Tuesday, July 30, 2002 --   Atlas Air Worldwide Holdings, Inc. (“AAWH”) (NYSE:CGO) today reported a second quarter 2002 loss of $34.2 million, or $0.89 per share, for the period ended June 30, 2002, compared to a $49.0 million loss, or $1.28 a share, in the same period of 2001. Quarter-end cash and short-term investments stood at $278 million.

"Although the quarter was difficult from an earnings perspective, the Company successfully resolved some of its most significant outstanding issues over the course of the period,” said Richard Shuyler, Chief Executive Officer of Atlas Air Worldwide Holdings. “We reached our first-ever labor agreement with our flight crew employees at Atlas Air, which we are pleased to report has now been ratified, and secured financing for Atlas Air's three second-half B747-400 deliveries. While the air cargo market has still not yet returned to acceptable levels, we saw signs of improvement in key markets, particularly Asia, and expect revenue to substantially improve in the third and fourth quarters of the year.”

Compared to the prior year, second-quarter operating revenues increased $86.6 million, primarily due to the inclusion of Polar in 2002. Excluding Polar, second-quarter operating revenues declined $7.9 million versus the prior year, reflecting a reduction in contract services revenue.

“On a sequential basis, military flying declined by 44% versus the first quarter, leading to a reduction in total charter revenue of $26.2 million,” continued Shuyler. “The increase in commercial charter activity that we saw in March proved to be temporary, and did not resume again until late in June. That was the bad news. The good news was that revenues in our two core businesses, ACMI/hub activities at Atlas and scheduled service at Polar, were up 4% and 27% respectively, for an increase of $17.4 million.”

Operating expenses increased by $54.9 million versus the second quarter of 2001 due to the inclusion of Polar in 2002, offset by the larger impairment charge booked at Atlas in 2001. Operating expenses also increased due to the greater degree of charter flying at Atlas, which increased fuel and ground expenses in the quarter.

In addition, the Company incurred approximately $12.1 million in special non-cash charges in the second quarter, primarily related to impairment charges with respect to certain of its grounded aircraft and a required purchase price accounting adjustment with respect to Polar's B747-100 aircraft.

“We were further encouraged by the improvement in our liquidity position during the quarter,” added Shuyler. “We grew our cash and investment position by $12 million, ending the quarter at $278 million. Also, as we previously announced, we now believe our year-end cash and investment balances will further exceed our second-quarter level. Indeed, Atlas Air's liquidity will see a $27.6 million benefit as a result of the return of certain aircraft delivery deposits and the deferral of other such deposits that would have otherwise been due this year.”

“We are also pleased to have reached agreement on a first contract with our flight crew employees at Atlas Air, after two and a half years of negotiations. That agreement was formally ratified by our crew members yesterday. The contract is for a 42-month term, and provides for significant wage increases and quality-of-life improvements for our crewmembers. We believe that this contract is a good one for both the Company and our crew members, and ensures the Company's ability to continue to provide our customers with the reliable, low-cost and outstanding service they have come to expect.”

Consolidated earnings before interest, taxes, depreciation and aircraft rentals (EBITDAR), an important measure of pre-leverage cash flow, excluding impairment charges, totaled $38.3 million for the quarter, a margin of 16.2%, compared to $50.8 million or 34.1% for the comparable period of 2001.

For the first six months of 2002, consolidated EBITDAR, excluding im