World Airways CEO Updates Company Progress

Apr 05, 2001, 01:00 ET from World Airways, Inc.

     HERNDON, Va., April 5 /PRNewswire/ -- World Airways (Nasdaq:   WLDA) issued
 the following letter to shareholders today.  The letter discusses the
 company's progress over the past year and its plans for the future.
 
                             Letter to Shareholders
 
     We begin 2001 headed in the right direction.  For the first time since
 1996, we are adding aircraft to our fleet, and we have positioned ourselves
 for top-line growth and sustainable profitability.  This is the result of the
 collective and collaborative efforts of our World Airways team, and it's
 important to recognize their work and their sacrifices.  We've made a great
 deal of progress.  However, there are still several challenges in front of us.
     We have taken the necessary steps to turn around the company and
 demonstrate an improvement in our financial results.  We negotiated more than
 $50 million in lease payment reductions for our MD-11 aircraft with our
 aircraft lessors over a five-year period.  We purchased bonds at a substantial
 discount to retire debt, resulting in interest savings of $750,000 annually.
 The new agreements negotiated with our pilots and dispatchers, in which they
 are exchanging a percentage of salary for World Airways stock, together with
 the participation of our administrative employee group and voluntary
 participation by a number of our flight attendants, have made it possible to
 implement a very successful stock for salary exchange program, and as of the
 end of December 2000, employees, management and the board of directors owned
 approximately 43% of the company.  We have eliminated management positions and
 structured the company appropriately for our present size and to accommodate
 some growth plans.  And we achieved an important and liberating milestone as
 the WorldCorp "ownership cloud" was lifted last summer with final distribution
 of our stock to some of their creditors as a part of the liquidation of
 WorldCorp.
     Certainly a watershed event for the company was the dramatic increase in
 the Air Mobility Command contract, exceeding the record level achieved two
 years ago.  Under this coveted award, World will support Air Force airlift
 service in the Atlantic, Pacific and Mediterranean regions, and receive $100
 million more than the fixed-buy award we had through the prior contract --
 evidence of the solid relationship we've developed with this important
 customer.
     A new contract with Sonair to fly oil workers from companies such as
 Chevron, Texaco and Exxon from Texas to Angola, and contract extensions with
 Aer Lingus and Emery Worldwide are representative of the opportunities that
 exist to provide seasonal or additional service to customers around the world.
 These contracts, too, demonstrate the value of strong customer relationships
 that result in contract extensions and add-ons.
     During the year, we focused on fundamental improvements in management,
 efforts that have already yielded a strong return.  For example, we scored
 improvements in on-time arrivals and mechanical dispatch reliability.  World
 is also increasing the number and quality of mechanics and technical
 operations management, while at the same time implementing programs that will
 reduce unit costs.  This is due in part to establishing maintenance agreements
 with quality service providers, such as Delta Air Lines, which is now
 providing engine overhaul and airframe and component repairs for our MD-11
 fleet.
     The results of the actions taken during the year 2000 have clearly been
 demonstrated in our financial reports and our continued listing on the Nasdaq
 stock market.  Although annual revenues remained the same from 1999 to 2000,
 the 2000 fourth quarter revenues showed strong progress, increasing 12.6%
 compared to 1999's final quarter.  We reported three consecutive quarters of
 operating income, with operating margins improving year over year.  The
 operating improvement and the positive impact of an accounting change resulted
 in net earnings of $2.03 per share versus a loss per share of $1.14 in 1999.
 Even excluding the accounting change in 2000 and the retirement of debt in
 1999, we still showed dramatic improvement, as our loss per share was $0.33 in
 2000 compared to a loss per share of $2.04 in the prior year.  We have been
 steadily improving our balance sheet.  At December 31, 2000 it showed cash and
 short-term investments of $15.7 million, up 26% from 1999 year-end.  During
 the last year our working capital position improved by $25.6 million.
     What lies ahead for World Airways?  We plan to grow this business.  Over
 the next five years, as we enlarge our fleet, we must generate a growing
 revenue base and achieve significantly greater profitability.
 
     Specifically, our goals include:
 
     *  Adding four DC 10 freighters and one DC 10 passenger aircraft during
        2001, increasing the size of our fleet from 11 to 16 aircraft.  As a
        result, the unit costs of the 16 aircraft fleet will be less than the
        unit cost of the existing fleet.
     *  Expanding passenger service to support various international travel
        needs, including Asia, which offers excellent growth potential.  Over
        time, we want to move away from seasonal service and build longer-term
        contracts.
     *  Building our cargo business, now at 20% of revenue, to at least 50% in
        the long-term future.  This will be the result of expanding service to
        existing customers, as well as adding several new long-term cargo
        clients.
     *  Leveraging our Air Force relationship to increase military carrier
        support.  We are active participants in two working groups, chaired by
        the Air Mobility Command, that are working on initiatives that could
        benefit our fixed-buy awards for the future.
     *  Achieving revenue growth of over 20% and block hour growth to between
        40,000 and 50,000 hours for 2001.
     *  Generating operating and net profitability for the year 2001 even
        though the Company expects to report a loss for the first quarter,
        customarily the slowest quarter.
     *  Continuing to reduce long-term debt.
 
     For the near term, our focus is on organic growth, but we have not ruled
 out growth from acquisitions.  In the last few years, we couldn't have even
 considered an acquisition, but as we continue to improve our balance sheet,
 this is an option for us.
     In the airline business, some of the metrics we use to measure success
 include safety, on-time performance and customer service.  For World Airways,
 we believe that our improving performance will be rewarded by an increasing
 share price and valuation.  We believe our stock is an excellent investment,
 and since we announced the stock repurchase program in the fall of 2000, we
 have repurchased almost 224,000 shares.  We believe that we've overcome some
 major hurdles and improved our performance, but we remain far from the finish
 line.  The energy, the dedication and the vision are there.  We have a lot
 still to accomplish, but I'm confident that we have built the right team to
 propel us into our next phase of growth.
     By this time next year, I'll be writing to you from our new headquarters
 in Atlanta, Georgia.  This move not only will reduce annual rent costs, but it
 should strengthen our employee recruitment efforts as we build from a talented
 labor pool in the Atlanta area.  I believe that 2001 will clearly showcase our
 successful strategy and deliver a growing value to our shareholders.
 
     Sincerely,
 
     Hollis L. Harris
     Chairman of the Board and Chief Executive Officer
 
     "Safe Harbor" statement under the Private Securities Litigation Reform Act
 of 1995:  This letter contains forward looking statements that are subject to
 risks and uncertainties including, but not limited to, the impact of
 competition in the market for air transportation services, the cyclical nature
 of the air carrier business, reliance on key marketing relationships,
 fluctuations in operating results and other risks detailed from time to time
 in the Company's periodic reports filed with the SEC (which reports are
 available from the Company upon request).  These various risks and
 uncertainties may cause the Company's actual results to differ materially from
 those expressed in any of the forward looking statements made by, or on behalf
 of, the Company in this letter.
 
 

SOURCE World Airways, Inc.
     HERNDON, Va., April 5 /PRNewswire/ -- World Airways (Nasdaq:   WLDA) issued
 the following letter to shareholders today.  The letter discusses the
 company's progress over the past year and its plans for the future.
 
                             Letter to Shareholders
 
     We begin 2001 headed in the right direction.  For the first time since
 1996, we are adding aircraft to our fleet, and we have positioned ourselves
 for top-line growth and sustainable profitability.  This is the result of the
 collective and collaborative efforts of our World Airways team, and it's
 important to recognize their work and their sacrifices.  We've made a great
 deal of progress.  However, there are still several challenges in front of us.
     We have taken the necessary steps to turn around the company and
 demonstrate an improvement in our financial results.  We negotiated more than
 $50 million in lease payment reductions for our MD-11 aircraft with our
 aircraft lessors over a five-year period.  We purchased bonds at a substantial
 discount to retire debt, resulting in interest savings of $750,000 annually.
 The new agreements negotiated with our pilots and dispatchers, in which they
 are exchanging a percentage of salary for World Airways stock, together with
 the participation of our administrative employee group and voluntary
 participation by a number of our flight attendants, have made it possible to
 implement a very successful stock for salary exchange program, and as of the
 end of December 2000, employees, management and the board of directors owned
 approximately 43% of the company.  We have eliminated management positions and
 structured the company appropriately for our present size and to accommodate
 some growth plans.  And we achieved an important and liberating milestone as
 the WorldCorp "ownership cloud" was lifted last summer with final distribution
 of our stock to some of their creditors as a part of the liquidation of
 WorldCorp.
     Certainly a watershed event for the company was the dramatic increase in
 the Air Mobility Command contract, exceeding the record level achieved two
 years ago.  Under this coveted award, World will support Air Force airlift
 service in the Atlantic, Pacific and Mediterranean regions, and receive $100
 million more than the fixed-buy award we had through the prior contract --
 evidence of the solid relationship we've developed with this important
 customer.
     A new contract with Sonair to fly oil workers from companies such as
 Chevron, Texaco and Exxon from Texas to Angola, and contract extensions with
 Aer Lingus and Emery Worldwide are representative of the opportunities that
 exist to provide seasonal or additional service to customers around the world.
 These contracts, too, demonstrate the value of strong customer relationships
 that result in contract extensions and add-ons.
     During the year, we focused on fundamental improvements in management,
 efforts that have already yielded a strong return.  For example, we scored
 improvements in on-time arrivals and mechanical dispatch reliability.  World
 is also increasing the number and quality of mechanics and technical
 operations management, while at the same time implementing programs that will
 reduce unit costs.  This is due in part to establishing maintenance agreements
 with quality service providers, such as Delta Air Lines, which is now
 providing engine overhaul and airframe and component repairs for our MD-11
 fleet.
     The results of the actions taken during the year 2000 have clearly been
 demonstrated in our financial reports and our continued listing on the Nasdaq
 stock market.  Although annual revenues remained the same from 1999 to 2000,
 the 2000 fourth quarter revenues showed strong progress, increasing 12.6%
 compared to 1999's final quarter.  We reported three consecutive quarters of
 operating income, with operating margins improving year over year.  The
 operating improvement and the positive impact of an accounting change resulted
 in net earnings of $2.03 per share versus a loss per share of $1.14 in 1999.
 Even excluding the accounting change in 2000 and the retirement of debt in
 1999, we still showed dramatic improvement, as our loss per share was $0.33 in
 2000 compared to a loss per share of $2.04 in the prior year.  We have been
 steadily improving our balance sheet.  At December 31, 2000 it showed cash and
 short-term investments of $15.7 million, up 26% from 1999 year-end.  During
 the last year our working capital position improved by $25.6 million.
     What lies ahead for World Airways?  We plan to grow this business.  Over
 the next five years, as we enlarge our fleet, we must generate a growing
 revenue base and achieve significantly greater profitability.
 
     Specifically, our goals include:
 
     *  Adding four DC 10 freighters and one DC 10 passenger aircraft during
        2001, increasing the size of our fleet from 11 to 16 aircraft.  As a
        result, the unit costs of the 16 aircraft fleet will be less than the
        unit cost of the existing fleet.
     *  Expanding passenger service to support various international travel
        needs, including Asia, which offers excellent growth potential.  Over
        time, we want to move away from seasonal service and build longer-term
        contracts.
     *  Building our cargo business, now at 20% of revenue, to at least 50% in
        the long-term future.  This will be the result of expanding service to
        existing customers, as well as adding several new long-term cargo
        clients.
     *  Leveraging our Air Force relationship to increase military carrier
        support.  We are active participants in two working groups, chaired by
        the Air Mobility Command, that are working on initiatives that could
        benefit our fixed-buy awards for the future.
     *  Achieving revenue growth of over 20% and block hour growth to between
        40,000 and 50,000 hours for 2001.
     *  Generating operating and net profitability for the year 2001 even
        though the Company expects to report a loss for the first quarter,
        customarily the slowest quarter.
     *  Continuing to reduce long-term debt.
 
     For the near term, our focus is on organic growth, but we have not ruled
 out growth from acquisitions.  In the last few years, we couldn't have even
 considered an acquisition, but as we continue to improve our balance sheet,
 this is an option for us.
     In the airline business, some of the metrics we use to measure success
 include safety, on-time performance and customer service.  For World Airways,
 we believe that our improving performance will be rewarded by an increasing
 share price and valuation.  We believe our stock is an excellent investment,
 and since we announced the stock repurchase program in the fall of 2000, we
 have repurchased almost 224,000 shares.  We believe that we've overcome some
 major hurdles and improved our performance, but we remain far from the finish
 line.  The energy, the dedication and the vision are there.  We have a lot
 still to accomplish, but I'm confident that we have built the right team to
 propel us into our next phase of growth.
     By this time next year, I'll be writing to you from our new headquarters
 in Atlanta, Georgia.  This move not only will reduce annual rent costs, but it
 should strengthen our employee recruitment efforts as we build from a talented
 labor pool in the Atlanta area.  I believe that 2001 will clearly showcase our
 successful strategy and deliver a growing value to our shareholders.
 
     Sincerely,
 
     Hollis L. Harris
     Chairman of the Board and Chief Executive Officer
 
     "Safe Harbor" statement under the Private Securities Litigation Reform Act
 of 1995:  This letter contains forward looking statements that are subject to
 risks and uncertainties including, but not limited to, the impact of
 competition in the market for air transportation services, the cyclical nature
 of the air carrier business, reliance on key marketing relationships,
 fluctuations in operating results and other risks detailed from time to time
 in the Company's periodic reports filed with the SEC (which reports are
 available from the Company upon request).  These various risks and
 uncertainties may cause the Company's actual results to differ materially from
 those expressed in any of the forward looking statements made by, or on behalf
 of, the Company in this letter.
 
 SOURCE  World Airways, Inc.