loads) and bears all of the direct costs of operation, including fuel. Distribution costs include direct sales costs through the Company’s own sales force and through commissions paid to general sales agents. Commission rates typically range between 2.5% and 5% of commissionable revenue sold. Scheduled Service is highly seasonal, with peak demand coinciding with the retail holiday season, which traditionally begins in September and lasts through mid-December.

     The AMC Charter segment provides full-planeload charter flights to the U.S. Military through the AMC. The AMC Charter business is similar to the Commercial Charter business in that the Company is responsible for the direct operating costs of the aircraft. However, in the case of AMC operations, the price of fuel consumed during AMC flights is fixed by the military. The contracted charter rates (per mile) and fuel prices (per gallon) are established and fixed by the AMC for twelve-month periods running from October to September of the next year. The Company receives reimbursement from the AMC each month if the price of fuel paid by the Company to vendors for AMC missions exceeds the fixed price; if the price of fuel paid by the Company is less than the fixed price, then the Company pays the difference to the AMC.

     The Commercial Charter segment provides full-planeload airfreight capacity on one or multiple flights to freight forwarders, airlines and other air cargo customers. Charters are typically paid in advance and as with Scheduled Service, the Company bears the direct operating costs (except as otherwise defined in the charter contracts).

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

     The following table sets forth revenues and Direct Contribution for the Company’s five reportable business segments reconciled to operating income (loss) and income (loss) before income taxes as required by SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, for the stated periods:

	June 30, 2008							June 30, 2007
			Express							Express
	Revenue per		Network					Revenue per		Network
	Financial		ACMI			Segment		Financial		ACMI		Segment
For the Three Months Ended	Statements		Revenue			Revenue		Statements		Revenue		Revenue
Revenues:
ACMI	$	76,247	$	15,834		$	92,081	$	91,252	$	—	$	91,252
Scheduled Service		213,423		(15,834	)		197,589		144,245		—		144,245
AMC Charter		111,756		—			111,756		95,471		—		95,471
Commercial Charter		24,370		—			24,370		28,634		—		28,634
Dry Leasing		12,984		—			12,984		13,025		—		13,025
Total operating revenues	$	438,780	$	—		$	438,780	$	372,627	$	—	$	372,627

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	June 30, 2008							June 30, 2007
			Express								Express
	Revenue per		Network						Revenue per		Network
	Financial		ACMI			Segment			Financial		ACMI		Segment
For the Six Months Ended	Statements		Revenue			Revenue			Statements		Revenue		Revenue
Revenues:
ACMI	$	154,222	$	15,934		$	170,156		$	175,539	$	—	$	175,539
Scheduled Service		372,897		(15,934	)		356,963			270,118		—		270,118
AMC Charter		205,740		—			205,740			211,963		—		211,963
Commercial Charter		52,864		—			52,864			44,329		—		44,329
Dry Leasing		26,078		—			26,078			26,013		—		26,013
Total operating revenues	$	811,801	$	—		$	811,801		$	727,962	$	—	$	727,962

	For the Three Months Ended						For the Six Months Ended
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007
Direct Contribution:
ACMI	$	18,547		$	20,918		$	23,758		$	32,973
Scheduled Service		(19,965	)		237			(29,515	)		899
AMC Charter		28,469			24,559			51,935			46,302
Commercial Charter		(1,788	)		2,796			(3,586	)		2,261
Dry Leasing		2,702			4,495			7,207			9,015
Total Direct Contribution for reportable segments		27,965			53,005			49,799			91,450
Add back (subtract):
Unallocated fixed costs		(24,063	)		(27,850	)		(52,279	)		(57,121	)
Gain on sale of aircraft		2,726			37			2,726			1,005
Income (loss) before income taxes		6,628			25,192			246			35,334
Add back (subtract):
Interest income		(3,118	)		(3,838	)		(8,476	)		(7,259	)
Interest expense		11,709			11,274			23,092			22,522
Capitalized interest		(2,274	)		(1,121	)		(4,049	)		(1,963	)
Other, net		607			(271	)		139			92
Operating income	$	13,552		$	31,236		$	10,952		$	48,726

5. Commitments and Contingencies

     On September 8, 2006, Atlas and Boeing entered into a purchase agreement (the “Boeing Agreement”) providing for the purchase by Atlas of 12 Boeing 747-8F freighter aircraft. The Boeing Agreement provides for deliveries of the aircraft to begin in 2010, with all 12 aircraft expected to be in service by the end of 2011. In addition, the Boeing Agreement provides Atlas with rights to purchase up to an additional 14 Boeing 747-8F aircraft, of which one is being held under option. Committed expenditures under the Boeing Agreement, including agreements for spare engines and related flight equipment and also including estimated amounts for contractual price escalations, pre-delivery deposits and required option payments, will be $156.4 million for the remainder of 2008, $185.3 million in 2009, $983.4 million in 2010 and $686.6 million in 2011.

Guarantees and Indemnifications

Restricted Deposits and Letters of Credit

     At June 30, 2008 and December 31, 2007, the Company had $7.1 million and $8.5 million, respectively, of restricted deposits either pledged under standby letters of credit related to collateral or for certain deposits required in the normal course of business for items, including, but not limited to, foreign exchange trades, airfield privileges, judicial and credit card deposits and insurance. These amounts are included in Deposits and other assets in the Condensed Consolidated Balance Sheets.

Labor

     The Air Line Pilots Association (“ALPA”) represents all of the Company’s U.S. crewmembers employed at both Atlas and Polar. Additionally, the Company employs 46 crewmembers through its branch office in Stansted, England who are not represented by a union. Collectively, these employees represent approximately 49.5% of the Company’s workforce as of June 30, 2008. The Company is 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 its employees.

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     The Atlas collective bargaining agreement became amendable in February 2006. Polar’s collective bargaining agreement with ALPA became amendable in April 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 as more fully described below.

     In November 2004, in order to increase efficiency and assist in controlling costs, the Company initiated steps to merge the ALPA represented crewmember bargaining units of Atlas and Polar. The processes for completing this merger are set forth in both the Atlas and Polar collective bargaining agreements. Both agreements provide for a seniority integration process and the negotiation of a single collective bargaining agreement (“SCBA”). This seniority list integration process was completed by ALPA on November 21, 2006.

     On July 11, 2007, the Company filed grievances under both the Atlas and Polar collective bargaining agreements to compel the commencement of SCBA negotiations. In response, ALPA, on behalf of the Atlas crew force, conceded the Company’s grievance. They also executed a Merger Protocol Letter of Agreement. However, ALPA, on behalf of the Polar crew force, rejected the Company’s grievance and disputed whether it could be required to combine SCBA negotiations and whether the dispute could be scheduled for immediate arbitration. Initial hearings regarding the merits of the Company’s grievance were conducted on March 25 through March 27, 2008. Additional hearing dates had been scheduled for July 15 through July 19, 2008. However, by letter dated May 23, 2008 ALPA presented the integrated seniority lists to the Company and directed the Atlas and Polar Master Executive Councils (“MEC”) to begin the required negotiations for the SCBA. As a result, the Company withdrew its grievance, without prejudice.

     In accordance with the provisions of both the Atlas and Polar contracts, the parties are first to engage in direct negotiations for a SCBA. If nine months after ALPA has presented the integrated seniority lists to the Company any open contract issues remain, those issues are to be resolved by final and binding interest arbitration. Currently, the Company anticipates the SCBA direct negotiations and any required interest arbitration to be completed by the third quarter of 2009 at which time the SCBA and integrated seniority lists will be implemented.

     By letter dated June 16, 2008, the Company was advised by the National Mediation Board (“NMB”) that the International Brotherhood of Teamsters (“IBT”) had filed a petition to replace ALPA as the representative of the crewmembers of both Atlas and Polar. As part of its petition the IBT has also asserted that Atlas and Polar constitute a “single carrier” for representation purposes under the Railway Labor Act. The NMB is currently conducting its required investigation into this matter. If the NMB determines that Atlas and Polar constitute a single carrier for representation purposes and that the IBT has submitted the requisite showing of interest, it will conduct a representation election to determine whether ALPA or the IBT will represent the Company’s Atlas and Polar crewmembers. If the NMB determines that Atlas and Polar do not constitute a single carrier for representation purposes but that the IBT has submitted the requisite showing of interest to represent the Company’s Atlas crewmembers, it will conduct an election to determine whether ALPA or the IBT will represent just the Company’s Atlas crewmembers. A change in the certified representative of the Company’s crewmembers is not anticipated to affect the underlying collective bargaining agreements. Additionally, a change in the certified representative of either or both the Company’s Atlas and Polar crewmembers will not affect the completion of the pending merger. The Company anticipates this matter will be resolved in the fourth quarter of 2008.

Legal Proceedings

     Except for the updated items below, information with respect to legal proceedings appears in Note 12 of the 2007 10-K.

Department of Justice Investigation and Related Litigation

     In February 2006, the United States Department of Justice (the “DOJ”) initiated an investigation into the pricing practices of a number of cargo carriers, including Polar LLC (the “DOJ Investigation”). In connection with this investigation, Polar LLC received a subpoena dated February 14, 2006 requesting discovery of additional relevant documents. The Company is fully cooperating with the DOJ in its investigation. Although the Company continues to engage in discussions with the DOJ, there has been no formal action against the Company by the DOJ concerning the matters that are the subject of the DOJ Investigation.

Australian Competition and Consumer Commission Inquiry

     The Australian Competition and Consumer Commission (the “ACCC”) notified Polar LLC by letter dated June 28, 2007 that it would be required to furnish information and to produce documents to the ACCC in connection with matters that may constitute violations of certain provisions of the Australian Trade Practices Act. Polar LLC has submitted

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information and documentation to the ACCC as required by this initial request. Polar LLC has submitted additional documentation to the ACCC in response to additional requests for information received from the ACCC.

New Zealand Commerce Commission Inquiry

     The New Zealand Commerce Commission (the “Commission”) notified Polar LLC by letter dated November 8, 2007 that it would be required to provide information and to produce documents to the Commission in connection with matters that may constitute violations of certain provisions of the New Zealand Commerce Act 1986. Polar LLC has submitted information and documentation to the Commission as required by this request.

Swiss Competition Commission Inquiry

     By letter dated March 11, 2008, the Swiss Competition Commission (the “Swiss Commission”) notified Polar LLC that it would be required to provide information and to produce documents in connection with the Commission’s investigation into the levy of fuel and other surcharges by certain cargo carriers on flights into and out of Switzerland. The Swiss Commission is assessing the impact of these surcharges on pricing and competition within the air freight market in Switzerland. Polar LLC has submitted information and documentation to the Swiss Commission as required by this request.

6. Income (Loss) Per Share and Number of Common Shares Outstanding

     Basic income (loss) per share represents the income (loss) divided by the weighted average number of common shares outstanding during the measurement period. Diluted income (loss) per share represents the income (loss) 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. Potentially dilutive common securities that would be added to basic shares to arrive at weighted-average diluted shares consist of 0.1 million stock options and shares of restricted stock for the six months ended June 30, 2008. The impact of these options and restricted shares would be anti-dilutive for the six months ended June 30, 2008 due to losses incurred and are not included in the diluted loss per share calculation. Anti-dilutive options that are out of the money for the three and six months ended June 30, 2008 and 2007 were de minimis.

     The calculation of basic and diluted income per share for the three and six months ended June 30 is as follows:

	For the Three Months Ended				For the Six Months Ended
	June 30, 2008		June 30, 2007		June 30, 2008			June 30, 2007
Numerator:
Net income (loss)	$	1,530	$	43,185	$	(3,801	)	$	49,382
Denominator for basic earnings per share:		21,506		21,175		21,465			21,110
Effect of dilutive securities:
Stock options		109		189		—	(a)		191
Restricted stock		41		88		—	(a)		92
Denominator for diluted earnings per share:		21,656		21,452		21,465			21,393
Basic income per share	$	0.07	$	2.04	$	(0.18	)	$	2.34
Diluted income per share	$	0.07	$	2.01	$	(0.18	)	$	2.31

(a) Anti-dilutive.

     The calculation of diluted shares is calculated per SFAS No. 128, Earnings per Share, and reflects the potential dilution that could occur from stock options and restricted shares using the treasury stock method and does not include restricted shares and units in which performance or market conditions have not been satisfied of 0.3 million for the three and six months ended June 30, 2008 and 0.2 million for the three and six months ended June 30, 2007.

7. Taxes

     The Company’s effective tax rate consists of an expense of 76.9% and a benefit of 71.4% for the second quarter of 2008 and 2007, respectively. The effective rate differs from the statutory rate primarily due to losses incurred by Polar during the second quarter of 2008 for which no tax benefit was recorded, the recognition of a deferred tax asset related to the Company’s investment in Polar during the second quarter of 2007, the non-deductibility of certain items for tax purposes and the relationship of these items to the Company’s projected operating results for the year. Polar did not record income tax benefits related to its losses in the first and second quarters of 2008 because Polar has no prior period income to

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apply against these losses, and, therefore, the losses may only offset future income. Until Polar generates future income, no tax benefit will be recorded.

     The Company maintains a reserve for unrecognized income tax benefits consistent with the requirements of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (“FIN 48”). The Company’s FIN 48 reserve balance did not change from December 31, 2007 except for a de minimis amount of interest expense related to this reserve during the first and second quarters of 2008. The Company will maintain this reserve until its uncertain positions are reviewed and resolved or until the expiration of the applicable statute of limitations, if earlier.

     During the second quarter of 2008, the Internal Revenue Service commenced an income tax examination related to the Company’s consolidated federal income tax returns for 2005 and 2006. The Service has not proposed any assessment of additional income taxes for those years. In Hong Kong, the years 2001 through 2005 are under examination for Atlas, and the years 2003 through 2005 are under examination for Polar Air Cargo, Inc. The tax authorities in Hong Kong have not proposed any assessment of additional income taxes.

     For federal income tax purposes, 2007 remains subject to examination. Certain tax attributes, reflected on the Company’s federal income tax returns as filed including NOLs, differ significantly from those reflected in the Financial Statements. Such attributes are subject to future audit in the event the IRS determines to examine any open tax years.

     In the second quarter, the Company resolved an employment tax examination with the Internal Revenue Service and released tax reserves and accrued interest totaling $4.5 million for 2004 and 2005, which is shown as a reduction in Operating expenses on the Statement of Operations. The Internal Revenue Service is not conducting an employment tax examination for any other years.

8. Comprehensive Income (Loss)

     Comprehensive income (loss) included changes in the fair value of certain financial derivative instruments, which qualify for hedge accounting, and unrealized gains and losses on certain investments. For the three and six months ended June 30, 2008, the Company did not have any derivative instruments. The differences between net income (loss) and comprehensive income (loss) for the three and six months ended June 30 are as follows:

	For the Three Months Ended						For the Six Months Ended
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007
Net income (loss)	$	1,530		$	43,185		$	(3,801	)	$	49,382
Unrealized gain (loss) on derivative instruments, net of taxes of $324 and $1,672		—			(551	)		—			1,744
Other		(36	)		163			110			419
Total other comprehensive income (loss)		(36	)		(388	)		110			2,163
Comprehensive income (loss)	$	1,494		$	42,797		$	(3,691	)	$	51,545

     A roll-forward of the amounts included in Accumulated other comprehensive income, net of taxes, is shown below:

	Accumulated Other
	Comprehensive
	Income
Balance at December 31, 2007	$	1,750
Change in value during period,		146
Balance at March 31, 2008		1,896
Change in value during period,		(36	)
Balance at June 30, 2008	$	1,860

     Other is primarily composed of unrealized gains and losses on foreign currency translation.

9. Subsequent Events

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     On July 3, 2008, Atlas entered into a $58.4 million five year term loan agreement with BNP Paribas and DVB Bank AG, secured by aircraft tail number N419, which was acquired on May 6, 2008 (see Note 2 for further discussion).

     Atlas also received a commitment from the same banks for a $41.6 million five year term loan to be secured by aircraft tail number N429, also acquired on May 6, 2008. That loan is expected to close in the third quarter of 2008, when the conversion of the aircraft from passenger to freighter is completed.

     Funds available under the loan agreements are subject to certain up-front and commitment fees, and funds drawn under the loan agreements will bear interest at Libor, plus a margin. The facility is guaranteed by AAWW and is subject to typical and customary events of default.

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     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 and notes thereto appearing in this report and our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2007 included in our 2007 10-K.

     In this report, references to “we,” “our” and “us” are references to AAWW and its subsidiaries, as applicable.

Background

Certain Terms — Glossary

     The following terms represent industry-related items and statistics specific to the airline and cargo industry sectors. They are used by management for statistical analysis purposes to better evaluate and measure operating levels, results, productivity and efficiency.

ATM	Available Ton Miles, which represent the maximum available tons (capacity) per actual miles flown. It is calculated by multiplying the available capacity (tonnage) of the aircraft by the miles flown by the aircraft.
Block Hours	The time interval between when an aircraft departs the terminal until it arrives at the destination terminal.
RATM	Revenue per ATM, which represents the average revenue received per available ton mile flown. It is calculated by dividing operating revenues by ATMs.
Revenue Per Block Hour	Calculated by dividing operating revenues by Block Hours.
RTM	Revenue Ton Mile, which is calculated by multiplying actual revenue tons carried by miles flown.
Load Factor	The average amount of weight flown divided by the maximum available capacity. It is calculated by dividing RTMs by ATMs.
Yield	The average amount a customer pays to fly one ton of cargo one mile. It is calculated by dividing operating revenues by RTMs.
A Checks	Low level maintenance checks performed on aircraft at an interval of approximately 400 to 1,100 flight hours.
C Checks	High level or “heavy” airframe maintenance checks, which are more intensive in scope than an A Checks and are generally performed on 18 to 24 month intervals.
D Checks	High level or “heavy” airframe maintenance checks, which are the most extensive in scope and are generally performed on an interval of six to ten years or 25,000 to 28,000 flight hours, whichever comes first for Boeing 747-200s and six years for Boeing 747-400s.
Direct Contribution	Direct Contribution consists of income (loss) before taxes, excluding post-emergence costs and related professional fees, gains on the sale of aircraft, and unallocated fixed costs. We evaluate performance and allocate resources to our segments based upon this measure.

Business Strategy

     We are the leading provider of aircraft and outsourced aircraft operating solutions to the global air freight industry. We manage and operate the world’s largest fleet of 747 freighters. We provide a unique and compelling value proposition to our customers by giving them access to new production freighters that deliver the highest reliability and lowest unit cost in the marketplace combined with outsourced aircraft operating services that lead the industry in terms of quality and global scale. Our customers include airlines, freight forwarders, the U.S. military and charter brokers. We provide global services with operations in Asia, the Middle-East, Australia, Europe, South America, Africa and North America.

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     We believe that demand for high-efficiency, wide-body freighter aircraft and related outsourced aircraft operating solutions will increase due to growing international trade, in particular growth in developing markets in Asia and South America. According to industry studies, global cargo traffic, measured in revenue tonne-kilometers, is expected to triple over the next two decades. As demand continues to increase, we believe that the supply of suitable freighter aircraft will not keep pace with this increase in demand as a result of limited production capacity, limited passenger-to-freight conversion capacity and the anticipated retirement of aging aircraft currently operating in the world fleet.

     As of June 30, 2008, our existing fleet of 38 wide-body, freighter aircraft, including 22 modern, high-efficiency, Boeing 747-400 aircraft, and our complementary operating solutions, uniquely position us to benefit from the forecasted growth and increasing demand for wide-body freighter airplanes in the global air freight market. Our market position is further enhanced by our order of 12 new state-of-the-art Boeing 747-8F aircraft, scheduled to be delivered in 2010 and 2011. We are the only current provider of these aircraft to the outsourced freighter market. In addition to these 12 aircraft, we also hold rights to purchase up to an additional 14 Boeing 747-8F aircraft, providing us with flexibility to expand our fleet in response to market conditions.

     We believe that the scale, scope and quality of our outsourced services are unparalleled in our industry. The relative operating cost efficiency of our current 747-400F aircraft and future 747-8F aircraft compared with other wide body freighter aircraft, including their superior fuel efficiency, create a compelling value proposition for our customers and position us well for growth in both the wet and Dry Lease areas of our business.

     Our primary services are:

• Freighter aircraft leasing services, which encompasses the following:

• Fully outsourced aircraft operating solutions of aircraft, crew, maintenance and insurance known as wet leasing or ACMI. An ACMI lease is a contract for the use of one or more dedicated aircraft together with complementary operating services. We typically contract these services for three to six year periods on Boeing 747-400s and for shorter periods on Boeing 747-200s. Our outsourced operating solutions include crew, maintenance and insurance for the aircraft, while customers assume fuel, yield and demand risk;

• Express Network ACMI, where Polar provides outsourced airport-to-airport wide-body cargo aircraft solutions to DHL. AAWW currently operates two aircraft, and will operate a minimum of six additional dedicated Boeing 747-400 aircraft servicing the requirements of DHL’s trans-Pacific express operations. Polar will also continue to provide scheduled air-cargo service on these aircraft to our Scheduled Service air-cargo freight forwarders and other shipping customers;

• Aircraft and engine leasing solutions known as Dry Leasing. Dry Leasing usually involves the leasing of aircraft to customers who are responsible for crew, maintenance and insurance and who assume fuel, yield and demand risk. We typically Dry Lease to third parties for one or more dedicated aircraft for three-to-five year periods. In February 2008, Holdings formed a wholly owned subsidiary based in Ireland, to further its Dry Leasing efforts.

• Charter services, which encompasses the following:

• AMC Charter services, where we provide air cargo services for the Air Mobility Command, or the AMC;

• Commercial Charters, where we provide all-inclusive cargo aircraft charters to brokers, freight forwarders, direct shippers and airlines.

     We look to achieve our strategy through:

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

• Accelerating fleet growth and expanding our leasing business;

• Focusing on securing long-term contracts;

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• Driving significant and ongoing efficiencies and productivity improvements;

• Selectively pursuing and evaluating future acquisitions and alliances.

     See “Business Overview” and “Business Strategy and Outlook” in the 2007 10-K for additional information.

Results of Operations

Three Months Ended June 30, 2008 and 2007

     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.

Operating Statistics

     The table below sets forth selected operating data for the three months ended June 30:

							Increase /			Percent
	2008			2007			(Decrease)			Change
Block Hours
ACMI		12,587			15,283			(2,696	)		(17.6	%)
Scheduled Service		12,073			10,164			1,909			18.8	%
AMC Charter		5,249			5,459			(210	)		(3.8	%)
Commercial Charter		1,246			1,837			(591	)		(32.2	%)
Other		209			151			58			38.4	%
Total Block Hours		31,364			32,894			(1,530	)		(4.7	%)
Revenue Per Block Hour
ACMI	$	6,058		$	5,971		$	87			1.5	%
AMC Charter	$	21,291		$	17,489		$	3,802			21.7	%
Commercial Charter	$	19,559		$	15,587		$	3,972			25.5	%
Scheduled Service Traffic
RTM’s (000’s)		458,324			376,275			82,049			21.8	%
ATM’s (000’s)		717,365			593,816			123,549			20.8	%
Load Factor		63.9	%		63.4	%		5 bps
RATM	$	0.298		$	0.243		$	0.055			22.6	%
Yield	$	0.466		$	0.383		$	0.083			21.7	%
Fuel
Scheduled Service and Commercial Charter
Average fuel cost per gallon ***	$	3.61		$	2.12		$	1.49			70.3	%
Fuel gallons consumed (000’s)		43,647			38,880			4,767			12.3	%
AMC
Average fuel cost per gallon	$	2.86		$	2.25		$	0.61			27.1	%
Fuel gallons consumed (000’s)		17,242			17,710			(468	)		(2.6	%)
Fleet (average during the period)
Operating Aircraft count*		29.9			32.0			(2.1	)		(6.6	%)
Dry Leased **		5.3			5.0			0.3			6.0	%

*	This average does not include one Boeing 747-400 currently undergoing freighter conversion.
**	Dry Leased aircraft are not included in the operating fleet average aircraft count.
***	Includes all into plane costs.

Operating Revenues

     The following table compares our operating revenues for the three months ended June 30:

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					Increase /			Percent
	2008		2007		(Decrease)			Change
Operating Revenues
ACMI	$	76,247	$	91,252	$	(15,005	)		(16.4	%)
Scheduled Service		213,423		144,245		69,178			48.0	%
AMC Charter		111,756		95,471		16,285			17.1	%
Commercial Charter		24,370		28,634		(4,264	)		(14.9	%)
Dry Leasing revenue		12,984		13,025		(41	)		(0.3	%)
Total operating revenues	$	438,780	$	372,627	$	66,153			17.8	%

     ACMI revenue decreased due to lower Block Hours, while revenue per Block Hour increased slightly compared with the same quarter in the prior year. ACMI Block Hours were 12,587 for the second quarter of 2008, compared with 15,283 for the second quarter of 2007, a decrease of 2,696 Block Hours, or 17.6%. Revenue per Block Hour was $6,058 for the second quarter of 2008, compared with $5,971 for the second quarter of 2007, an increase of $87 per Block Hour, or 1.5%. The reduction in Block Hours was due to a reallocation of one Boeing 747-400 to Express Network ACMI service for DHL. This aircraft is one of the two Boeing 747-400s, which we began flying for DHL in the second quarter of 2008 in Trans-Pacific Express Network ACMI service. The revenue and operating statistics for the Express Network ACMI operation are included in Scheduled Service. We redeployed one Boeing 747-200 at the end of its ACMI contract to the Charter business unit during 2008. During the three months ended June 30, 2008 there was an average of nine Boeing 747-400 aircraft and an average of 1.4 Boeing 747-200 aircraft supporting ACMI compared with an average of ten Boeing 747-400 aircraft and an average of 2.9 Boeing 747-200 aircraft supporting ACMI for the comparable period in 2007.

     Scheduled Service revenue increased significantly due to higher revenue ton miles as well as higher yields per revenue ton mile. RTMs in the Scheduled Service segment were 458.3 million on a total capacity of 717.4 million ATMs in the second quarter of 2008, compared with RTMs of 376.3 million on a total capacity of 593.8 million ATMs in the second quarter of 2007. Block Hours were 12,073 in the second quarter of 2008, compared with 10,164 for the second quarter of 2007, an increase of 1,909, or 18.8%. Load Factor was 63.9% with a Yield of $0.466 in the second quarter of 2008, compared with a Load Factor of 63.4% with a Yield of $0.383 in the second quarter of 2007, representing an increase of 0.5 percentage points in load factor and an increase in yield of 21.7%. Scheduled Service revenue and Block Hours in the second quarter of 2008 increased over the second quarter of 2007 due to the addition of two Boeing 747-400 aircraft for the purpose of serving DHL’s Trans-Pacific Express Network ACMI. One of the aircraft was sourced from ACMI service and the second aircraft was sourced via the deployment of a maintenance spare. The substantial increase in Scheduled Service yield is primarily the result of the fuel surcharge increases that were implemented consistent with the increasing price of fuel and the start-up of Express Network ACMI during the second quarter of 2008. RATM in our Scheduled Service segment was $0.298 in the second quarter of 2008, compared with $0.243 in the second quarter of 2007, representing an increase of 22.6%.

     AMC Charter revenue increased primarily as a result of the increase in the AMC’s per ton mile rate offset partially by a small reduction in Block Hours. The AMC’s mileage rate includes the cost of fuel, which increased significantly on a quarter-over-quarter basis. AMC Charter Block Hours were 5,249 for the second quarter of 2008, compared with 5,459 for the second quarter of 2007, a decrease of 210 Block Hours, or 3.8%. Revenue per Block Hour was $21,291 for the second quarter of 2008, compared with $17,489 for the second quarter of 2007, an increase of $3,802 per Block Hour, or 21.7%. The AMC demand for Boeing 747 widebody cargo flying fell during the period, which drove the reduction in Atlas’ AMC Block Hours flown during the second quarter of 2008 compared with the second quarter of 2007. The AMC raised the wide body cargo per ton mile rate in October 2007 by 2.3% in the normal course of its annual rate making process. The AMC then raised its “pegged fuel price” on February 1, 2008 to $2.70 per gallon and again on June 1, 2008 to $3.20 per gallon. The changes from the rate making process as well as the interim increases in the “pegged fuel price” had the effect of increasing the AMC revenue per Block Hour from $17,489 for the second quarter of 2007 to $21,291 for the second quarter of 2008.

     Commercial Charter revenue decreased as a result of a decrease in Block Hours that was partially offset by an increase in Revenue per Block Hour. The increase in revenue per Block Hour was the result of pricing increases effected to compensate for the higher cost of fuel. Commercial Charter Block Hours were 1,246 for the second quarter of 2008, compared with 1,837 for the second quarter of 2007, a decrease of 591, or 32.2%. Revenue per Block Hour was $19,559 for the second quarter of 2008, compared with $15,587 for the second quarter of 2007, an increase of $3,972 per Block Hour, or 25.5%. The decrease in Block Hours is partially the result of the retirement of one Boeing 747-200 aircraft at the end of the first quarter of 2008 and the retirement of a damaged Boeing 747-200 aircraft in February 2008 (see Note 2 to our Financial Statements for further discussion).

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     Dry Leasing revenue was essentially unchanged on a year over year basis. The Company had three Boeing 747-400 aircraft and one Boeing 747-200 aircraft on Dry Lease to third parties at June 30, 2008 and three Boeing 747-400 aircraft and two Boeing 747-200 aircraft on Dry Lease to third parties at June 30, 2007. We experienced customer defaults on three Dry Leased Boeing 747-200 aircraft in the second quarter of 2008 as the two customers leasing these aircraft filed for protection under local insolvency laws. We have repossessed two of the three aircraft from one customer and have been in negotiations regarding the lease of the third aircraft with the other customer. All rents and maintenance reserves payable to us under these Dry Leases were fully reserved against in the second quarter of 2008.

     Total Operating revenue increased in the second quarter of 2008 compared with the second quarter of 2007, primarily as a result of the fuel-driven price increases in the Scheduled Service and AMC business and new Express Network ACMI flying, offset by reductions in ACMI and Commercial Charter flying.

Operating Expenses

     The following table compares our operating expenses for the three months ended June 30:

							Increase /			Percent
	2008			2007			(Decrease)			Change
Operating Expenses
Aircraft fuel	$	207,031		$	122,123		$	84,908			69.5	%
Salaries, wages and benefits		52,845			61,438			(8,593	)		(14.0	%)
Maintenance, materials and repairs		40,271			37,937			2,334			6.2	%
Aircraft rent		40,869			38,702			2,167			5.6	%
Ground handling and airport fees		19,096			18,385			711			3.9	%
Landing fees and other rent		20,213			18,288			1,925			10.5	%
Depreciation and amortization		12,817			10,062			2,755			27.4	%
Gain on disposal of aircraft		(2,726	)		(37	)		2,689			7,267.6	%
Travel		12,882			12,610			272			2.2	%
Minority interest		(239	)		—			239			—
Other		22,169			21,883			286			1.3	%
Total operating expense	$	425,228		$	341,391		$	83,837			24.6	%

     Aircraft fuel expense increased as a result of increased market prices for fuel. The average fuel price per gallon for the Scheduled Service and Commercial Charter businesses was approximately $3.61 for the second quarter of 2008, compared with approximately $2.12 for the second quarter of 2007, an increase of $1.49, or 70.3%. Fuel consumption for the Scheduled Service and Commercial Charter businesses increased 4.8 million gallons or 12.3% to 43.6 million gallons for the second quarter of 2008 from 38.9 million gallons during the second quarter of 2007. The average pegged price per gallon for the AMC business was approximately $2.86 for the second quarter of 2008, compared with approximately $2.25 for the second quarter of 2007, an increase of $0.61, or 27.1%. AMC Fuel consumption decreased by 0.5 million gallons, or 2.6%, to 17.2 million gallons for the second quarter of 2008 from 17.7 million gallons during the second quarter of 2007. The decrease in our AMC fuel consumption is commensurate with the decrease of Block Hours in that segment. We do not incur fuel expense in our ACMI service as the cost of fuel is borne by the customer.

     Salaries, wages and benefits decreased due to the reduction in Block Hours as well as lower profit sharing and incentive compensation accruals related to decreased profitability in the second quarter of 2008 compared to the second quarter of 2007. In the second quarter of 2008, we also released employment tax reserves related to the successful resolution of an examination with the IRS resulting in a $2.7 million non-recurring benefit for the period.

     Maintenance materials and repair increased as a result of increases in heavy maintenance. Heavy maintenance activity reflects one additional Boeing 747-400 D Check offset by one less Boeing 747-200 C Check and one less CF6-50 engine overhaul. There were two C Checks on Boeing 747-200 aircraft in the second quarter of 2008, as compared with three C Checks during the second quarter of 2007. For our Boeing 747-400 aircraft, there was one D Check in the second quarter of 2008 compared with none in the prior period. There were ten engine overhauls in the second quarter of 2008 compared with eleven during the second quarter of 2007. The average cost per overhaul on engines increased during the second quarter of 2008 compared with 2007.

     Aircraft rent increased primarily due to short-term engine leases and supplemental rent expense for return conditions on two leased aircraft. In the second quarter, short-term engine leases added $0.9 million of

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additional rent expense and we recognized $0.9 million in supplemental rent expense to reflect maintenance return condition obligations related to two of our leased Boeing 747-200 aircraft.

     Ground handling and airport fees increased primarily as a result of an increase in Scheduled Service flying. Scheduled Service has the highest departure driven ground handling expense of any of our service types.

     Landing fees and other rent increased primarily as a result of the increase in overfly fees related to non-ACMI Block Hours. The higher overfly fees are the result of flying a more fuel efficient route, allowing us to recover the additional overfly fees in fuel savings. We generally do not incur landing fees in our ACMI service as the cost is borne by the customer.

     Depreciation and amortization increased primarily as a result of increases in scrapping of certain engine parts and rotables during overhaul. During the quarter we saw an increase of $2.3 million as a result of scrapping.

     Gain on disposal of aircraft in the second quarter of 2008 was the result of the disposal of aircraft tail number N527FT, which was damaged and subsequently scrapped (except for engines and other valuable rotable parts) after we reached a settlement with our insurer (see Note 2 our Financial Statements for further discussion). The gain represents the amount the insurance proceeds exceed the net book value of the aircraft.

     Travel increased as a result of an increase in the cost of airline ticket prices and increases in travel requirements to meet our customers’ flight schedules.

     Minority Interest is related to DHL’s 49% ownership interest in Polar. The amount of Polar loss attributable to DHL was $0.2 million for the quarter, which is reflected as a decrease in our consolidated operating expenses.

     Other operating expenses remained flat compared to the same quarter in the prior year. AMC commission expense increased by approximately $2.4 million due to higher AMC mileage rates, partially offset by a $1.8 million benefit from reduced interest from a settlement with the IRS on an employment tax examination.

     Total operating expense increased in the second quarter of 2008 compared with the second quarter of 2007 primarily due to the increased price of aircraft fuel.

Non-operating Expenses

     The following table compares our non-operating expenses for the three months ended June 30:

							Increase /			Percent
	2008			2007			(Decrease)			Change
Non-operating Expenses
Interest income	$	(3,118	)	$	(3,838	)	$	(720	)		(18.8	%)
Interest expense		11,709			11,274			435			3.9	%
Capitalized interest		(2,274	)		(1,121	)		1,153			102.9	%
Other (income) expense, net		607			(271	)		(878	)		(324.0	%)

     Interest income decreased in the quarter as a reduction in the effective yield on cash and cash equivalents offset higher cash balances available for investing.

     Interest expense increased on a year over year basis due to increased debt related to our PDP financing facility on five of our twelve firm Boeing 747-8F orders. Long-term debt and capital leases including the current portion averaged approximately $468.5 million in the second quarter of 2008 compared with approximately $408.4 million in the second quarter of 2007.

     Capitalized interest expense increased due to interest paid on our PDP financing facility in 2008 and increases in PDP balances paid to Boeing related to our Boeing 747-8F orders.

     Other (income) expense, net decreased primarily due to realized losses on the exchange of foreign denominated currencies into U.S. dollars. The U.S. dollar strengthened slightly against most foreign currencies during the second quarter of 2008 compared with the beginning of the quarter.

     Income taxes. The effective tax rate for the second quarter of 2008 was 76.9%. The comparable period for 2007 had

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a tax benefit associated with the issuance of Polar shares to DHL. Our rate for the second quarter of 2008 differed from the statutory rate primarily due to losses incurred by our Polar subsidiary. Polar did not record income tax benefits related to its losses in the second quarter of 2008 because Polar has no prior period income and therefore these losses may only offset future income. Until future income occurs, no tax benefit will be recorded. Our rates for the second quarter of 2007 reflect the recognition of a deferred tax asset of $37.0 million offset by a tax reserve of $9.3 million related to the transaction with DHL. (See Note 7 to our Financial Statements).

Segments

     Management allocates the direct costs of aircraft operation and ownership among the reportable segments based on the aircraft type and activity levels in each segment. Direct costs include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense related to aircraft debt and aircraft depreciation. Certain of our costs are fixed, indirect costs. These costs are not affected by fleet types or activity levels in our business segments and therefore these costs are not allocated among segments. Examples of unallocated fixed costs are administrative costs including operations administration, finance, human resources, information technology, non-aircraft depreciation, and other non-operating costs.

     For purposes of segment disclosure, management views the Direct Contribution from our Express Network ACMI flying as a split between the ACMI contribution derived from the Flight Services Agreement and other related services tied to the DHL Express Network ACMI operation, which is shown in ACMI, and the residual contribution attributable to Scheduled Service operations. The consolidation of Polar results reflects Express Network ACMI flying as Scheduled Service revenue in our Financial Statements and operating statistics. For segment reporting purposes all revenue derived from ACMI and related services provided to Polar for Express Network ACMI operations have been reclassified from Scheduled Service to the ACMI segment (see table below for reconciliation of revenue per the Financial Statements to revenue by segment). All costs associated with providing such services have also been reclassified for purposes of calculating Direct Contribution. Non-ACMI costs and an equal amount of revenue remain in the Scheduled Service segment.

     Ownership costs are apportioned to segments based on aircraft equivalents (derived from Block Hours flown) except for certain ACMI flying, which involves dedicated aircraft, in which case the allocation is based on the number of dedicated aircraft. The following table compares our Direct Contribution for segments (see Note 4 to our Financial Statements for the reconciliation to operating income (loss) and our reasons for using Direct Contribution) for the three months ended June 30:

						Increase /			Percent
	2008			2007		(Decrease)			Change
Direct Contribution:
ACMI	$	18,547		$	20,918	$	(2,371	)		(11.3	%)
Scheduled Service		(19,965	)		237		(20,202	)		(8,524.1	%)
AMC Charter		28,469			24,559		3,910			15.9	%
Commercial Charter		(1,788	)		2,796		(4,584	)		(163.9	%)
Dry Leasing		2,702			4,495		(1,793	)		(39.9	%)
Total Direct Contribution	$	27,965		$	53,005	$	(25,040	)		(47.2	%)
Unallocated Fixed Costs	$	24,063		$	27,850	$	(3,787	)		(13.6	%)

ACMI Segment

     During the three months ended June 30, 2008 there was an average of eleven Boeing 747-400 aircraft (including two DHL Trans-Pacific Express Network ACMI aircraft) and an average of 1.4 Boeing 747-200 aircraft supporting ACMI compared with an average of ten Boeing 747-400 aircraft and an average of 2.9 Boeing 747-200 aircraft supporting ACMI for the comparable period in 2007. ACMI segment Direct Contribution decreased primarily due to ownership and maintenance costs. Ownership costs increased as a result of more CF6-80 engine leases in support of our Boeing 747-400 fleet. The increase in maintenance costs was primarily due to one additional Boeing 747-400 D-Check in the second quarter of 2008 compared with the same quarter last year.

Scheduled Service Segment

     Direct Contribution relating to the Scheduled Service segment decreased primarily as a result of fuel price increases,

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ownership, and maintenance costs. Ownership costs increased as a result of more CF6-80 engine leases in support of our Boeing 747-400 fleet. The increase in maintenance costs was primarily due to one additional Boeing 747-400 D-Check in the second quarter of 2008 compared with the same quarter last year as well as higher engine maintenance expense. The increased costs were partially offset by fuel-surcharge-driven Yield increases.

AMC Charter Segment

     Direct Contribution relating to the AMC Charter segment increased slightly on fewer Block Hours. Although the price of fuel increased significantly on a quarter-over-quarter basis, the AMC reimburses the Company for its AMC fuel costs. The quarter-over-quarter increase in the AMC mileage rate, which includes a standard profit margin allowed by the AMC, was partially offset by cost increases in commissions, fuel and maintenance.

Commercial Charter Segment

     Direct Contribution relating to the Commercial Charter segment declined as a result of a decrease in Block Hours and increases in fuel costs that were not fully offset by fuel-driven price increases. The decrease in Block Hours was partially due to the unavailability of one Boeing 747-200 equivalent during the second quarter of 2008.

Dry Leasing

     Direct Contribution relating to the Dry Leasing segment declined due to an increase in costs related to return condition accruals and the operating costs of our Dry Leasing subsidiary. In addition, we experienced customer defaults on three Dry Leased Boeing 747-200 aircraft in the second quarter of 2008 as the two customers leasing these aircraft filed for protection under local insolvency laws. We have repossessed two of the three aircraft from one customer and have been in negotiations regarding the lease of the third aircraft with the other customer. The two repossessed aircraft have been made available for use by our AMC and Commercial Charter Segments. All rents and maintenance reserves payable to us under these Dry Leases were fully reserved against in the second quarter of 2008.

Unallocated Fixed Costs

     Unallocated fixed costs for the second quarter of 2008 were $24.1 million compared to $27.9 million in the same quarter of the prior year. The decrease of $3.8 million, or 13.6%, is primarily attributable to a one time benefit from the release of employment tax reserves and reduced accrued interest from a settlement with the IRS on an employment tax examination

Six Months Ended June 30, 2008 and 2007

Operating Statistics

     The table below sets forth selected operating data for the six months ended June 30:

							Increase /			Percent
	2008			2007			(Decrease)			Change
Block Hours
ACMI		25,648			29,440			(3,792	)		(12.9	%)
Scheduled Service		21,830			19,165			2,665			13.9	%
AMC Charter		9,822			12,310			(2,488	)		(20.2	%)
Commercial Charter		2,989			3,037			(48	)		(1.6	%)
Other		419			354			65			18.4	%
Total Block Hours		60,708			64,306			(3,598	)		(5.6	%)
Revenue Per Block Hour
ACMI	$	6,013		$	5,963		$	50			0.8	%
AMC Charter	$	20,946		$	17,219		$	3,727			21.6	%
Commercial Charter	$	17,688		$	14,593		$	3,095			21.2	%
Scheduled Service Traffic
RTM’s (000’s)		818,728			711,359			107,369			15.1	%
ATM’s (000’s)		1,280,232			1,116,934			163,298			14.6	%
Load Factor		64.0	%		63.7	%	3 bps
RATM	$	0.291		$	0.242		$	0.049			20.2	%

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					Increase /			Percent
	2008		2007		(Decrease)			Change
Yield	$	0.455	$	0.380	$	0.075			19.7	%
Fuel
Scheduled Service and Commercial Charter
Average fuel cost per gallon ***	$	3.26	$	2.03	$	1.23			60.6	%
Fuel gallons consumed (000’s)		81,313		71,695		9,618			13.4	%
AMC
Average fuel cost per gallon	$	2.72	$	2.25	$	0.47			20.9	%
Fuel gallons consumed (000’s)		31,858		39,588		(7,730	)		(19.5	%)
Fleet (average during the period)
Operating Aircraft count*		30.3		32.0		(1.7	)		(5.3	%)
Dry Leased **		5.4		5.0		0.4			8.0	%
Out-of-service **		0.4		0.3		0.1			33.3	%

*	This average does not include one Boeing 747-400 currently undergoing freighter conversion.
**	Dry Leased and out-of-service aircraft are not included in the operating fleet average aircraft count.
***	Includes all into plane costs.

Operating Revenues

     The following table compares our operating revenues for the six months ended June 30:

					Increase /			Percent
	2008		2007		(Decrease)			Change
Operating Revenues
ACMI	$	154,222	$	175,539	$	(21,317	)		(12.1	%)
Scheduled Service		372,897		270,118		102,779			38.0	%
AMC Charter		205,740		211,963		(6,223	)		(2.9	%)
Commercial Charter		52,864		44,329		8,535			19.3	%
Dry Leasing revenue		26,078		26,013		65			0.2	%
Total operating revenues	$	811,801	$	727,962	$	83,839			11.5	%

     ACMI revenue decreased due to lower Block Hours, while revenue per Block Hour increased slightly compared with the same period in the prior year. ACMI Block Hours were 25,648 for the first half of 2008, compared with 29,440 for the first half of 2007, a decrease of 3,792 Block Hours, or 12.9%. Revenue per Block Hour was $6,013 for the first six months of 2008, compared with $5,963 for the first six months of 2007, an increase of $50 per Block Hour, or 0.8%. The reduction in Block Hours was due to a reallocation of one Boeing 747-400 to Express Network ACMI Service for DHL during the second quarter. This aircraft is one of the two Boeing 747-400s that we began flying for DHL in the second quarter of 2008 in Trans-Pacific Express Network ACMI service. The Block Hours and associated statistics for the Express Network ACMI operation are included in Scheduled Service. We redeployed one Boeing 747-200 at the end of its ACMI contract to the Charter business unit in March 2008. During the six months ended June 30, 2008 there was an average of 9.5 Boeing 747-400 aircraft and an average 1.8 Boeing 747-200 aircraft supporting ACMI compared with an average of ten Boeing 747-400 aircraft and an average of 2.8 Boeing 747-200 aircraft supporting ACMI for the comparable period in 2007.

     Scheduled Service revenue increased significantly due to higher revenue ton miles as well as higher yields per revenue ton mile. RTMs in the Scheduled Service segment were 818.7 million on a total capacity of 1,280.2 million ATMs in the first half of 2008, compared with RTMs of 711.4 million on a total capacity of 1,116.9 million ATMs in the first half of 2007. Block Hours were 21,830 in the first half of 2008, compared with 19,165 for the first half of 2007, an increase of 2,665, or 13.9%. Load Factor was 64.0% with a Yield of $0.455 in the first half of 2008, compared with a Load Factor of 63.7% with a Yield of $0.380 in the first half of 2007, representing an increase of 0.3 percentage points in load factor and an increase in yield of 19.7%. Scheduled Service Block Hours in the second half of 2008 increased over the second half of 2007 due to the addition of two 747-400 aircraft during the second quarter for the purpose of serving DHL’s Trans-Pacific Express Network ACMI. One of the aircraft was sourced from ACMI service and the second aircraft was sourced via the deployment of a maintenance spare. The prior period in 2007 was also affected by relatively soft demand in Trans-Pacific markets and the redeployment of approximately one Boeing 747-400 from Scheduled Service to AMC to take advantage of

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the strong AMC demand. The substantial increase in Scheduled Service yield is primarily the result of fuel surcharge increases that were implemented consistent with the increasing price of fuel in the first half of 2008 compared with the same period in 2007 and the start-up of Express Network ACMI at the end of March 2008. RATM in our Scheduled Service segment was $0.291 in the first half of 2008, compared with $0.242 in the first half of 2007, representing an increase of 20.2%.

     AMC Charter revenue decreased primarily due to a significantly lower volume of AMC Charter flights offset almost entirely by an increase in AMC mileage rates. AMC Charter Block Hours were 9,822 for the first half of 2008, compared with 12,310 for the first half of 2007, a decrease of 2,488 Block Hours, or 20.2%. Revenue per Block Hour was $20,946 for the first half of 2008, compared with $17,219 for the first half of 2007, an increase of $3,727 per Block Hour, or 21.6%. The decrease in AMC Charter activity on a year-over-year basis reflects the spike in AMC demand we experienced in the first quarter of 2007. The AMC demand for Boeing 747 widebody cargo flying fell during the period, which drove the reduction in Atlas’ AMC Block Hours flown during the second half of 2008 compared with the second half of 2007. The AMC raised the wide body cargo per ton mile rate in October 2007 by 2.3% in the normal course of its annual rate making process. The AMC then raised its “pegged fuel price” on February 1, 2008 to $2.70 per gallon and again on June 1, 2008 to $3.20 per gallon. The changes from the rate making process as well as the interim increases in the “pegged fuel price” had the effect of increasing the AMC revenue per Block Hour from $17,219 for the first half of 2007 to $20,946 for the first half of 2008.

     Commercial Charter revenue increased as a result of an increase in Revenue per Block Hour, which offset a small reduction in Block Hours flown in the segment on a year-over-year basis. The increase in revenue per Block Hour was the result of pricing increases we made to compensate for the higher cost of fuel. Commercial Charter Block Hours were 2,989 for the first half of 2008, compared with 3,037 for the first half of 2007, a decrease of 48, or 1.6%. Revenue per Block Hour was $17,688 for the first half of 2008, compared with $14,593 for the first half of 2007, an increase of $3,095 per Block Hour, or 21.2%. The decrease in Block Hours is partially the result of the retirement of one Boeing 747-200 aircraft during the second quarter of 2008 and the retirement of a damaged Boeing 747-200 aircraft in February 2008 (see Note 2 to our Financial Statements for further discussion).

     Dry Leasing revenue remained flat on a year over year basis due to the reduction of Boeing 747-200 aircraft on Dry Lease in the second quarter of 2008. The Company had three Boeing 747-400 aircraft and one Boeing 747-200 aircraft on Dry Lease to third parties at June 30, 2008 and three Boeing 747-400 aircraft and two Boeing 747-200 aircraft on Dry Lease to third parties at June 30, 2007. We experienced customer defaults on three Dry Leased Boeing 747-200 aircraft in the second quarter of 2008 as the two customers leasing these aircraft filed for protection under local insolvency laws. We have repossessed two of the three aircraft from one customer and have been in negotiations regarding the lease of the third aircraft with the other customer. All rents and maintenance reserves payable to us under these Dry Leases were fully reserved against in the second quarter of 2008.

     Total Operating revenue increased in the second half of 2008 compared with the second half of 2007 primarily as a result of the fuel-driven price increases in Scheduled Service and Commercial Charter service, and new Express Network ACMI flying, offset by the volume-driven reductions in revenue from ACMI and AMC flying.

Operating Expenses

     The following table compares our operating expenses for the six months ended June 30:

							Increase /			Percent
	2008			2007			(Decrease)			Change
Operating Expenses
Aircraft fuel	$	351,522		$	234,434		$	117,088			49.9	%
Salaries, wages and benefits		111,748			123,188			(11,440	)		(9.3	%)
Maintenance, materials and repairs		93,843			83,219			10,624			12.8	%
Aircraft rent		80,327			77,123			3,204			4.2	%
Ground handling and airport fees		37,622			35,706			1,916			5.4	%
Landing fees and other rent		38,930			36,018			2,912			8.1	%
Depreciation and amortization		21,183			19,637			1,546			7.9	%
Gain on disposal of aircraft		(2,726	)		(1,005	)		1,721			171.2	%
Travel		26,609			24,604			2,005			8.1	%
Minority interest		(3,675	)		—			3,675			—
Other		45,466			46,312			(846	)		(1.8	%)
Total operating expense	$	800,849		$	679,236		$	121,613			17.9	%

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     Aircraft fuel expense increased as a result of increased market prices for fuel. The average fuel price per gallon for the Scheduled Service and Commercial Charter businesses was approximately $3.26 for the first half of 2008, compared with approximately $2.03 for the first half of 2007, an increase of $1.23, or 60.6%. Fuel consumption for the Scheduled Service and Commercial Charter businesses increased 9.6 million gallons or 13.4% to 81.3 million gallons for the first half of 2008 from 71.7 million gallons during the first half of 2007. The average pegged price per gallon for the AMC business was approximately $2.72 for the first half of 2008, compared with approximately $2.25 for the first half of 2007, an increase of $0.47, or 20.9%. AMC Fuel consumption decreased by 7.7 million gallons, or 19.5%, to 31.9 million gallons for the first half of 2008 from 39.6 million gallons during the first half of 2007. The decrease in our AMC fuel consumption corresponds to the decrease of 2,488 Block Hours in that segment. We do not incur fuel expense in our ACMI service as the cost of fuel is borne by the customer.

     Salaries, wages and benefits decreased due to the reduction in Block Hours as well as lower profit sharing and incentive compensation accruals related to decreased profitability in the first half of 2008 compared to the first half of 2007. In the second quarter, we also released employment tax reserves related to the successful resolution of an examination with the IRS resulting in a $2.7 million non-recurring benefit for the period.

     Maintenance materials and repair increased as a result of increases in line and heavy maintenance. Heavy maintenance activity reflects two additional Boeing 747-400 D Checks offset by three fewer Boeing 747-200C Checks. There were five C Checks on Boeing 747-200 aircraft in the first half of 2008, as compared with eight C Checks during the first half of 2007. For our Boeing 747-400 freighters, there were two D Checks in the first half of 2008 compared with none in the prior period. There were 26 engine overhauls in both the first half of 2008 and the first half of 2007. The average cost per overhaul on engines increased during the first half of 2008 compared with 2007. Line maintenance costs per Block Hour showed an increase of 17.3%, or approximately $3.8 million for the first half of 2008 compared with the first half of 2007, attributable to greater rotable repairs, increases in line maintenance, and an unfavorable shift in spare parts loaning and borrowing.

     Aircraft rent increased primarily due to short-term engine leases and supplemental rent expense for return conditions on two leased aircraft. In the first half of 2008, short-term leases resulted in $1.5 million of additional rent expense and we recognized $0.9 million in supplemental expense to reflect maintenance return condition obligations related to two of our leased Boeing 747-200 aircraft.

     Ground handling and airport fees increased primarily as a result of an increase in Scheduled Service flying. Scheduled Service has the highest departure driven ground handling expense of any of our service types.

     Landing fees and other rent increased primarily as a result of the increase in overfly fees related to non-ACMI Block Hours. The higher overfly fees are the result of flying a more fuel efficient route, allowing us to recover the additional overfly fees in fuel savings. We generally do not incur landing fees in our ACMI service as the cost is borne by the customer.

     Depreciation and amortization increased primarily as a result of a reduction in the average fleet life of the Boeing 747-200 aircraft during the second half of 2007 and increases in scrapping of certain engine parts and rotables during overhaul.

     Gain on disposal of aircraft in the second half of 2008 was the result of the disposal of aircraft tail number N527FT, which was damaged and subsequently scrapped (except for engines and other valuable rotable parts) after we reached a settlement with our insurer (see Note 2 our Financial Statements for further discussion). The gain represents the amount the insurance proceeds exceed the net book value of the aircraft. The gain in 2007 was the result of the sale of aircraft tail number N536MC.

     Travel increased as a result of greater crew travel requirements as well as an increase in the cost of airline ticket prices, weakness in the U.S. dollar and increases in travel requirements to meet our customers’ flight schedules.

     Minority Interest is related to DHL’s 49% ownership interest in Polar. The amount of Polar loss attributable to DHL was $3.7 million for the first half of 2008, which is reflected as a decrease in our consolidated operating expenses.

     Other operating expenses decreased slightly compared to the same quarter in the prior year. Bad debt expense decreased by approximately $1.0 million and we recorded a $1.8 million benefit from reduced interest from a settlement with the IRS on an employment tax examination, partially offset by an increase in AMC commission expense of

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approximately $2.0 million related to higher AMC mileage rates.

     Total operating expense increased in the first half of 2008 compared with the first half of 2007 primarily due to the increased price of aircraft fuel.

Non-operating Expenses

     The following table compares our non-operating expenses for the six months ended June 30:

							Increase /		Percent
	2008			2007			(Decrease)		Change
Non-operating Expenses
Interest income	$	(8,476	)	$	(7,259	)	$	1,217		16.8	%
Interest expense		23,092			22,522			570		2.5	%
Capitalized interest		(4,049	)		(1,963	)		2,086		106.3	%
Other (income) expense, net		139			92			47		51.1	%

     Interest income increased in the first half as higher cash balances available for investing were offset by a reduction in the effective yield on cash and cash equivalents.

     Interest expense increased by 2.5% on a year over year basis due to increased debt related to the PDP financing facility on five of our twelve firm Boeing 747-8F orders. Long-term debt and capital leases including the current portion averaged approximately $443.7 million in the first half of 2008 compared with approximately $411.8 million in the first half of 2007.

     Capitalized interest increased due to interest paid on our PDP financing facility in 2008 and increases in PDP balances paid to Boeing related to our Boeing 747-8F orders.

     Other (income) expense, net increased slightly due to realized losses on the exchange of foreign denominated currencies into U.S. dollars. The U.S. dollar strengthened slightly against most foreign currencies during the first half of 2008 compared with the beginning of the year.

     Income taxes The effective tax rate for the first half of 2008 was an expense of 1,645.1% compared with a benefit of 39.8% for the first half of 2007. Our rate for the first half of 2008 differed from the statutory rate primarily due to losses incurred by our Polar subsidiary and the disproportionate relationship of those losses to consolidated pretax income for the period. Polar did not record income tax benefits related to its losses in the first half of 2008 because Polar has no prior period income and these losses may only offset future income. Until future income occurs, no tax benefit will be recorded. Our rates for the first half of 2007 reflect the recognition of a deferred tax asset of $37.0 million offset by a tax reserve of $9.3 million related to the issuance of shares in Polar to DHL.

Segments

     Management allocates the direct costs of aircraft operation and ownership among the reportable segments based on the aircraft type and activity levels in each segment. Direct costs include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense related to aircraft debt and aircraft depreciation. Certain of our costs are fixed, indirect costs. These costs are not affected by fleet types or activity levels in our business segments and therefore these costs are not allocated among segments. Examples of unallocated fixed costs are administrative costs including operations administration, finance, human resources, information technology, non-aircraft depreciation, and other non-operating costs.

     For purposes of segment disclosure, management views the Direct Contribution from our Express Network ACMI flying as a split between the ACMI contribution derived from the Flight Services Agreement and other related services tied to the DHL Express Network ACMI operation, which is shown in ACMI, and the residual contribution attributable to Scheduled Service operations. The consolidation of Polar results reflects Express Network ACMI flying as Scheduled Service revenue in our financial statements and operating statistics. For segment reporting purposes all revenue derived from ACMI and related services provided to Polar for Express Network ACMI operations have been reclassified from Scheduled Service to the ACMI segment (see table below for reconciliation of revenue per the Financial Statements to revenue by segment). All costs associated with providing such services have also been reclassified

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for purposes of calculating Direct Contribution. Non-ACMI costs and an equal amount of revenue remain in the Scheduled Service segment.

     Ownership costs are apportioned to segments based on aircraft equivalents (derived from Block Hours flown) except for certain ACMI flying, which involves dedicated aircraft, in which case the allocation is based on the number of dedicated aircraft. The following table compares our Direct Contribution for segments (see Note 4 to our Financial Statements for the reconciliation to operating income (loss) and our reasons for using Direct Contribution) for the six months ended June 30:

						Increase /			Percent
	2008			2007		(Decrease)			Change
Direct Contribution:
ACMI	$	23,758		$	32,973	$	(9,215	)		(27.9	%)
Scheduled Service		(29,515	)		899		(30,414	)		(3,383.2	%)
AMC Charter		51,935			46,302		5,633			12.2	%
Commercial Charter		(3,586	)		2,261		(5,847	)		(258.6	%)
Dry Leasing		7,207			9,015		(1,808	)		(20.1	%)
Total Direct Contribution	$	49,799		$	91,450	$	(41,651	)		(45.5	%)
Unallocated Fixed Costs	$	52,279		$	57,121	$	(4,842	)		(8.5	%)

ACMI Segment

     During the six months ended June 30, 2008 there was an average of 10.5 Boeing 747-400 aircraft and an average of 1.8 Boeing 747-200 aircraft supporting ACMI compared with an average of ten Boeing 747-400 aircraft and an average of three Boeing 747-200 aircraft supporting ACMI for the comparable period in 2007. ACMI segment Direct Contribution decreased primarily due to a decrease in Block Hours flown as well as increases in ownership and maintenance costs. Ownership costs increased as a result of more CF6-80 engine leases in support of our expanded Boeing 747-400 fleet. The increase in maintenance costs was primarily due to two additional Boeing 747-400 D-Checks and one additional CF6-80 engine overhaul in the first half of 2008 compared with the same period last year

Scheduled Service Segment

     Direct Contribution relating to the Scheduled Service segment decreased primarily as a result of fuel price increases as well as higher ownership and maintenance costs. Ownership costs increased as a result of more CF6-80 engine leases in support of our expanded Boeing 747-400 fleet. The increase in maintenance costs was primarily due to two additional Boeing 747-400 D-Checks in the first half of 2008 compared with the first half of 2007 as well as higher engine maintenance expense. The increased costs were partially offset by fuel-surcharge-driven yield increases.

AMC Charter Segment

     Direct Contribution relating to the AMC Charter segment increased 12.2% on 20.2% fewer Block Hours. The increase in the Direct Contribution is due to contractual rate increases as well as the interim increases in the “pegged fuel price” (see AMC Revenue discussion above), which had the effect of increasing the AMC revenue per Block Hour from $17,219 for the first half of 2007 to $20,946 for the first half of 2008. Although the price of fuel increased significantly on a period-over-period basis, the AMC reimburses the Company for its AMC fuel costs. The increase in the AMC mileage rate, which includes a standard profit margin allowed by the AMC, was partially offset by cost increases in commissions and fuel.

Commercial Charter Segment

     Direct Contribution relating to the Commercial Charter segment declined as a result of increases in fuel costs that were not fully offset by fuel-driven price increases. The decrease in Block Hours was partially due to the unavailability of one Boeing 747-200 equivalent since February 2008

Dry Leasing

     Direct Contribution relating to the Dry Leasing segment declined due to an increase in costs related to return condition accruals and the operating costs of our Dry Leasing subsidiary. In addition, we experienced customer defaults on three Dry Leased Boeing 747-200 aircraft in the second quarter of 2008 as the two customers leasing these aircraft filed for protection under local insolvency laws. We have repossessed two of the three aircraft from one customer and have been in negotiations regarding the lease of the third aircraft with the other customer. The two repossessed aircraft have been made

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available for use by our AMC and Commercial Charter Segments. All rents and maintenance reserves payable to us under these Dry Leases were fully reserved against in the second quarter of 2008.

Unallocated Fixed Costs

     Unallocated fixed costs for the first half of 2008 were $52.3 million compared to $57.1 million in the same period of the prior year. The decrease of $4.8 million or 8.5% is attributable primarily to a one time benefit from the release of employment tax reserves and reduced accrued interest from a settlement with the IRS on an employment tax examination.

Liquidity and Capital Resources

     At June 30, 2008, we had cash and cash equivalents of $367.5 million, compared with $477.3 million at December 31, 2007, a decrease of $109.8 million, or 23.0%. The decrease in cash is the result of payments used for investing activities of $268.5 million partially offset by cash provided by operating and financing activities of $26.5 million and $132.3 million, respectively. On January 30, 2008, Atlas entered into a $270.3 million PDP Financing Facility with Norddeutsche Landesbank, in connection with five new Boeing 747-8F wide-body freighters scheduled for delivery between February and July 2010. In addition on July 3, 2008, Atlas entered into a $58.4 million, five year term loan and a commitment for an additional $41.1 million five term loan expected to close in the third quarter of 2008. We consider cash on hand, the PDP Financing Facility, the term loans (see Notes 3 and 9 to our Financial Statements) and cash generated from operations to be sufficient to meet our debt and lease obligations and to fund expected capital expenditures. Capital Expenditures for the remainder of 2008 are projected to be approximately $194.5 million, which includes Boeing 747-8F aircraft pre-delivery deposits (see Note 5 to our Financial Statements) and the remaining payments due on the Boeing 747-400 conversion freighter.

     We expect to utilize tax loss carryforwards to offset most taxable income generated during 2008. We may pay significant U.S. cash income taxes in 2009. Management is considering certain income tax planning opportunities that may reduce our effective tax rate and cash tax liability in 2008 and beyond. However, these planning opportunities are not yet fully developed, and the potential tax rate reduction and cash tax savings, if any, are not yet quantifiable. The Company expects to pay foreign income taxes in Hong Kong starting in 2008. These taxes could be offset in the U.S. by a foreign tax credit. The Company expects to pay no significant foreign income taxes in jurisdictions other than Hong Kong. Two of the Company’s foreign branch operations are subject to income tax in Hong Kong.

     Operating Activities. Net cash provided by operating activities for the first half of 2008 was $26.5 million, compared with net cash provided by operating activities of $43.9 million for the first half of 2007. The decrease in cash from operating activities is the result of the net loss and an increase in accounts receivable partially offset by an increase in accounts payable and accrued liabilities.

     Investing Activities. Net cash used for investing activities was $268.5 million for the first half of 2008, consisting primarily of capital expenditures of $274.4 million (including Boeing 747-8F pre-delivery deposits of $96.9 million and payments made for the acquisition of two Boeing 747-400 aircraft of $152.3 million) offset by insurance proceeds of $5.9 million. Net cash used by investing activities was $24.4 million for the first half of 2007 consisting primarily of capital expenditures of $30.4 million (including Boeing 747-8F aircraft pre-delivery deposits of $12.4 million) offset by $6.0 million in proceeds from the sale of a Boeing 747-200 aircraft.

     Financing Activities. Net cash provided by financing activities was $132.3 million for the first half of 2008, which consisted primarily of $107.3 million in borrowings under the PDP Financing Facility, proceeds from the DHL investment of $38.6 million, $3.2 million in proceeds from the exercise of stock options and a $1.2 million tax benefit on restricted stock and stock options offset by $17.5 million of payments on long-term debt and capital lease obligations and a $0.4 million purchase of treasury stock. Net cash provided by financing activities was $61.1 million for the first half of 2007, which reflects proceeds from the DHL investment of $75.0 million and $4.0 million in proceeds from stock option exercises and $1.6 million in tax benefits on restricted stock and stock options, offset by $18.8 million of payments on long-term debt and capital lease obligations and a $0.7 million purchase of treasury stock.

Debt Agreements

     See Note 6 to the audited consolidated financial statements included in the 2007 10-K for a description of the Company’s debt obligations and amendments thereto.

Off-Balance Sheet Arrangements

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     There were no material changes in our off-balance sheet arrangements during the six months ended June 30, 2008.

Critical Accounting Policies

     There have been no material changes to our critical accounting policies and estimates from the information provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2007 10-K.

Recent Accounting Pronouncements

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

Forward Looking Statements

     Our disclosure and analysis in this report, including but not limited to the information discussed in the “Business Strategy” section above, contain forward-looking information about our financial results, estimates and business prospects that involve substantial risks and uncertainties. From time to time, we also may provide oral or written forward-looking statements in other materials we release to the public. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historic or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” “target” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance, sales efforts, expenses, interest rates, foreign exchange rates, the outcome of contingencies such as legal proceedings and financial results.

     We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements.

     We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Form 10-Q, 8-K and 10-K reports filed with the SEC. Our 2007 10-K listed various important risk factors that could cause actual results to differ materially from expected and historic results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There have been no material changes in market risks from the information provided in Item 7A “Quantitative and Qualitative Disclosures About Market Risk” included in our 2007 10-K, except as follows:

     Aviation fuel. Our results of operations are affected by changes in the price and availability of aviation fuel. Market risk is estimated at a hypothetical 10% increase or decrease in the average cost per gallon of fuel for the second quarter of 2008. Based on actual fuel consumption during the second quarter of 2008 for the Scheduled Service and Commercial Charter business segments, such an increase or decrease would result in a change to aviation fuel expense of approximately $15.8 million for the second quarter of 2008. Fuel prices for AMC are set each September by the military and are fixed for the year and adjusted to actual costs incurred. ACMI does not present an aviation fuel market risk, as the cost of fuel is borne by the customer.

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, 2008. 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

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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, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     With respect to the fiscal quarter ended June 30, 2008, the information required in response to this Item is set forth in Note 5 to our Financial Statements contained in this report, and such information is incorporated herein by reference. Such description contains all of the information required with respect hereto.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     We made the following repurchases of shares of our common stock during the fiscal quarter ended June 30, 2008:

							Maximum Number (or
					Total Number of		Approximate Dollar
					Shares Purchased as		Value) of Shares
	Total Number of				Part of Publicly		that May Yet Be
	Shares Purchased		Average Price Paid		Announced Plans or		Purchased Under the
Period	(a)		per Share		Programs (b)		Plans or Programs
April 1, 2008 through April 30, 2008		170	$	58.54		—		—
May 1, 2008 through May 31, 2008		1,275	$	61.62		—		—
June 1, 2008 through June 30, 2008		3,747	$	52.41		—		—
Total		5,192	$	54.87		—		—

(a)	This column reflects the repurchase of 5,192 shares of common stock, previously issued by Holdings, to satisfy individual income tax liabilities of our employees at statutory minimum rates resulting from the vesting of restricted shares during such period.
(b)	There are no approved share repurchase programs.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     At our annual meeting of stockholders held in New York, New York on May 21, 2008, our stockholders re-elected our Board of Directors, and the shares present at the meeting were voted for or withheld from each nominee were as follows:

Name	Number of Shares Voted For		Number of Shares Withheld
Robert F. Agnew		17,369,608		94,122
Timothy J. Bernlohr		16,846,263		617,467
Keith E. Butler		17,369,656		94,074
Eugene I. Davis		16,574,488		889,242
William J. Flynn		17,419,452		44,278
James S. Gilmore III		10,687,376		6,776,354
Carol B Hallett		17,406,467		57,263
Frederick McCorkle		16,883,389		580,341

     Jeffrey H. Erickson, our former President and Chief Executive Officer, did not to stand for election and retired from the Board at the time of the meeting.

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     The Audit Committee’s designation of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2008 was ratified by the stockholders. The shares present at the meeting were voted on the proposal as follows: 17,158,062 shares voted for approval, 305,228 shares voted against the proposal, with 440 shares abstaining.

At the meeting, our stockholders also approved an amendment to the Atlas Air Worldwide Holdings, Inc. 2007 Incentive Plan (the “2007 Plan”) to increase the amount of shares reserved under the 2007 Plan by 1,100,000. The shares present at the meeting were voted on the proposal as follows: 16,122,814 shares voted for approval, 497,113 shares voted against the proposal, with 62,702 shares abstaining. There were 781,101 broker non-votes in respect of this proposal.

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.

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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 7, 2008	/s/ William J. Flynn
	William J. Flynn
	President and Chief Executive Officer
Dated: August 7, 2008	/s/ Jason Grant
	Jason Grant
	Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number		Description
	10.1	Atlas Air Worldwide Holdings Incentive Plan (As Amended), filed as Exhibit 10 to the Company’s Current Report on Form 8-K dated May 21, 2008, and incorporated herein by reference.
	10.2	Employment Agreement by and between Ronald A. Lane and Atlas Air, Inc.
	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.

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EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

     This Employment Agreement (hereinafter referred to as the “Agreement”) is made and entered into as of the 27th day of March, 2008 by and between Ronald A. Lane (hereinafter referred to as the “Employee”) and Atlas Air, Inc., a Delaware corporation (hereinafter referred to as “Atlas” or the “Company”).

     WHEREAS, the Employee had been previously employed by the Company as Senior Vice President and Special Advisor pursuant to that Amended Restated Employment Agreement dated as of March 21, 2007, (the “Original Employment Agreement”);

     WHEREAS, the Company wishes to now engage Employee pursuant to the terms and conditions hereof; and

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:

1. DEFINITIONS

     1.1 “Employment Period” shall mean the period commencing as of the date hereof and extending until December 31, 2009, subject to earlier termination as set forth in Section 4.1 below.

     1.2 “Confidential or Proprietary Information” as used herein shall refer to all information relative to the plans, structure and practices, including information relating to its customers, contracts and aircraft of Atlas or any affiliate or subsidiary thereof, except:

          (a) information that is or becomes a matter of public knowledge through no fault of the Employee; or

          (b) information rightfully received by the Employee from a third party without a duty of confidentiality; or

          (c) information disclosed to the Employee with Atlas’ prior approval for public dissemination.

2. OBLIGATIONS OF THE EMPLOYEE

     Atlas and the Employee agree to the following rights, obligations and duties:

     2.1 Obligations of the Employee. During the Employment Period, Atlas agrees to retain the Employee as a Special Advisor. The scope of the Employee’s responsibilities shall be determined by the Board of Directors, the Chief Executive Officer, the Chief Operating Officer,

the Chief Financial Officer and such other officers of Atlas as the Chief Executive Officer shall deem appropriate. The Employee shall, except when prevented by illness or permanent disability or during a period of vacation, devote sufficient Employee business time to ensure accomplishment of the projects similar to those projects set forth in Exhibit A which are assigned to him and attention to the good faith performance of the other duties contemplated by this Agreement. The Employee shall be able to work a minimum of four (4) days per month, and shall report to the Company’s Chief Financial Officer.

     2.2 Principal Residence of the Employee. The Employee shall maintain his principal residence in the Long Beach, California area unless otherwise agreed.

     2.3 New Position Provisions. Upon execution of this Agreement, the parties’ respective rights and obligations under the Original Employment Agreement shall be superseded by this Agreement. The Employee hereby affirms his resignation of his prior position as Senior Vice President of the Company and its affiliates as of December 31, 2007.

3. COMPENSATION

     During the Employment Period, Atlas will pay the Employee as follows:

     3.1 Compensation. Employee acknowledges receipt of $74,819.50 from the Company prior to the execution of this Agreement, which amount, together with an additional payment on March 31, 2008 of $14,963.90, shall be applied against amounts due for the months of January, February and March, 2008. Starting April 15, 2008, Atlas will pay Employee a monthly minimum commitment of four days per month in two equal monthly installments on the 15^th and last day of each month. Atlas will pay Employee at the rate of $5,000 per diem for a minimum or four days per month and additional days (or fractions thereof) worked above the four day minimum. Notwithstanding the minimum commitment of four days per month, the parties agree that the target number of days the Company intends to employ Employee is 100 days annually. Days in excess of the four days per month are not guaranteed. Payments for days worked over and above the four day minimum will be reconciled at month end and paid in the next mid-month payroll. The Company will not be obligated to pay Employee an annual incentive bonus, whether in accordance with the Company’s annual incentive plan or otherwise.

     3.2 Benefits. During the Employment Period, the Employee and the Employee’s dependents shall be entitled to participate in the Atlas health insurance plans (major medical, dental and vision), and Atlas will contribute to the Employee’s monthly premium as provided by such plan. Atlas reserves the right to discontinue participation in any health insurance plan at any time with the understanding that Atlas will comply in full measure with all state and federal laws regarding the changes of insurance coverage by private employers and notification under the Consolidated Omnibus Budget Reconciliation Act. The Employee also shall to the same extent and at a level commensurate with other employees of Atlas, be entitled to participate in any other benefit plans or arrangements of Atlas.

     3.3 Restricted Shares and Options. During the Employment Period, all Company restricted shares and stock options, if any, will continue to vest in accordance with their terms.

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4. TERMINATION OF THE EMPLOYMENT PERIOD

     4.1 Termination. Employment hereunder shall be through the Employment Period; provided, however, that the Company may immediately terminate the Employment Period with Cause (as defined below). “Cause” shall be defined as (i) a breach by the Employee of a material term of this Agreement; (ii) any act of misconduct or dishonesty by the Employee; or, (ii) the Employee’s failure to perform work as assigned to him from time to time by Atlas. Provisions of this Agreement shall survive any termination if so provided herein or if necessary or desirable to accomplish the purposes of other surviving provisions, including without limitation the obligations of the Company under Section 4.2 and the obligations of the Employee under Section 4.3.

     4.2 Rights Following Termination. (a) Upon Employee’s execution and delivery of this Agreement and the Release included in the Original Employment Agreement (“EA Release”) (Which EA Release shall not release the Company of its payment obligation to the Company as provided in the first sentence of Section 3.1), Employee shall receive severance of $426,080 paid in a lump sum within ten (10) days (provided that the Employee does not revoke the EA Release).

     (b) Upon (x) termination of the Employment Period by the Company without Cause, (y) expiration of the Employment Period or (z) termination by the Employee for any reason, including death or disability, subject to the Employee’s execution of a separation agreement and general release (a true and correct copy of which is attached hereto as Exhibit B) (the “Release”), the Employee shall be entitled to: (i) receive the Employee’s base salary and accrued benefits through December 31, 2009, except in the case of a termination by the Employee for any reason, including death or disability, the Employee shall be entitled only to base salary and accrued benefits through the date the Employee’s employment terminates; (ii) subject to the Employee’s fulfillment of all of his obligations under Section 4.3, continued coverage and rights and benefits available under the Atlas health insurance plans as provided in Section 3.2, above, for a period of twenty-four (24) months immediately following the date of termination subject to the Employee paying the same portion for the premiums for such coverage as he paid during the Employment Period; provided, however, that any such continued coverage shall cease in the event the Employee obtains comparable coverage in connection with subsequent consulting or employment arrangements, and to the extent Atlas is unable to continue such coverage, Atlas shall provide the Employee with economically equivalent benefits determined on an after-tax basis; (iii) subject to the Employee’s fulfillment of all of his obligations under Section 4.3, receive any retired employee benefits available to retired Company employees for which he is eligible pursuant to the terms of any applicable policies or plan documents, as amended from time to time; and (iv) subject to the Employee’s fulfillment of all of his obligations under Section 4.3 hereof, supplemental severance compensation in the amount of $100,000.00, paid in a lump sum within ten (10) days of the one-year anniversary of the Employee’s separation from employment hereunder. Upon termination of the Employment Period for any other reason (including, without limitation, by the Company with Cause), the Employee shall be entitled only to base salary and accrued benefits through the date the Employee’s employment terminates.

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     4.3 Restrictive Covenants.

          (a) The Employee covenants and agrees that the Employee will not, at any time, reveal, divulge or make known to any third party any confidential or proprietary records, data, trade secrets, pricing policies, strategy, rate structure, personnel policy, management methods, financial reports, methods or practice of obtaining or doing business, or any other Confidential or Proprietary Information of Atlas or any of its subsidiaries or affiliates (collectively the “Atlas Companies” and each, an “Atlas Company”) which is not in the public domain.

          (b) (i) Acknowledging his duty of loyalty to the Atlas Companies, the Employee agrees that, while he is employed by the Company, he will not, directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, compete with any of the Atlas Companies anywhere in the world or undertake any planning for any business competitive with any of the Atlas Companies with any of the following companies. Specifically, the Employee agrees that, during his employment with the Company, he will not provide advice, services or other assistance of any kind, whether with or without compensation, to the following companies and their subsidiaries and affiliates: Federal Express, United Parcel Service, Southern Air Holdings, Inc., World Airways, Inc., Air Atlanta Icelandic, Tradewinds Airlines or any company with respect to competition for the Company’s business related to the United States Air Force, including without limitation the Air Mobility Command. The Employee understands, however, that his passive ownership of one percent (1%) or less of the voting stock of any publicly traded company will not be a breach of his obligations hereunder.

          (ii) After his employment ends, the Employee may compete with any of the Atlas Companies without limitation, except with respect to Company’s business related to the United States Air Force, including without limitation the Air Mobility Command, but should he choose to so compete within the twelve (12) months immediately following termination of the Employment Period without first obtaining the express written consent of the Company, which consent shall not be unreasonably withheld, the Employee agrees that he will not be entitled to the payment and benefits provided in Sections 4.2(b) (ii), (iii) and (iv) above, and if such payment and benefits have already been provided to the Employee, he shall return to the Company the payment under Section 4.2(b)(ii) within five (5) days of written demand by the Company, or in the event of a dispute as to whether the Employee has breached any of his obligations under this Section 4.3, Employee shall return to the Company any payments received within five (5) days after determination of a breach in accordance with Sections 5.1, 5.2, 5.3 or 5.5, as appropriate.

          (c) The Employee acknowledges that his access to Confidential or Proprietary Information and to the Atlas Companies’ customers and his development of goodwill on behalf of the Atlas Companies with their customers during his employment would give him an unfair competitive advantage were he to begin competing with the Atlas Companies for their existing customers and that he therefore is being granted access to Confidential or Proprietary Information and the customers of the Atlas Companies in reliance on his agreement hereunder. Therefore, the Employee covenants and agrees that, during the Employment Period and during the twelve month period immediately following the termination of the Employment Period the Employee will not engage in any of the following activities directly or indirectly, for any reason,

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whether for the Employee’s own account or for the account of any other person, firm, corporation or other organization:

(i)

solicit, employ or otherwise interfere with any of the Atlas Companies’ contracts or relationships with any officer, director, employee, independent contractor or with any individual who has been employed or associated with the Atlas Companies within the six (6) months prior to the Employee’s termination of his employment relationship with the Company; or

(ii)

solicit or encourage any ACMI wet lease customer utilizing at least one full aircraft (including DHL Express) of Atlas Air, Inc., to terminate or diminish its relationship with Atlas Air, Inc. or Polar Air Cargo Worldwide, Inc. or seek to persuade any such customer to conduct with any other person or entity any business or activity which such customer conducts with Atlas Air, Inc. or Polar Air Cargo Worldwide, Inc.; provided, however, that these restrictions shall apply only with respect to those persons or entities who are customers of Atlas Air, Inc. or Polar Air Cargo Worldwide, Inc. within the twelve (12) months prior to the Employee’s termination of his employment relationship with the Company.

          (d) In the event the Employee breaches any of his obligations under this Section 4.3, he shall within five (5) days return to the Company any payments he received under Section 4.2(ii) and any benefits under Section 4.2(iii) shall immediately cease. In such event, the Employee will likewise forfeit his eligibility for supplemental severance under Section 4.2(iv). In the event of a dispute as to whether the Employee has breached any of his obligations under this Section 4.3, the Employee shall return to the Company any payments received within five (5) days after determination of a breach in accordance with Sections 5.1, 5.2, 5.3 or 5.5, as appropriate.

     4.4 Obligation to Cooperate. To the extent the Employee is reasonably available to provide such cooperation to Company, during the twenty-four (24) month period immediately following the termination of the Employee’s employment, the Employee shall cooperate with the Company with respect to all matters arising during or related to his employment, including but not limited to all matters in connection with any governmental investigation, litigation or regulatory or other proceeding which may have arisen or which may arise following the signing of this Agreement. The Company will reimburse the Employee out-of-pocket expenses incurred in complying with Company requests hereunder, provided such expenses are authorized by the Company in advance. In the event that any single Company request hereunder requires a commitment from the Employee of more than five (5) hours, the Company and the Employee shall mutually agree on reasonable compensation for the Employee’s services on such matter.

5. DISPUTE RESOLUTION AND CHOICE OF LAW

     5.1. Negotiation. If a dispute between the parties arises under this Agreement, the parties shall negotiate in good faith in an attempt to resolve their differences. The obligation of

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the parties to negotiate in good faith shall commence immediately, and shall continue for a period of at least thirty (30) days (“Negotiation”).

     If Negotiation fails to resolve a dispute between the parties within the first thirty (30) days, either party may proceed to demand mediation (“Mediation”). Upon agreement of both parties, arbitration may be initiated immediately, in lieu of Mediation.

     5.2. Mediation. If a dispute between the parties arises under this Agreement and has not been resolved under the Negotiation procedures described herein, either party may require, by written notice to the other party, that Negotiation be facilitated by a single mediator, to be elected by the parties (the “Mediator”).

     The parties shall select the Mediator within ten (10) days after receipt of notice. If the parties are unable to agree on the Mediator, the Mediator shall be selected by Atlas, but the selected Mediator shall be independent of Atlas and its affiliates. The fees of the Mediator shall be paid by the Company.

     With the assistance of the Mediator, the parties shall continue Negotiation in good faith for a period not to exceed thirty (30) days. If the parties are unable to reach agreement during this period, the Mediator shall be discharged and the parties’ obligations under this Mediation section shall be deemed satisfied.

     5.3. Arbitration. Subject to the duty to negotiate and mediate set forth above, all disputes, claims, or causes of action arising out of or relating to this Agreement or the validity, interpretation, breach, violation, or termination thereof not resolved by Mediation, shall be finally and solely determined and settled by arbitration, to be conducted in the State of New York, USA, in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) in effect at the date of arbitration (“Arbitration”).

     Any Arbitration commenced pursuant to this Agreement shall be conducted by a single neutral arbitrator, who shall have a minimum of three (3) years of commercial experience (the “Arbitrator”). The parties shall meet within ten (10) days of failure to resolve by Mediation to attempt to agree on an Arbitrator. Absent agreement at this meeting, the Arbitrator shall be selected by AAA. Such Arbitrator shall be free of any conflicts with Atlas and shall hold a hearing within thirty (30) days of the notice to the Employee.

     If the terms and conditions of this Agreement are inconsistent with the Commercial Arbitration Rules of the AAA, the terms and conditions of this Agreement shall control.

     The parties hereby consent to any process, notice, or other application to said courts and any document in connection with Arbitration may be served by (i) certified mail, return receipt requested; (ii) by personal service; or (iii) in such other manner as may be permissible under the rules of the applicable court or Arbitration tribunal; provided, however, a reasonable time for appearance is allowed. The parties further agree that Arbitration proceedings must be instituted within one (1) year after the occurrence of any dispute, and failure to initiate Arbitration proceedings within such time period shall constitute an absolute bar to the institution of any proceeding and a waiver of all claims.

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     The parties shall equally divide all costs and expenses incurred in such arbitration proceeding; provided, however, if the arbitrator rules in favor of the Employee on all or substantially all of his claims, the Company shall reimburse the Employee his reasonable attorney fees and costs associated with the arbitration proceedings.

     The Judgment of the Arbitrator shall be final and either party may submit such decision to courts for enforcement thereof.

     The parties agree that this Section 5 shall be specifically enforceable.

     5.4. Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws.

     5.5. Injunctive Relief. Notwithstanding the foregoing, Sections 5.1, 5.2 and 5.3 shall not preclude the Company from attempting to pursue a court action to enforce, determine the enforceability of, or seek injunctive relief due to a breach or threatened breach of the provisions of Section 4.3 of this Agreement.

6. SEVERABILITY AND ENFORCEABILITY

     It is expressly acknowledged and agreed that the covenants and provisions hereof are separable; that the enforceability of one covenant or provision shall in no event affect the full enforceability of any other covenant or provision herein. Further, it is agreed that, in the event any covenant or provision of this Agreement is found by any court of competent jurisdiction or Arbitrator to be unenforceable, illegal or invalid, such invalidity, illegality or unenforceability shall not affect the validity or enforceability of any other covenant or provision of this Agreement. In the event a court of competent jurisdiction or an Arbitrator would otherwise hold any part hereof unenforceable by reason of its geographic or business scope or duration, said part shall be construed as if its geographic or business scope or duration had been more narrowly drafted so as not to be invalid or unenforceable.

7. NOTICE

For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, if delivered by overnight courier service, if sent by facsimile transmission or if mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses or sent via facsimile to the respective facsimile numbers, as the case may be, as set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt; provided, however, that: (i) notices sent by personal delivery or overnight courier shall be deemed given when delivered; (ii) notices sent by facsimile transmission shall be deemed given upon the sender’s receipt of confirmation of complete transmission; and (iii) notices sent by United States registered mail shall be deemed given two days after the date of deposit in the United States mail.

If to the Company:

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Atlas Air, Inc.
2000 Westchester Avenue
Purchase, NY 10577
Attn: General Counsel

Facsimile: 1 914 701-8333

If to Employee:

Ronald A. Lane

     The address on file with the records of the Company

8. MISCELLANEOUS

     8.1. No Mitigation. The Employee shall have no duty to mitigate.

     8.2. Withholding. The Company shall be entitled to withhold from the payments and benefits described herein all income taxes and other amounts required to be withheld by applicable law.

     8.3. Pro-Ration. In the event the Employment Period is terminated in the middle of any calendar month, the amount due for such month shall be pro-rated on a daily basis,

     8.4. No Waiver Except in Writing. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. No waiver or modification of this Agreement or any of the terms and conditions set forth herein shall be effective unless submitted to a writing duly executed by the parties.

     8.5. Drafting. Both parties have participated in the preparation of this Agreement, and no rules of construction or interpretation based upon which party drafted any portion of the Agreement shall be applicable or invoked.

     8.6. No Representations. The parties agree and acknowledge that they have not relied upon any representation, whether written or oral, of the other party in connection with entering into this Agreement.

     8.7. Successors and Assigns. This Agreement shall be binding on Atlas and any successor thereto, whether by reason of merger, consolidation or otherwise. The duties and obligations of the Employee may not be assigned by the Employee.

     8.8. Confidentiality of Terms. Atlas and the Employee agree that the terms and conditions of this Agreement are confidential and that they will not disclose the terms of this Agreement to any third parties, other than the Employee’s spouse, their attorneys, auditors, accountants or as required by law or as may be necessary to enforce this Agreement.

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     8.9. Full Understanding. The Employee declares and represents that the Employee has carefully read and fully understands the terms of this Agreement, has had the opportunity to obtain advice and assistance of counsel with respect thereto, and knowingly and of the Employee’s own free will, without any duress, being fully informed and after due deliberation, voluntarily accepts the terms of this Agreement and represents that the execution, delivery and performance of this Agreement does not violate any agreement to which the Employee is subject.

     8.10. Entire Agreement. This Agreement sets forth the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior agreements, arrangements, and understandings between the parties with respect to the subject matter hereof, excluding only any option of restricted share agreements or other agreements related to a grant of equity or an option to purchase equity in the Company. For the avoidance of doubt, it is expressly agreed and understood that this Agreement cancels and replaces the parties’ Amended and Restated Employment Agreement of March 21, 2007, which expired by its terms on December 31, 2007, that the Employee will not receive severance or other compensation under that expired and superseded Agreement, and that this Agreement embodies the full and complete understanding of the parties with respect to all of the subject matters addressed herein.

     8.11. Counterparts. This Agreement may be executed in any number of separate counterparts, all of which taken together shall be deemed to constitute one and the same instrument.

[Signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement on the date and year first above written.

RONALD A. LANE

/s/ Ronald A. Lane                                                             

ATLAS AIR, INC.

By: /s/ Jason Grant                                                               
Name:  Jason Grant
Title:    Senior Vice President & Chief Financial Officer

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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 functions):

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 7, 2008	/s/ William J. Flynn
	William J. Flynn
	President and Chief Executive Officer

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EX-31.2

Exhibit 31.2

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

I, Jason Grant, 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 functions):

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 7, 2008	/s/ Jason Grant
	Jason Grant
	Senior Vice President and Chief Financial Officer

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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, 2008 as filed with the Securities and Exchange Commission (the “Report”), we, William J. Flynn and Jason Grant, 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 7, 2008

/s/ William J. Flynn  

William J. Flynn 

President and Chief Executive Officer 

/s/ Jason Grant  

Jason Grant 

Senior Vice President and Chief Financial Officer 

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