Now The Largest Civilian Provider Of Military Air Transportation

Ongoing military operations in Afghanistan and Iraq may be taxing on America's military, but they're a positive boon for World Airways, which has become the Pentagon's single-largest provider of troop transportation.

"Fortunately, we had positioned the company to take advantage of that," said CEO Randy Martinez in an interview with the Atlanta Business Chronicle. "The military is becoming more dependent on commercial carriers to move their people in peace and in wartime."

As a result, World Airways gets about three-quarters of its $503 million annual revenue from the military -- primarily through contracts with the USAF. Ironically, perhaps, that makes World Airways one of America's most profitable airlines. as other legacy carriers struggle against rising fuel costs and low fares and some are struggling through bankruptcy, World Airways is capitalizing on a relationship with the Pentagon that stretches back more than a half-century.

And it's a relationship that seems profitable for the foreseeable future. Teal Group analyst Richard Aboulafia told the Chronicle, "It probably costs [World Airways] one-fourth or one-fifth what the military would spend to fly these troops with a C-5 [Galaxy cargo plane] that was built to move heavy equipment like tanks and trucks. Bottom line is the military really isn't in the airline business."

But World Airways is no stranger to financial hardship. The company, under its former owner, WorldCorp, went bankrupt in 1998, before aviation veteran Hollis Harris stepped in. Now, even in the fat times, the company wants to make sure it doesn't revisit those times when the military contracts start to run out.

"When the military revenue goes down at some point, which it will sooner or later, we have to be prepared," said Martinez in an interview with the Atlanta publication.

With that in mind, World has contracted with Taiwan to fly transports in and out of Taipei -- a two-year deal with $116 million. It's also extended a deal with the Angolan carrier Sonair for another $29 million. World Airways has just completed its third year of profitability.

FMI: www.worldair.com