Worldwide cargo carrier reaches settlement with creditor committees

Atlas Air Worldwide Holdings, Inc. reached a settlement today with the court-appointed unsecured creditors committees of AAWH subsidiaries Atlas Air, Inc. (Atlas) and Polar Air Cargo, Inc. (Polar) in the Company's ongoing Chapter 11 bankruptcy proceedings.

Pursuant to the settlement, all litigation between the parties has been abated pending final documentation of the settlement terms and submission of an amended Disclosure Statement and Joint Plan of Reorganization. As part of the settlement, the Polar unsecured creditors will receive a 60 percent cash dividend on allowed unsecured claims against Polar. The Company anticipates that the total settlement will amount to between $30 to $40 million. The settlement will be funded by AAWH with cash on hand together with proceeds of up to approximately $20 million from a rights offering to be underwritten by certain members of the Atlas creditors committee. Under the settlement, the percentage of common stock previously allocated to Polar unsecured creditors will be reallocated to the Atlas unsecured creditors or sold as part of the rights offering.

The parties are expected to file a formal settlement term sheet containing further details of the settlement with the bankruptcy court by May 26, 2004. The Company then plans to file an amended Disclosure Statement and Joint Plan of Reorganization by Thursday, May 27, 2004. A hearing seeking court approval of the Disclosure Statement has been tentatively set for June 7, 2004.

Once approved by the court, the amended Disclosure Statement and Joint Plan of Reorganization will be sent out for a vote, with the expectation of confirming the Plan during the week of July 12, paving the way for the Company to emerge from Chapter 11 by no later than July 29, 2004.

"I would like to commend the creditors committees and their representatives for coming to mutually agreeable settlement terms in this matter," said Jeffrey H. Erickson, President and CEO of AAWH. "The agreement reached today moves us closer to our goal of emerging from bankruptcy as quickly as possible and with minimal disruption to our operations. We are pleased with the progress we have made to date and are hopeful that the amended Disclosure Statement and Joint Plan of Reorganization, incorporating the terms agreed upon today, will be approved."

FMI: www.atlasair.com