Incorporated: January 1993
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.
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.
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.
Revenues were $300 million a year in the late 1990s. The shipping market contracted in 2001 as the world economy slumped. Polar laid off more than 50 workers, including two dozen pilots, or about 10 percent of staff.
Atlas Air Worldwide Holdings, Inc. announced the acquisition of Polar Air Cargo for $84 million in July 2001, and the deal was closed four months later. Atlas had been formed in Colorado around the same time as Polar Air and carried freight under contract for other airlines. It had long sought to enter the Japanese air cargo market, the world's fourth largest, where Polar had a presence with 16 weekly flights.
Polar had also been awarded coveted rights to fly between Hong Kong and Seoul. Polar began flying from the United States to Korea, via Hong Kong or Tokyo, in October 2001. Taipei and Manila were also connected to this service. Inchon, South Korea, became Polar's Asian hub, with more than two dozen flights a week starting in 2003. Polar planned to connect
Further Reading
Armbruster, William, "Air Cargo's Young Guns," Journal of Commerce, January 9, 1995, p. 9.
Barling, Russell, "Atlas Launches Global Hub Network; Acquisition of Polar Air Boosts Cargo Capabilities," South China Morning Post (Hong Kong), November 21, 2001, p. 1.
------, "Picking Inchon as Its Asian Hub, the Carrier Has Boosted Its Flights to South Korea and the Philippines," South China Morning Post (Hong Kong), December 13, 2002, p. 5.
------, "Polar Air Plans Global Freighter Link with HK Approval," South China Morning Post (Hong Kong), March 7, 2003, p. 6.
Hall, Kevin G., "Southern Air, Ex-Tigers to Link US, Australia; All-Freight Service Seeks Asia Inroads," Journal of Commerce, March 23, 1993, p. 1A.
Hanigan, Ian, "New York Air Cargo Company Plans to Buy Long Beach Rival," Press-Telegram, July 13, 2001.
Iritani, Evelyn, "High Flier; Look Out, FedEx and UPS," Los Angeles Times, April 18, 1997, p. D2.
Kaye, Ken, "Freight Line Going to Asia, Australia," Sun Sentinel (Fort Lauderdale), April 12, 1993, p. 12.
Mongelluzzo, Bill, "All-Cargo 'Rookies' Show Off Their Wares," Journal of Commerce, April 25, 1994, p. 6.
Nelms, Douglas W., "When Niche Means Most," Air Transport World, July 1995, pp. 56ff.
"New International Cargo Service to Begin in May," Aviation Daily, March 19, 1993, p. 440.
Page, Paul, "Polar Air Cargo to Start Up in May as Aircraft Lessor," Traffic World, March 29, 1993, p. 23.
"Polar Air Cargo Enters Strong Freight Market," Aviation Week & Space Technology, March 29, 1993, p. 33.
"Polar Air Cargo Restructures to Operate International Freighter Service," Aviation Daily, March 31, 1994, p. 516.
"Polar Air Cargo Surges in 4Q Earnings," Airline Financial News, March 23, 1998.
"Polar Buy Sees Atlas' Freight and Charter Revenues Surge," South China Morning Post (Hong Kong), November 19, 2002, p. 6.
"Polar Challenge: A Young Cargo Airline Still Prospers Despite the Asian Downturn," Flight International, April 29, 1998, p. 44.
Putzger, Ian, "By Polar," Air Cargo World, December 1999, p. 24.
Ragsdale, Rose, "Polar Air to Consolidate Operations, Relocate Into Expanded Space," Alaska Journal of Commerce, September 1, 1997, p. 6.
Stapleton, Rob, "Damaged Polar Air Jet Likely to Sit Until Boeing Strike Ends," Alaska Journal of Commerce, March 5, 2000, p. 24.
------, "Polar Air Cargo, Atlas Air Inc. to Lay Off Pilots, Other Staff as U.S. Economy Slows," Alaska Journal of Commerce, May 27, 2001, p. 8.
— Frederick C. Ingram
