<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                   FORM 10-Q

<Table>
<C>          <S>
 (Mark One)
    [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934
             FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

    [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934
             FOR THE TRANSITION PERIOD FROM           TO
</Table>

                                   ----------



                         COMMISSION FILE NUMBER 0-25732

                                ATLAS AIR, INC.
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
                        (State or other jurisdiction of
                         incorporation or organization)

                                   84-1207329
                       (IRS Employer Identification No.)

                             2000 WESTCHESTER AVE.,
                               PURCHASE, NY 10577
               (Address of principal executive offices)(Zip Code)

                                 (914) 701-8000
                        (Registrant's telephone number,
                              including area code)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]  No [ ].

     As of April 30, 2002 Atlas Air, Inc. had 100 shares of $.01 par value
Common Stock outstanding. All shares are held by Atlas Air Worldwide Holdings,
Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                        ATLAS AIR, INC. AND SUBSIDIARIES

                                     INDEX

<Table>
<Caption>
                                                                        PAGE
                                                                        ----
<S>      <C>                                                            <C>
                       PART I. FINANCIAL INFORMATION
Item 1.  Condensed Consolidated Financial Statements
         Condensed Consolidated Statements of Operations -- Three
         Months Ended March 31, 2002 and 2001........................     2
         Condensed Consolidated Balance Sheets -- March 31, 2002 and
         December 31, 2001...........................................     3
         Condensed Consolidated Statements of Cash Flows -- Three
         Months Ended March 31, 2002 and 2001........................     4
         Notes to Condensed Consolidated Financial Statements........     5
         Management's Discussion and Analysis of Financial Condition
Item 2.  and Results of Operations...................................     9
         Quantitative and Qualitative Disclosures About Market
Item 3.  Risk........................................................    14

                         PART II. OTHER INFORMATION
Item 1.  Legal Proceedings...........................................    15
Item 6.  Exhibits and Reports on Form 8-K............................    15
SIGNATURES...........................................................    16
</Table>

                                        1
<PAGE>

                                    PART I.

                             FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                        ATLAS AIR INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)

<Table>
<Caption>
                                                              THREE MONTHS ENDED
                                                                   MARCH 31,
                                                              -------------------
                                                                2002       2001
                                                              --------   --------
<S>                                                           <C>        <C>
Revenues:
  Contract services.........................................  $108,235   $160,648
  Charter services..........................................    40,094      3,050
  Other revenues............................................     2,649     16,614
                                                              --------   --------
     Total operating revenues...............................   150,978    180,312
Expenses:
  Salaries, wages and benefits..............................    26,771     30,159
  Aircraft rentals..........................................    31,822     31,386
  Depreciation and amortization.............................    21,307     20,186
  Ground handling and airport fees..........................     6,475      3,954
  Maintenance, materials and repairs........................    35,834     29,408
  Aircraft fuel.............................................     7,077      2,836
  Pilot profit sharing settlement...........................        --     22,815
  Other operating expenses..................................    22,203     24,203
                                                              --------   --------
          Total operating expenses..........................   151,489    164,947
                                                              --------   --------
Operating (loss) income.....................................      (511)    15,365
Other income (expense):
  Interest income...........................................     3,289      7,634
  Interest expense..........................................   (24,593)   (25,377)
  Capitalized interest......................................     2,457      2,863
  Change in fair value of interest rate swap................     1,368     (2,061)
                                                              --------   --------
                                                               (17,479)   (16,941)
                                                              --------   --------
Loss before income taxes and cumulative effect of a change
  in accounting principle...................................   (17,990)    (1,576)
Income tax benefit..........................................    (6,919)    (1,583)
                                                              --------   --------
Income/(loss) before cumulative effect of a change in
  accounting principle......................................   (11,071)         7
Cumulative effect of a change in accounting principle, net
  of applicable tax benefit of $933.........................        --     (1,589)
                                                              --------   --------
Net loss....................................................  $(11,071)  $ (1,582)
                                                              ========   ========
  Other comprehensive (loss)/income (unrealized (loss)/gain
     on securities, net of tax).............................      (451)         4
                                                              --------   --------
Total comprehensive loss....................................  $(11,522)  $ (1,578)
                                                              --------   --------
</Table>

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
                                        2
<PAGE>

                        ATLAS AIR, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                              MARCH 31,    DECEMBER 31,
                                                                 2002          2001
                                                              ----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>          <C>
                                        ASSETS
Current assets:
  Cash and cash equivalents.................................  $  113,596    $  199,270
  Short-term investments....................................     121,871       112,634
  Accounts receivable, (net of allowance of $29,886 and
     $19,060, respectively).................................     117,893       119,303
  Due from affiliates.......................................      26,004        28,873
  Income taxes receivable...................................      24,908        23,848
  Prepaid expenses and other................................      25,803        26,975
                                                              ----------    ----------
          Total current assets..............................     430,075       510,903
Property and equipment:
  Flight equipment..........................................   1,631,024     1,617,673
  Other.....................................................      47,628        47,494
                                                              ----------    ----------
                                                               1,678,652     1,665,167
  Less accumulated depreciation.............................    (338,610)     (317,360)
                                                              ----------    ----------
          Net property and equipment........................   1,340,042     1,347,807
Other assets:
  Debt issuance costs, net of accumulated amortization of
     $21,513 and $20,373, respectively......................      19,476        20,616
  Deposits and other........................................      61,557        60,763
                                                              ----------    ----------
       Total assets.........................................  $1,851,150    $1,940,089
                                                              ==========    ==========

                         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt and capital lease
     obligations............................................  $   78,287    $   45,934
  Accounts payable and accrued expenses.....................      61,619       112,801
                                                              ----------    ----------
          Total current liabilities.........................     139,906       158,735
Long-term debt and capital lease obligations, net of current
  portion...................................................     891,321       939,052
Other liabilities...........................................     339,411       344,763
Deferred income tax liability...............................      46,731        53,078
Stockholders' equity:
  Common Stock, $0.01 par value; 1,000 shares authorized;
     100 shares issued......................................          --            --
  Additional paid-in capital................................     305,504       304,305
  Retained earnings.........................................     128,235       139,662
  Accumulated other comprehensive income....................          42           494
                                                              ----------    ----------
          Total stockholders' equity........................     433,781       444,461
                                                              ----------    ----------
          Total liabilities and stockholders' equity........  $1,851,150    $1,940,089
                                                              ==========    ==========
</Table>

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
                                        3
<PAGE>

                        ATLAS AIR, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<Table>
<Caption>
                                                               THREE MONTHS ENDED
                                                                   MARCH 31,
                                                              --------------------
                                                                2002       2001
                                                              --------   ---------
<S>                                                           <C>        <C>
Operating activities:
  Net loss..................................................  $(11,071)  $  (1,582)
  Adjustments to reconcile net loss to net cash used in
     operating activities:
     Depreciation and amortization..........................    21,307      20,186
     Provision for doubtful accounts........................    10,826       5,245
     Amortization of debt issuance costs and lease financing
      gains and losses......................................     1,140      (2,513)
     Change in fair value of interest rate swap.............    (1,368)      4,583
     Disposition of property and equipment..................        --     (14,929)
     Loss on joint venture investment.......................       385          --
     Deferred income taxes..................................    (6,347)    (13,499)
     Changes in operating assets and liabilities:
       Accounts receivable and other........................    (5,375)     15,575
       Deposits and other...................................    (1,631)       (423)
       Accounts payable and accrued expenses................   (54,323)    (76,318)
       Income tax payable...................................    (1,060)    (28,359)
                                                              --------   ---------
          Net cash used in operating activities.............   (47,517)    (92,034)
Investing activities:
  Purchase of property and equipment........................   (13,542)    (66,291)
  Proceeds from sale of property and equipment..............        --      53,887
  Purchase of investments...................................   (15,067)    (37,021)
  Maturity of investments...................................     5,830      37,573
                                                              --------   ---------
          Net cash used in investing activities.............   (22,779)    (11,852)
Financing activities:
  Issuance of treasury stock................................        --         407
  Principal payments on long term debt and capital lease
     obligations............................................   (15,378)    (54,616)
  Debt issuance costs and deferred lease costs..............        --      (1,788)
                                                              --------   ---------
          Net cash used in financing activities.............   (15,378)    (55,997)
                                                              --------   ---------
Net decrease in cash........................................   (85,674)   (159,883)
Cash and cash equivalents at beginning of period............   199,270     493,723
                                                              --------   ---------
Cash and cash equivalents at end of period..................  $113,596   $ 333,840
                                                              ========   =========
</Table>

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
                                        4
<PAGE>

                        ATLAS AIR, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.  UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The accompanying unaudited condensed consolidated financial statements of
Atlas Air, Inc. (Atlas Air or the Company) have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, these financial statements contain all
adjustments, consisting of normal recurring accruals, necessary to present
fairly the financial position, results of operations and cash flows for the
periods indicated. The Company's 2002 results continue to be adversely impacted
by the current global economic recession, exacerbated by the September 11, 2001
terrorist attacks. Results of operations for the periods presented herein are
not necessarily indicative of results of operations for the entire year. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2001 (2001 Form 10-K). Certain amounts from 2001 have
been reclassified to conform with the 2002 presentation.

2.  RECENTLY ISSUED ACCOUNTING STANDARDS

     In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible Assets". These standards revise the rules related to the accounting
for business combinations, goodwill and other intangible assets. SFAS No. 141
requires that all business combinations initiated after June 30, 2001 be
accounted for using the purchase accounting method. SFAS No. 142 states that
goodwill is no longer subject to amortization over its useful life. Rather,
goodwill is subject to at least annual assessment for impairment and is to be
written down to its fair value only if the carrying amount is greater than the
fair value. In addition, intangible assets should be separately recognized if
the benefit of the intangible asset is obtained through contractual or other
legal rights, or if the intangible asset can be sold, transferred, licensed,
rented or exchanged, regardless of the acquirer's intent to do so. The Company
has not yet determined what the impact of SFAS No. 142 will be on the results of
operations or financial position of the Company.

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". This standard addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The standard requires
recognition of the fair value of a liability for an asset retirement obligation
in the period in which it is incurred and is effective for financial statements
issued for fiscal years beginning after June 15, 2002. Management is currently
assessing the impact of this pronouncement, particularly as it relates to leased
aircraft, and does not expect it to have a material impact on the Company's
financial position or results of operations.

     In August 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment
or Disposal of Long-Lived Assets". This standard addresses financial accounting
and reporting for the impairment of long-lived assets and of long-lived assets
to be disposed of. This Statement supercedes SFAS No. 121 "Accounting for the
Impairment of Long-Lived Assets and of Long-Lived Assets to be Disposed of", and
the accounting and reporting provisions of APB Opinion No. 30 "Reporting the
Results of Operations -- Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions", for the disposal of a segment of a business (as previously
defined in that Opinion). The Company adopted this pronouncement on January 1,
2002. The impact of adopting SFAS No. 144 had no effect on the results of
operations or financial position of the Company.

3.  INVESTMENTS

     The Company invests excess cash in various available-for-sale securities as
defined in SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities". SFAS No. 115 requires investments in
                                        5
<PAGE>
                        ATLAS AIR, INC. AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

debt and equity securities classified as available for sale be measured at fair
market value and unrealized gains and losses recorded as a component of other
comprehensive income. These securities were classified as held to maturity as of
March 31, 2002. The following table sets forth the aggregate fair market value,
book value (amortized/accreted cost) and unrealized gains/losses by major
security type as of March 31, 2002 and December 31, 2001 (in thousands):

<Table>
<Caption>
                                                        FAIR
                                                       MARKET                 UNREALIZED
SECURITY TYPE                                          VALUE     BOOK VALUE   GAIN (LOSS)
-------------                                         --------   ----------   -----------
<S>                                                   <C>        <C>          <C>
MARCH 31, 2002:
Cash and short term investments:
  Asset backed securities...........................  $  2,234    $  2,225       $  9
  Money market funds................................    27,225      27,225         --
  Corporate bonds...................................    37,070      37,120        (50)
  Certificates of deposit...........................     4,503       4,503         --
  Commercial paper..................................    31,286      31,277          9
  Euro bonds........................................    12,395      12,347         48
  Market auction preferreds.........................    15,500      15,500         --
  Municipal bonds...................................    37,150      37,150         --
  Corporate notes...................................    13,233      13,177         56
  Taxable auction securities........................     3,000       3,000         --
  US Government agencies............................     9,042       9,022         20
  Cash and overnight investments....................    42,829      42,829         --
                                                      --------    --------       ----
          Total cash and short term investments.....  $235,467    $235,375       $ 92
                                                      ========    ========       ====
Other investments:
  Guaranteed investment contracts (included in
     Deposits and other)............................  $ 42,554    $ 42,554       $ --
                                                      ========    ========       ====
DECEMBER 31, 2001:
Cash and short term investments:
  Asset backed securities...........................  $  2,266    $  2,248       $ 18
  Money market funds................................    15,032      15,027          5
  Corporate bonds...................................    43,303      43,153        150
  Certificates of deposit...........................     4,490       4,490         --
  Commercial paper..................................    35,275      34,982        293
  Euro bonds........................................    14,982      14,888         94
  Market auction preferreds.........................    15,513      15,513         --
  Municipal bonds...................................    22,025      22,025         --
  Corporate notes...................................    18,557      18,398        159
  Taxable auction securities........................     3,005       3,005         --
  US Government agencies............................    17,105      17,042         63
  Cash and overnight investments....................   120,351     120,351         --
                                                      --------    --------       ----
          Total cash and short term investments.....  $311,904    $311,122       $782
                                                      ========    ========       ====
Other investments:
  Guaranteed investment contracts (included in
     Deposits and other)............................  $ 41,100    $ 41,100       $ --
                                                      ========    ========       ====
</Table>

                                        6
<PAGE>
                        ATLAS AIR, INC. AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Accrued interest on investments held at March 31, 2002 was approximately
$2.0 million. Accrued interest on investments held at December 31, 2001 was
approximately $1.9 million. Interest earned on these investments and related
maturities is reinvested in similar securities.

4.  COMMITMENTS AND CONTINGENCIES

  BOEING PURCHASE AGREEMENT

     In June 1997, Atlas Air entered into the Boeing Purchase Agreement to
purchase 10 new Boeing 747-400 freighter aircraft with options for 10 additional
aircraft, all to be powered by GE engines. In February 1999, Atlas Air exercised
options for two additional aircraft that were delivered in 2000, and in October
2000 Atlas Air exercised options for four additional aircraft for delivery in
2002. As a result of Atlas Air being a large purchaser of Boeing 747-400
freighter aircraft, it was able to negotiate from Boeing and GE a significant
discount off the aggregate list price for the 16 Boeing 747-400 freighter
aircraft, four installed engines per aircraft and additional spare engines. In
addition, Atlas Air obtained certain ancillary products and services at
advantageous prices.

     During 2001, Atlas Air and Boeing agreed to amend the delivery dates of the
2002 deliveries whereby three aircraft are scheduled for delivery in 2002 and
one aircraft in late 2003. With respect to the three aircraft now scheduled for
delivery in 2002, Atlas Air is currently negotiating with Boeing terms of an
operating lease financing for all three aircraft, and is discussing revised
delivery dates in order to defer delivery as late into the year as possible.
Atlas Air is also pursuing other financing sources for these aircraft. The
inability to secure financing for the Boeing 747-400 deliveries could result in
a default under the Boeing Purchase Agreement, which would permit Boeing to
accelerate payments due under the Boeing Purchase Agreement. Such acceleration
would cause a default in covenants of certain of the Company's indebtedness
which would permit the lenders to accelerate payment of a significant portion of
all indebtedness, which event would have a material adverse effect on the
Company's financial position and results of operations.

     The Boeing Purchase Agreement requires that Atlas Air pay pre-delivery
deposits to Boeing prior to the delivery date of each Boeing 747-400 freighter
aircraft in order to secure delivery of the Boeing 747-400 freighter aircraft
and to defray a portion of the manufacturing costs. Based on the current
expected firm aircraft delivery schedule, Atlas Air expects the maximum total
amount of pre-delivery deposits at any time outstanding will be approximately
$204.9 million for the four aircraft to be delivered in 2002 and 2003. Upon each
delivery, Boeing refunds Atlas Air the pre-delivery deposits associated with the
delivered Boeing 747-400 freighter aircraft. In addition, the Boeing Purchase
Agreement provides for a deferral of a portion of the pre-delivery deposits for
which Atlas Air accrues and pays interest quarterly at 6-month LIBOR, plus 2.0%.
As of March 31, 2002, there was $128.7 million of deferred aircraft obligations
included in other liabilities, and the combined interest rate was approximately
4.35%. The Company expects to make additional pre-delivery deposits of
approximately $15.6 million during the remainder of 2002.

5. RECAPITALIZATION OF ATLAS AIR, INC.

     In February 2001, the Company announced the formation of a holding company,
Atlas Air Worldwide Holdings, Inc. Atlas Air, Inc. became a wholly owned
subsidiary of the new entity. The holding company restructuring was accomplished
through a merger under Section 251(g) of the Delaware General Corporation Law
pursuant to which all stockholders of Atlas Air, Inc. at the effective time of
the merger became stockholders of the new holding company. The new holding
company trades under the same NYSE symbol "CGO," with the same CUSIP numbers
Atlas Air traded under previously. The charter and by-laws of the new holding
company are substantially the same as the charter and by-laws of Atlas Air and
the directors of the holding company are the same as the current directors of
Atlas Air. Pursuant to the recapitalization, there has been a change in the
shareholders' equity of Atlas Air, Inc. The authorized shares of Atlas Air, Inc.
were reduced from 50,000,000 to 1,000, and the issued shares were reduced from
38,227,757 to 100. All of the

                                        7
<PAGE>
                        ATLAS AIR, INC. AND SUBSIDIARIES

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

issued shares of Atlas Air, Inc. are now held by Atlas Air Worldwide Holdings,
Inc. All options issued by Atlas that were outstanding at the date of the
recapitalization were transferred to AAWH.

6.  SUBSEQUENT EVENT

     On April 26, 2002, the Company announced that it had selected Ernst &
Young, LLP as its new independent auditor. That firm has replaced Arthur
Andersen, LLP, which had served as the Company's previous independent auditor
since 1994.

                                        8
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OPERATING STATISTICS

<Table>
<S>                                                           <C>      <C>
Block Hours
  Total Atlas...............................................  23,189   28,776
     ACMI services..........................................      67%      89%
     Hub services...........................................      12%      --
     Charter services and other services....................      21%      11%
Operating Aircraft at end of period*........................      31       37
</Table>

---------------

* Operating aircraft do not include grounded and held for sale B747-200's.

RESULTS OF OPERATIONS

     Atlas Air's net loss for the first quarter of 2002 was $11.1 million
compared to a net loss of $1.6 million in the same period of 2001. The operating
loss for the first quarter of 2002 was $.5 million, compared to operating income
of $15.4 million in the first quarter of 2001. The Company's 2002 results
continue to be adversely impacted by the current global economic recession,
exacerbated by the September 11, 2001 terrorist attacks.

     The cargo operations of our airline customers are seasonal in nature, with
peak activity typically occurring in the second half of the year, and with a
significant decline occurring in the first quarter. This decline in cargo
traffic is largely due to the decrease in shipping that occurs following the
December and January holiday seasons associated with the celebration of
Christmas and the Chinese New Year. Certain customers have, in the past, elected
to use that period of the year to exercise their contractual options to cancel a
limited number (generally not more than 5% per year) of guaranteed hours with
us, and are expected to continue to do so in the future. As a result, our
revenues typically decline in the first quarter of the year as our contractual
aircraft utilization level temporarily decreases. We seek to schedule, to the
extent possible, our major aircraft maintenance activities during this period to
take advantage of any unutilized aircraft time.

OPERATING REVENUE

     Total operating revenues for the quarter ended March 31, 2002 decreased to
$151.0 million from $180.3 million for the same period in 2001, or approximately
16%. Total block hours for the first quarter of 2002 were 23,189 compared to
28,776 for the same period in 2001, a decrease of approximately 19%.

     The operating revenue mix has changed substantially in the first quarter of
2002 as compared to the first quarter of 2001. Contract services revenue for the
quarter ended March 31, 2002 declined 32.6% to $108.2 million as compared to
$160.6 million last year. This revenue decline is due largely to the expiration
of ACMI contracts during the past year which have not been renewed. Charter
service revenues for the first quarter of 2002 increased $37.0 million from last
year due largely to the US Military (AMC) charter flight activity resulting from
the United States response to the September 11, 2001 terrorist attacks. AMC
charter flight revenue totaled $31.0 million for the first quarter 2002.

     Other revenues for the quarter ended March 31, 2002 declined to $2.6
million as compared to $16.6 million for the same period last year primarily due
to one-time revenues in the first quarter of 2001.

     In the first quarter of 2001, the Company recorded a one-time charge of
approximately $1.6 million, net of applicable tax benefit of approximately $.9
million, associated with the recording of the fair value of an interest rate
swap in accordance with the adoption of SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities." In addition, as a result of SFAS No. 133
adoption, the Company recorded a non-cash, pre-tax charge of $2.1 million for
changes in the fair value of its derivative instrument.

OPERATING EXPENSES

     Principal operating expenses include salaries, wages, and benefits;
aircraft rents; fuel cost for non-ACMI activities such as charter flights;
maintenance; ground handling and airport fees; depreciation and amortiza-

                                        9
<PAGE>

tion; and other expenses. Total operating expenses for the quarter ended March
31, 2002 decreased to $151.5 million from $164.9 million for the same period in
2001, or approximately 8%.

     Salaries, wages and benefits decreased approximately 11% to $26.8 million
in the first quarter of 2002 compared to $30.2 million in 2001,due to the
reduction in workforce and pilot furloughs in the second quarter of 2001.

     In the first quarter of 2001, the Company recognized an expense of $22.8
million related to a profit sharing settlement, which restored profit sharing
payments to pilots and flight crew members retroactive to April 1999. The
settlement includes 2001 amounts.

     Aircraft rents were $31.8 million in the first quarter of 2002 compared to
$31.4 million in the same period of 2001, or an increase of approximately 1%. No
new aircraft were added to the Atlas fleet during the first quarter of 2002.

     Aircraft fuel expense increased to $7.1 million for the first quarter of
2002 from $2.8 million for the first quarter of 2001. This increase was
primarily due to the US military charter flight activities.

     Maintenance, materials and repair cost increased approximately 22% to $35.8
million for the first quarter of 2002 from $29.4 million for the first quarter
of 2001. This was due to higher engine maintenance expenses for our B747-400
aircraft in 2002.

     Ground handling and airport fees increased to $6.5 million in the first
quarter of 2002, compared to $4.0 million in the first quarter of 2001, due to
the increase in AMC charter flying.

     Depreciation and amortization expense increased to $21.3 million in the
first quarter of 2002 from $20.2 million in the same period of 2001, due to
additional capital expenditures made during the quarter.

     Other operating expenses include insurance costs, pilot travel, training
and meal expenses, as well as travel expenses for non-crew members and other
miscellaneous operating costs. Other operating expenses decreased to $22.2
million in the first quarter of 2002 from $24.2 million in the same period of
2001, or approximately 8%, due to the reduction in workforce and pilot furloughs
in the second quarter of 2001.

OTHER INCOME (EXPENSE)

     Interest income for the first quarter of 2002 was $3.3 million compared to
$7.6 million for the same period of 2001, primarily due to decreases in the
amount of funds available for investing. Interest expense decreased to $24.6
million for the first quarter of 2002 from $25.4 million for the first quarter
of 2001, or approximately 3%, due to lower debt levels. The change in fair value
adjustment of the interest rate swap from December 31, 2001 to March 31, 2002
was $1.4 million, as compared to a charge of $2.1 million for the first quarter
of 2001.

INCOME TAXES

     Pursuant to the provisions of SFAS No. 109, "Accounting for Income Taxes,"
we have recorded a tax benefit based on tax rates in effect during the period.
Accordingly, we recorded a tax benefit at the rate of 37.0% during the first
quarter of both 2002 and 2001. Due to significant capital costs, which are
depreciated at an accelerated rate for tax purposes, a significant portion of
our tax provision in these periods is deferred. Income tax expense for the first
quarter of 2001 was positively affected through our qualification for the newly
enacted Extraterritorial Income Exclusion (EIE) tax regime. EIE allows us to
exclude 30% of our aircraft leasing income from taxable income where the leased
aircraft are used predominately outside the United States. The income exclusion
is effective for our qualifying revenue beginning on October 1, 2000, and the
estimated cumulative effect of this credit was recorded in the first quarter of
2001.

LIQUIDITY AND CAPITAL RESOURCES

     Our balance sheet reflected cash and cash equivalents and short-term
investments of $235.5 million and $311.9 million at March 31, 2002 and December
31, 2001, respectively. At March 31, 2002 we had working capital of $290.2
million compared to $352.2 million at December 31, 2001. The decrease in our
working

                                        10
<PAGE>

capital is largely a result of cash flows used by operating activities during
the quarter ended March 31, 2002, combined with cash payments made for capital
expenditures and debt repayments.

     Cash used in operations for the quarter ended March 31, 2002 was $47.5
million, compared to $92.0 million used in operations for the first quarter of
2001. Cash used in operations for the quarter ended March 31, 2002 was primarily
attributable to our net loss for the quarter adjusted for non-cash charges, and
decreases in our deferred tax liability, income taxes payable, accounts payable
and accrued expenses, as well as increases in accounts receivable and deposits
and other assets.

     Cash used in investing activities for the quarter ended March 31, 2002 was
$22.8 million, compared to $11.9 million for the first quarter of 2001. For the
quarter ended March 31, 2002, cash used in investing activities was comprised of
purchases of property and equipment of $13.5 million, and investment purchases
offset by maturities of short-term and long-term investments, of $9.2 million.
Short and long-term investment purchases primarily consist of commercial paper,
market auction preferreds, corporate notes, corporate bonds, and U.S. government
securities, and are all classified as held-to-maturity. For the quarter ended
March 31, 2001, cash used in investing activities was comprised of purchases of
property and equipment, net of proceeds from the sale of equipment, of $12.4
million offset by maturities of short-term and long-term investments, net of
purchases, of $0.5 million. Property and equipment purchases in 2001 comprised
primarily initial costs associated with the four new Boeing 747-400s expected to
be delivered in 2002 and 2003, and other capital improvement costs, including
those associated with our headquarters in Purchase, NY.

     In June 1997, Atlas Air entered into the Boeing Purchase Agreement to
purchase 10 new Boeing 747-400 freighter aircraft with options for 10 additional
aircraft, all to be powered by GE engines. In February 1999, Atlas Air exercised
options for two additional aircraft that were delivered in 2000, and in October
2000 Atlas Air exercised options for four additional aircraft for delivery in
2002. As a result of Atlas Air being a large purchaser of Boeing 747-400
freighter aircraft, it was able to negotiate from Boeing and GE a significant
discount off the aggregate list price for the 16 Boeing 747-400 freighter
aircraft, four installed engines per aircraft and additional spare engines. In
addition, Atlas Air obtained certain ancillary products and services at
advantageous prices.

     During 2001, Atlas Air and Boeing agreed to amend the delivery dates of the
2002 deliveries whereby three aircraft are scheduled for delivery in 2002 and
one aircraft in late 2003. With respect to the three aircraft now scheduled for
delivery in 2002, Atlas Air is currently negotiating with Boeing terms of an
operating lease financing for all three aircraft, and is discussing revised
delivery dates in order to defer delivery as late into the year as possible.
Atlas Air is also pursuing other financing sources for these aircraft. The
inability to secure financing for the Boeing 747-400 deliveries could result in
a default under the Boeing Purchase Agreement, which would permit Boeing to
accelerate payments due under the Boeing Purchase Agreement. Such acceleration
would cause a default in covenants of certain of the Company's indebtedness
which would permit the lenders to accelerate payment of a significant portion of
all indebtedness, which event would have a material adverse effect on the
Company's financial position and results of operations.

     The Boeing Purchase Agreement requires that Atlas Air pay pre-delivery
deposits to Boeing prior to the delivery date of each Boeing 747-400 freighter
aircraft in order to secure delivery of the Boeing 747-400 freighter aircraft
and to defray a portion of the manufacturing costs. Based on the current
expected firm aircraft delivery schedule, Atlas Air expects the maximum total
amount of pre-delivery deposits at any time outstanding will be approximately
$204.9 million for the four aircraft to be delivered in 2002 and 2003. Upon each
delivery, Boeing refunds Atlas Air the pre-delivery deposits associated with the
delivered Boeing 747-400 freighter aircraft. In addition, the Boeing Purchase
Agreement provides for a deferral of a portion of the pre-delivery deposits for
which Atlas Air accrues and pays interest quarterly at 6-month LIBOR, plus 2.0%.
As of March 31, 2002, there was $128.7 million of deferred aircraft obligations
included in other liabilities, and the combined interest rate was approximately
4.35%. The Company expects to make additional pre-delivery deposits of
approximately $15.6 million during the remainder of 2002.

     Cash used in financing activities for the quarter ended March 31, 2002 was
$15.4 million, compared to $56.0 million used in financing activities for the
first quarter of 2001. For the quarter ended March 31, 2002, cash used in
financing activities consisted primarily of principle payments on long-term debt
and capital lease
                                        11
<PAGE>

obligations of $15.4 million. For the quarter ended March 31, 2001, cash used in
financing activities consisted primarily of principal payments on long-term debt
and capital lease obligations of $54.6 million and debt issuance and deferred
lease costs of $1.8 million, offset by proceeds from the issuance of treasury
stock of $0.4 million.

     The Company is highly leveraged and has significant amounts of long-term
financial obligations (consisting of long-term debt and long-term lease
obligations) coming due over the next several years. At March 31, 2002,
outstanding long-term debt totaled approximately $1.0 billion and long-term
lease obligations were approximately $2.2 billion. The Company believes that
current cash balances and cash flow generated from operations are sufficient to
meet its anticipated liquidity needs for the next twelve months. To the extent
that operating cash flow and cash on hand prove insufficient to fund planned
operating activities, to service our debt and to meet our lease obligations, we
would be required to sell assets, obtain additional financing or engage in
refinancings to meet any such deficiency. There can be no assurance that any
such refinancing or that any such sale of assets or additional financing would
be effected on terms favorable to the Company.

     The following table summarizes our financial obligations for principal
payments under existing debt agreements and our lease obligations to be paid,
for the remainder of 2002 and thereafter (in thousands):

<Table>
<Caption>
                                           APRIL 1-
                                         DECEMBER 31,   2003 AND   2005 AND
                                             2002         2004       2006     THEREAFTER
                                         ------------   --------   --------   ----------
<S>                                      <C>            <C>        <C>        <C>
Enhanced Equipment Trust
  Certificates.........................    $ 1,862      $ 22,284   $ 16,702   $  137,362
AFL III Term Loan......................     18,255       108,182     86,712           --
Aircraft Credit Facility...............         --        47,675     20,432           --
Senior Notes...........................         --            --    284,475      152,853
Other..................................      9,464        49,683     23,291        9,401
Operating lease payments...............     70,822       294,074    276,469    1,449,688
Capital lease payments.................        958         3,197      1,460           --
</Table>

     Excluded from the above table are aircraft pre-delivery deposits for the
four Boeing 747-400 aircraft, which at March 31, 2002 totaled $204.9 million, of
which $76.2 million has been in cash and $128.7 million has been in the form of
deferred payments. We expect to finance the deferred obligation at the time we
take delivery of the Boeing 747-400 aircraft.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     Critical accounting policies are defined as those that are reflective of
significant judgments and uncertainties and potentially result in materially
different results under different assumptions and conditions. The Company has
prepared the accompanying financial statements in conformity with generally
accepted accounting principles, which require management to make estimates and
assumptions that affect the reported amounts in the financial statements and
accompanying notes. Actual results could differ from those estimates under
different assumptions or conditions. The Company has identified the following
critical accounting policies utilized in the preparation of these financial
statements.

  REVENUE RECOGNITION

     Under our ACMI contracts and charter services, revenue is recognized in the
financial statements for the actual block hours operated on behalf of a customer
during a calendar month, unless the actual block hours are less than the minimum
guaranteed hours under the contract, in which case revenue is recognized for
minimum guaranteed hours. Some contracts have a provision that allow customers
to make up the shortfall in the minimum guaranteed hours over specified future
months (measurement period). Under those contracts, revenue is recognized for
the actual block hours flown and recognition of the shortfall in minimum
guaranteed hours is deferred until either the shortfall has not been made up at
the end of the measurement period or there is a fair degree of certainty during
the measurement period that the cumulative shortfall will not be made up.

                                        12
<PAGE>

  PLANNED MAJOR MAINTENANCE ACTIVITIES

     A significant portion of scheduled and unscheduled maintenance is
contracted with three maintenance providers under long-term agreements pursuant
to which monthly reserve payments are made to the providers based on
flight-hours and such amounts are charged to expense currently. Other
maintenance and repairs are charged to expense as incurred, except for
significant B747-200 airframe overhauls which are capitalized and charged to
expense on a flight-hour basis and certain other major maintenance events which
are capitalized and amortized over the corresponding life.

  ACCOUNTS RECEIVABLE

     We are required to estimate the collectibility of our trade receivables. A
considerable amount of judgment is required in assessing the ultimate
realization of these receivables, including the current credit-worthiness of
each customer. Significant changes in required reserves have been recorded in
recent periods and may occur in the future due to the current market
environment.

OUTLOOK

     The Company's business has changed significantly over the past year. ACMI
contract revenues have declined as the global economic downturn has made
renewing maturing contracts, or finding replacement customers, very difficult.
Offsetting this decline are the inclusion of greatly increased charter revenues,
including U.S. Military charters, and the launch of all inclusive ACMI products
such as Fractional ACMI, Partial ACMI and the Atlas Air Partnership Program.

     Given its nature, the Company cannot assess the likelihood that U.S.
Military charter activity will continue at the level achieved since September
11, 2001. As described above, non-ACMI flying has also become a more prominent
revenue source, resulting in higher direct operating costs, including fuel
costs, ground handling, airport fees and other expenses. These non-ACMI services
are priced in such a way as to compensate the Company for these additional
costs.

     The Company expects future labor costs to increase. Atlas Air has been in
negotiations with the Airline Pilots Association (ALPA) since April 2000 for a
first collective bargaining agreement covering the Atlas Air pilots and flight
engineers. On January 25, 2002, the parties reached a tentative agreement on all
open issues. This tentative agreement was not ratified, and the parties
recommenced meetings in March 2002. In April 2002, ALPA presented the Company
with a limited number of issues to be resolved. Management continues to believe
that a contract can be reached with ALPA without a disruption of its operations.
While a final agreement is expected to result in increased labor costs due to
wage and benefit improvements, the Company does not believe that entering into
such agreement will materially diminish any productivity advantages it may
presently enjoy.

     The global economic slowdown that commenced in 2001 has resulted in a very
difficult global cargo market. In 2001, world cargo shipments fell approximately
10% and, in effect, returned to 1999 levels. The result has been the
underutilization of the Company's fleet of Boeing 747 cargo aircraft, including
six Boeing 747-200 aircraft being held for sale. A return to profitability on an
annual basis is dependent in large part upon a recovery in world cargo demand,
which, in turn, is dependent upon a sustained global economic recovery. Although
the Company expects losses to continue in the near term, given current demand
levels, it further expects near term losses to be offset by activity associated
with the traditional year-end peak in cargo demand as well as improvements in
demand characteristics associated with the emerging global economic recovery.

FORWARD-LOOKING STATEMENTS

     Certain statements included or incorporated by reference in this Form 10-Q
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act") and Section 2lE of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, levels of activity,
performance or achievements or industry results, to be materially

                                        13
<PAGE>

different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements.
Forward-looking statements represent the Company's expectations and beliefs
concerning future events, based on information available to the Company at the
date of this report. Some factors that could significantly impact net income,
revenues, expenses, and block hours include, without limitation, the adverse
impact of the September 11, 2001, terrorist attacks on the economy in general;
the demand for air cargo; the ability to reduce operating costs and conserve
financial resources, taking into account increased costs incurred or to be
incurred as a consequence of the attacks; the higher costs associated with new
airline security directives and any other increased regulation of air carriers;
the significantly higher costs of aircraft insurance coverage for future claims
caused by acts of war, terrorism, sabotage, hijacking and other similar perils,
and the extent to which such insurance will continue to be available; the
ability to raise financing in light of the September 11, 2001, events; the price
of jet fuel; actions of the U.S., foreign and local governments; the economic
environment of the airline industry and the economic environment in general. In
addition, forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may", "will", "expect", "intend",
"estimate", "anticipate", "believe", "confident", or "continue" or the negative
thereof or variations thereon or similar terminology. Although we believe that
the expectations reflected in such forward-looking statements are reasonable, we
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from our
expectations are disclosed under "Risk Factors" and elsewhere in the 2001 Form
10-K.

     To the extent that any of the statements contained herein relating to our
expectations, assumptions and other Company matters are forward-looking, they
are made in reliance upon the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are based on current expectations
that involve a number of uncertainties and risks that could cause actual results
to differ materially from those projected in the forward-looking statements,
including, but not limited to, risks associated with:

     - worldwide business and economic conditions;

     - product demand and the rate of growth in the air cargo industry;

     - the impact of competitors and competitive aircraft and aircraft financing
       availability;

     - the ability to attract and retain new and existing customers;

     - normalized aircraft operating costs and reliability;

     - management of growth and complying with FAA policies;

     - the continued productivity of our workforce;

     - dependence on key personnel; and

     - other regulatory requirements.

     As a result of the foregoing and other factors, no assurance can be given
as to our future results and achievements. Neither we nor any other person
assumes responsibility for the accuracy and completeness of these statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Our results of operations are impacted by changes in the price of aircraft
fuel. Aircraft fuel accounted for 1.7% of our operating expenses for the full
year 2001, and 4.8% of our operating expense for the first quarter of 2002. We
expect this expense to continue to grow as our charter service activities
comprise a larger portion of our business mix.

     Based on estimates covering our projected 2002 fuel consumption, a 10%
average increase in the price per gallon of aircraft fuel consumed over the next
nine months would increase our fuel expense by approximately $5.1 million.

     The Company may engage in future fuel hedging activities or enter into
aircraft fuel purchase commitments in order to manage the price risk and
utilization of its fuel costs.
                                        14
<PAGE>

                                    PART II.

                               OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     See Item 3 -- Legal Proceedings in Part I of the Company's Annual Report on
Form 10-K for the year ended December 31, 2001.

ITEMS 2, 3, 4, AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (A) Exhibits

     None.

     (B) Reports filed on Form 8-K

     The Company filed no Current Reports on Form 8-K during the quarter ended
March 31, 2002.

                                        15
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          ATLAS AIR, INC.
                                          (REGISTRANT)

                                          By:     /s/ DOUGLAS A. CARTY
                                            ------------------------------------
                                                      Douglas A. Carty
                                                   Senior Vice President
                                                and Chief Financial Officer

Date: May 15, 2002

                                        16