UPDATE:Atlas Air CEO Sees New Cargo Security Rules; Lifts Fiscal Year Guidance

The head of Atlas Air Worldwide Holdings Inc. (AAWW) said Monday he expected more risk-based screening of global air cargo shipments, though this would likely stop short of assessing 100% of cargos.

Bill Flynn, chief executive of the U.S.-based air cargo operator, said he expected new requirements from the Department of Homeland Security and the Transportation Security Administration in the wake of the Oct. 29 terror alert.

Flynn, on a postearnings conference call, said the discovery of explosive materials at air cargo centers in the U.K. and Dubai was "very concerning" for the industry.

New measures would likely focus on shipments from Yemen, and beyond that involve "risk-based targeting" of air cargo shipments rather than a move to 100% screening of all air freight, said Flynn.

Atlas Air operates freighters on behalf of a number of carriers and shipping companies including Dubai-based Emirates Airline and British Airways PLC (BAY.LN), as well as for the U.S. military.

The company lifted its full-year profit guidance as demand continues to build for longhaul air cargo services. Its shares were recently up 6.6% at $55.72.

Atlas Air is also one of the early customers for the delayed new 747-8F freighters from Boeing Co. (BA). Flynn said it has yet to firm up a final delivery schedule for its 12 aircraft on order following the latest delay to the program. The first 747-8Fs are now due to arrive at launch customer Cargolux in mid-2011.

The company raised its minimum 2010 earnings target by 10 cents to $5.40 a share. Flynn said in a statement that global air-freight traffic had risen above pre-recession levels. Cargo haulers of all types have benefited from a recent increase in shipping.

Atlas Air reported earnings of $33.8 million, or $1.29 a share, up from $14.7 million, or 70 cents a share, a year earlier. Revenue climbed 28% to $326.7 million.

Operating margin widened to 16.8% from 11.2% as operating costs climbed 20%.

Revenue at the aircraft, crew, maintenance and insurance leasing business, the largest top-line contributor, climbed 19%. Commercial charter revenue nearly doubled. At the AMC charter segment, which provides service to the U.S. military, revenue slid 7.8%.

Block hours jumped 18% as revenue per block hour rose 31% and 24%, respectively, at the commercial charter and AMC charter units. Average utilization increased 12%.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com

(Matt Jarzemsky contributed to this article.)

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