Polar Air Cargo Inc.

International Directory of Company Histories, Volume 60 (1989) by Frederick C. Ingram

Polar Air Cargo Inc.

2000 Westchester Avenue Purchase, New York 10577 U.S.A. Telephone: (914) 701-8000 Fax: (914) 701-8001 Web site: http://www.polaraircargo.com

Wholly Owned Subsidiary of Atlas Air Worldwide Holdings, Inc. Incorporated: January 1993 Employees: 660 Sales: $300 million (2001) NAIC: 481112 Scheduled Freight Air Transportation

Polar Air Cargo Inc. is one of the world's leading all-cargo airlines. A subsidiary of Atlas Air, Inc., Polar operates a fleet of 15 Boeing 747s. Its operations have always been strongest in the Pacific, though the company operates scheduled routes to all inhabited continents. Polar markets its services mostly to freight forwarders.

A Niche in 1993

Air cargo was a growing business in the early 1990s in spite of the generally depressed state of the world economy. The founders of Polar Air Cargo saw their niche in the Pacific region served on a scheduled basis by Flying Tigers before its 1989 takeover by Federal Express.

Polar Air Cargo, L.P. was formed in January 1993 as a partnership between Polaris Holding Company, Southern Air Transport, Inc., and NedMark Transportation Services Inc. Southern Air, a major unscheduled cargo airline based in Miami, operated the planes, which were owned by Polaris Holding of San Francisco, a subsidiary of General Electric Capital Services; the three Boeing 747 freighters had formerly carried passengers for Pan American. NedMark, based in Long Beach, California, was formed to market the business mainly to freight forwarders.

Southern Transport began operating scheduled flights under the Polar Air Cargo name with a charter flight from New York to Vienna in April 1994. Scheduled operations began in May 1993 with a New York-Shannon, Ireland-Moscow route. This route was extended to Hong Kong and the United States for Polar's first transpacific service. Another connected New York to Hong Kong with stops in Los Angeles, Honolulu, and Sydney while returning via Taipei, Anchorage, and the major cargo hub of Columbus, Ohio.

Ned Wallace, head of NedMark, was named CEO of the partnership, supported by president Mark West. Wallace had been an executive with the Flying Tiger Line and was formerly chairman of Evergreen International. West had also been at both airlines. Though the market was competitive, Polar Air's planners sought to exploit low lease rates for aircraft and low rates for contract maintenance.

In March 1994, the whole arrangement was restructured due to Polar Air's rapid growth (the company would end the year with a fleet of nine planes). Southern Air Transport withdrew from the partnership entirely. NedMark Transportation Services changed its name to Polar Air Cargo Inc. on March 9, 1994. It was certified as an air carrier on July 4, 1994 and took over responsibility for flight operations. Polaris had formed a subsidiary called PALC II to lease the aircraft. Polaris was soon renamed GE Capital Aviation Services and relocated to Stamford, Connecticut.

Polar Air Cargo had 175 employees, 45 of them pilots, and operated a fleet of four Boeing 747s. Sales were about $168 million in 1994 and $234 million in 1995. Polar had become profitable in its first couple of months in business. The fleet numbered a dozen aircraft by July 1995. London, Amsterdam, and three stops in Brazil were added to the scheduled route network in 1996. Sales rose to $258 million, making Polar the largest all-cargo airline in the United States, according to Air Transport World.

Japan Added in 1997

The company launched scheduled service between the United States and Japan in April 1997, becoming only the third U.S.-based all-cargo airline in the market. During the year, Polar had also expanded its network to Bangkok, New Delhi, Manila, and Dubai.

Polar had 550 employees at the end of 1997. It posted a net profit of $4.3 million on sales of $335.3 million for the year, after losing $4.4 million on revenues of $256.2 million in 1996. The company's operations in the Pacific, its only profitable region in 1997, accounted for about three-quarters of revenues.

By 1998, Polar was the world's fourth largest all-cargo airline. It flew to 19 countries on five continents. Polar typically flew for freight forwarders, not passenger airlines. A marketing arrangement with Air New Zealand announced in August 1999 gave Polar a new stream of westbound cargo on its Pacific crossings. Polar's eastbound business had been much stronger.

The Asian financial crisis of 1997–98 greatly affected Polar's Pacific business, reducing the region's cargo traffic by one-third. Fortunately, U.S. and European markets remained strong, and there were good prospects for growth in other parts of the world.

In April 1998, Polar became the first all-cargo airline in the United States to equip its fleet with the Traffic Alert and Collision Avoidance System II (TCAS II). However, this was not designed to prevent mishaps such as one of the company's 747s being damaged at Anchorage International Airport in 2000 after 100 mph winds pushed it into a cargo loader.