FORM 10-Q
                                
                                
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                                
[ x ]     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934

                     For the quarterly period ended June 30, 1997

[   ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934
                                
                                
                     Commission File Number
                             0-25732
                                
                                
                         ATLAS AIR, INC.
     (Exact name of registrant as specified in its charter)



        Delaware                                     84-1207329
(State of other jurisdiction of         (IRS Employer Identification No.)
incorporation or organization)
                                
                                
                                
            538 Commons Drive, Golden, Colorado         80401
    (Address of principal executive offices)         (Zip Code)
                                
                                
                         (303) 526-5050
      (Registrant's telephone number, including area code)



Indicated 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.

               [ x ]   Yes         [   ]   No

As of August 8, 1997 the Registrant had 22,450,229 shares of $.01
par value Common Stock outstanding.

<PAGE>

                ATLAS AIR, INC. AND SUBSIDIARIES
                                
                                
                              INDEX
                                                                 
                                                                 
                                                                 
                                                                      Page
PART I.   FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

     Consolidated Balance Sheets-
        June 30, 1997 and December 31, 1996                            3

     Consolidated Statements of Operations-
        Quarter and Six Months Ended June 30, 1997 and 1996            4

     Consolidated Statements of Cash Flows-
        Six Months Ended June 30, 1997 and 1996                        5

     Notes to Consolidated Financial Statements                        6

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                          12


PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K                            22

          Signatures                                                  23


<PAGE>
<TABLE>
                        ATLAS AIR, INC. AND SUBSIDIARIES
                                        
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)
<CAPTION>
                                                                            June 30,       December 31,
                                                                              1997             1996
                                                                          (Unaudited)     
<S>                                                                       <C>                <C>
                                ASSETS
Current assets:                                                                                        
     Cash and cash equivalents                                            $    9,568         $    9,793
     Short-term investments                                                   80,355            114,870
     Accounts receivable, net and other                                       48,985             49,603
          Total current assets                                               138,908            174,266

Property and equipment:
     Flight equipment                                                        816,970            638,630
     Other                                                                     6,487              3,933
                                                                             823,457            642,563
     Less accumulated depreciation                                           (74,476)           (58,293)
     Net property and equipment                                              748,981            584,270

Other assets:
     Debt issuance costs                                                      12,567             12,382
     Deposits                                                                  1,305              2,789
                                                                              13,872             15,171
               Total assets                                               $  901,761         $  773,707
                                                                                                       
                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current portion of long-term debt                                    $   37,311         $   21,561
     Accounts payable and accrued expenses                                    65,635             47,763
     Income tax payable                                                          836              6,267
          Total current liabilities                                          103,782             75,591

Long-term debt, net of current portion                                       552,570            462,868
Deferred income tax payable                                                   25,016             22,875
Commitments and contingencies (Note 5)                                                                 

Stockholders' equity:
     Preferred Stock, $1 par value; 10,000,000 shares                             --                 --
       authorized; no shares issued                                                                    
     Common Stock, $0.01 par value; 50,000,000 shares                                                  
       authorized; 22,450,229 shares issued                                      225                225
     Additional paid-in capital                                              172,841            172,841
     Retained earnings                                                        47,488             39,543
     Treasury Stock, at cost; 5,182 and 5,850 shares, respectively              (161)              (236)
          Total stockholders' equity                                         220,393            212,373
               Total liabilities and stockholders' equity                 $  901,761         $  773,707
                                                                                        
   The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
                        ATLAS AIR, INC. AND SUBSIDIARIES
                                        
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)


<CAPTION>
                                                          Quarter Ended                  Six Months Ended
                                                            June 30,                         June 30,

                                                       1997            1996            1997            1996
<S>                                                <C>            <C>               <C>             <C>
Revenues:
     Contract services                             $   86,978     $   68,177        $ 163,795       $ 123,987
     Scheduled services                                 3,428          2,159            6,680           2,573
     Charters and other                                 3,496          2,278            5,476           4,703
          Total operating revenues                     93,902         72,614          175,951         131,263
                                                                                                             
Operating expenses:                                                                                          
     Flight crew salaries and benefits                  7,129          5,879           13,947          10,866
     Other flight-related expenses                      7,355          6,931           13,722          12,095
     Maintenance                                       31,684         17,654           55,011          32,380
     Aircraft and engine rentals                        7,709          5,777           15,485          11,673
     Fuel and ground handling                           3,949          3,024            7,128           4,248
     Depreciation and amortization                      9,696          5,210           19,174          10,093
     Other                                              9,934          5,472           17,896          11,831
     Write-off of capital investment and other         27,100             --           27,100              --
          Total operating expenses                    104,556         49,947          169,463          93,186

Operating income (loss)                               (10,654)        22,667            6,488          38,077

Other income (expense):
     Interest income                                    1,582          1,605            3,491           2,751
     Interest expense                                 (12,490)        (8,587)         (23,647)        (15,450)
                                                      (10,908)        (6,982)         (20,156)        (12,699)
Income (loss) before income taxes                     (21,562)        15,685          (13,668)         25,378
Provision (benefit) for income taxes                    7,870         (5,648)           4,989          (9,138)
Income (loss) before extraordinary item               (13,692)        10,037           (8,679)         16,240
                                                                                                             
Extraordinary item:                                                                                          
     Gain from extinguishment of debt, net of                                                                
        applicable taxes of $9,622                     16,740             --           16,740              --

Net income                                         $    3,048     $   10,037        $   8,061       $  16,240
                                                                                                             
Earnings per common share:                                                                                   
     Income (loss) before extraordinary item       $    (0.61)    $     0.47        $   (0.39)      $    0.79
                                                                        
     Extraordinary item                                  0.75             --             0.75              --
     Net income per common share                   $     0.14     $     0.47        $    0.36       $    0.79
                                                                        
                                                                                                              
Weighted average common shares outstanding             22,450         21,425           22,450          20,556
                                                                                                             
 The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>


                        ATLAS AIR, INC. AND SUBSIDIARIES
                                        
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<CAPTION>
                                                                 Six Months Ended
                                                                     June 30,
                                                                 1997           1996
<S>                                                          <C>           <C>
Operating activities:
Net income                                                   $    8,061    $    16,240
Adjustments to reconcile net income to net cash provided                              
   by operating activities:                                                           
     Depreciation and amortization                               19,861         10,093
     Amortization of debt issuance cost                           1,530            894
     Gain on sale of property and equipment                      (1,366)            --
     Write-off of capital investment and other                   27,100             --
     Change in deferred income tax payable                        2,141          6,284
     Extraordinary gain                                         (26,362)            --
     Changes in operating assets and liabilities:                                     
       Accounts receivable and other                             (9,335)       (12,546)
       Deposits                                                   1,484           (180)
       Accounts payable and accrued expenses                      7,022          5,909
       Income tax payable                                        (5,431)         2,312
                                                                                      
          Net cash provided by operating activities              24,705         29,006
                                                                                      
Investment activities:                                                                
Purchase of property and equipment                             (193,244)      (116,277)
Sale of property and equipment                                    3,750             --
Purchase of short-term investments                              (81,008)      (108,803)
Maturity of short-term investments                              115,523         10,000
          Net cash used in investing activities                (154,979)      (215,080)
                                                                                      
Financing activities:                                                                 
Issuance of Common Stock                                             --        105,645
Purchase of Treasury Stock                                         (368)          (562)
Issuance of Treasury Stock                                          327            203
Borrowings on notes payable                                     372,483         50,396
Principal payments on notes payable                            (237,031)       (10,210)
Debt issuance costs                                              (5,362)        (5,812)
          Net cash provided by financing activities             130,049        139,660
                                                                                      
Net decrease in cash                                               (225)       (46,414)
Cash and cash equivalents at beginning of period                  9,793         96,990
Cash and cash equivalents at end of period                   $    9,568    $    50,576
                                                                           
   The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


<PAGE>

                ATLAS AIR, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (Unaudited)
                                
                                
                                
1.   Unaudited Consolidated Financial Statements

     In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting only of normal recurring items) necessary to present
fairly the financial position of Atlas Air, Inc. and its wholly-
owned subsidiaries (collectively, the "Company") as of June 30,
1997 and the results of operations and cash flows for the periods
presented.  Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to the Securities and Exchange Commission's
rules and regulations.  The results of operations for the periods
presented are not necessarily indicative of the results to be
expected for the full year.  Management believes the disclosures
made are adequate to ensure that the information is not
misleading, and recommends that these financial statements be
read in conjunction with the Company's December 31, 1996 audited
financial statements.

2.   Reclassifications

     Certain prior year amounts have been reclassified to conform
to current year presentation.

3.   Recently Issued Accounting Standard

     In February, 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards ("SFAS") No.
128 "Earnings per Share."  The purpose of SFAS No. 128 is to
simplify the computation of earnings per share ("EPS") and to
make the U.S. standard for computing EPS more compatible with the
EPS standards of other countries and with that of the
International Accounting Standards Committee.  The effective date
for the application of SFAS No. 128 for both interim and annual
periods is after December 15, 1997.  Earlier application is not
permitted.  The Company does not expect the application of SFAS
No. 128 to have a material impact on its EPS calculation.

4.   Short-Term Investments

     Proceeds from the secondary public offering of the Company's
Common Stock in May 1996, plus additional funds, were invested in
various held-to-maturity securities, as defined in SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities," which requires investments in debt securities to be
classified as held-to-maturity and measured at amortized cost in
the statement of financial position only if the reporting
enterprise has the positive intent and ability to hold those
securities to maturity.  The following table sets forth the
aggregate fair value, gross unrealized holding gains, gross
unrealized holding losses, and amortized/accreted cost basis by
major security type as of June 30, 1997 (in thousands):

<TABLE>
<CAPTION>
                                               Gross          Gross            
                              Aggregate      Unrealized     Unrealized     (Amortization)
       Security Type         Fair Value       Holding        Holding          Accretion
                                               Gains          Losses

<S>                           <C>             <C>            <C>             <C>
Commercial Paper              $    19,992     $    -         $    8          $    (3)
Medium Term Notes                  21,935         13              6               15
U.S. Government Agencies           24,084          2             20              (87)
Corporate Notes                     6,224          0              1               24
Corporate Bonds                     2,002          -              0                2
Foreign Debt Securities             5,050          -              7               37
     Totals                   $    79,287     $   15         $   42          $   (12)

</TABLE>

In addition, there was $1.0 million of accrued interest on Short-
Term Investments at June 30, 1997.  Interest earned on these
investments and maturities of these investments are reinvested in
similar securities.

5.   Commitments and Contingencies

     In November 1994, Boeing issued Nacelle Strut Modification
Service Bulletins which have been converted into Directives by
the FAA.  Thirteen of the Company's 747-200 aircraft would have
to be brought into compliance with such Directives within the
next three years at an estimated aggregate cost of approximately
$6.5 million.  As part of the FAA's overall aging aircraft
program, it has issued Directives requiring certain additional
aircraft modifications to be accomplished prior to the aircraft
reaching 20,000 cycles.  The average cycle time for the Company's
15 747-200 aircraft in service (excluding the aircraft leased
from Federal Express) is 12,000 cycles and the average cycles
operated per year is 800 cycles.  The Company estimates that the
modification costs per aircraft will range between $2 million and
$3 million.  Between now and the year 2000, only one aircraft is
expected to reach the 20,000 cycle limit and the entire current
fleet will require modification prior to the year 2009.  Prior to
acquiring used 747-200 aircraft, the Company requires the seller
to demonstrate that such aircraft are in compliance with all
Directives as of the purchase date.  At the same time, the
Company examines all Directives that are known to apply to such
aircraft at a future date.  The Company's freighter conversion
program incorporates any and all Directives compliance work that
would otherwise have been required prior to the next major
maintenance event in order to minimize unscheduled maintenance.
Other Directives have been issued that require inspections and
minor modifications to Boeing 747-200 aircraft.  It is possible
that additional Service Bulletins or Directives applicable to the
types of aircraft included in the Company's fleet could be issued
in the future.  The cost of compliance with such Directives
cannot be estimated, but could be substantial.  It is possible
that additional Service Bulletins or Directives applicable to the
types of aircraft included in the Company's fleet could be issued
in the future.  The cost of compliance with such Directives
cannot currently be estimated, but could be substantial.

     In January 1996, the Company entered into a contract with
Langdon Asset Management, Inc. for the purpose of acquiring six
Boeing 747-200 passenger aircraft and certain spare engines and
spare parts from Thai Airways International Public Company
Limited ("Thai Airways").  The average cost of the six aircraft,
including conversion costs from passenger to freighter
configuration by The Boeing Company ("Boeing"), is expected to
approximate $45 million.  The first of these aircraft was placed
into service by the Company at the end of September 1996. The
Company obtained financing from Finova Capital Corporation for
approximately 80% of the cost of this aircraft.  In August and
September 1996, the second and third aircraft acquired from Thai
Airways were delivered to Boeing for conversion into freighter
configuration.  These aircraft were re-delivered to the Company
and placed into service by the Company in the fourth quarter of
1996 and the end of the first quarter of 1997, respectively.  The
fourth aircraft acquired from Thai Airways was purchased in
November 1996 and delivered to Boeing for conversion into
freighter configuration for re-delivery to the Company in the
second quarter of 1997.  Financing for the acquisition and
conversion of the second, third and fourth aircraft acquired from
Thai Airways was secured through the Aircraft Credit Facility
(see Note 3 of the Company's December 31, 1996 audited financial
statements).  The fifth and sixth aircraft acquired from Thai
Airways were purchased from Thai Airways in April 1997 and
delivered to Boeing for conversion into freighter configuration
for which financing was also secured through the Aircraft Credit
Facility.  The fifth aircraft acquired from Thai Airways was
placed into service by the Company in August 1997 and the sixth
aircraft is currently undergoing modification at Boeing and is
expected to be delivered to the Company for service during the
fourth quarter of 1997.

     In March 1996, the Company entered into an agreement with
Federal Express Corporation ("FedEx") to lease five 747-200
freighter aircraft, plus spare engines.  The first four aircraft
sub-leased from FedEx were delivered to the Company between March
1996 and September 1996.  The fifth aircraft was delivered to the
Company in April 1997 and was subsequently placed in service as a
spare aircraft.  Each aircraft subleased from FedEx has a lease
term ending in January 1998.  The lease rate is $450,000 per
month per aircraft.  While the Company does not intend to renew
these leases, it is currently discussing a short-term extension
in order to operate the aircraft through the peak cargo service
season and be able to perform necessary maintenance in the first
quarter of 1998 prior to returning the aircraft.  In addition,
the Company purchased on January 2, 1997 a Boeing 747 simulator
from FedEx for a purchase price of $2.1 million.

     In January 1997, the Company extended two of its existing
contracts with China Airlines Ltd., which were not otherwise due
for renewal until 1998.  Each of the contracts was extended for a
further three years into the year 2001.  In addition, the Company
entered into three long-term ACMI contracts with South American
carriers, two with Fast Air Carrier, S.A. and one with Lineas
Aereas Suramericanas, S.A., for 1997 through 1999.

     In February 1997, the Company filed a complaint for
declaratory judgment in the Colorado District Court, Jefferson
County against Israel Aircraft Industries Ltd. ("IAI") for
mechanical problems the Company experienced with respect to the
aircraft the Company sub-leased from IAI.  The Company is seeking
approximately $1 million in damages against IAI to be set off by
the amount, if any, the Company owes IAI pursuant to the sub-
lease.  IAI had the case removed to the U.S. District Court,
District of Colorado in April 1997 and subsequently filed a
separate complaint against the Company in the U.S. District
Court, Eastern District of New York alleging damages of
approximately $9 million based on claims arising from the sub-
lease.  The Company intends to vigorously defend against all of
IAI's claims.

     In February 1997, the Company entered into the Second
Amended and Restated Credit Agreement with respect to its
existing Aircraft Credit Facility.  The purpose of the amendment
was to increase the revolving line from $175 million to $275
million for the purpose of acquiring additional aircraft,
including spare engines and modification costs associated with
cargo configuration, as necessary.  The Company commenced draw
downs under the additional $100 million facility in the second
quarter of 1997.

     In March 1997, the Company refinanced one of its aircraft
with Nationsbanc Leasing Corporation ("Nationsbanc").  This
aircraft was previously financed through the Aircraft Credit
Facility.  As such, this refinancing increases the availability
of funds under the Aircraft Credit Facility by approximately $25
million.  The Nationsbanc financing provides for a fixed interest
rate of 9.16% and a seven year term, extendible under certain
circumstances to ten years.

     In March 1997, Air Support International, Inc. ("ASI") filed
a complaint against the Company in the U.S. District Court,
Eastern District of New York alleging actual and punitive damages
of approximately $13.5 million arising from the Company's refusal
to pay commissions which ASI claims it is owed for allegedly
arranging certain ACMI contracts.  The Company intends to
vigorously defend against all of ASI's claims.

     In May 1997, the Company purchased one 747-200 aircraft from
Citicorp Investor Lease, Inc. ("Citicorp") which is currently on
lease to Philippine Airlines ("PAL").  The Company is currently
negotiating the termination of the lease with PAL following which
the aircraft will be modified from passenger to freighter
configuration by Boeing.  The aircraft was financed with funds
drawn under the Aircraft Credit Facility.

     In May 1997, Atlas Freighter Leasing, Inc. ("AFL"), a wholly-
owned subsidiary of the Company, entered into a $185 million term
loan facility (the "AFL Term Loan Facility"), with Bankers Trust
Company ("BTCo"), an affiliate of BT Securities Corporation,
acting as agent, to refinance six 747-200 aircraft previously
owned by the Company through another wholly-owned subsidiary of
the Company (the "AFL Transaction").  The proceeds of the AFL
Term Loan Facility were used to repay an existing term loan
facility for which the Company received a significant prepayment
incentive credit.  In addition, this refinancing allowed the
Company to reduce its overall indebtedness and the ongoing
interest expense associated with these aircraft.

     In June 1997, the Company entered into an agreement (the
"Boeing Purchase Contract") with Boeing to purchase 10 new
747-400 freighter aircraft.  The 747-400 freighter aircraft are
currently scheduled to be delivered one each in May, June, August
and September 1998; April and July 1999; February, March and
August 2000; and April 2001.  The Boeing Purchase Contract also
provides the Company with an option to purchase up to 10 additional
747-400 freighter aircraft for delivery from 1999 through 2002.
As a result of the Company being the largest purchaser of 747-400
freighter aircraft to date, it was able to negotiate from Boeing
a significant discount off the aggregate list price of $1.7 billion
for the 10 747-400 freighter aircraft, four installed engines per
aircraft and five spare engines.  The Boeing Purchase Contract
requires that the Company pay deposits to Boeing prior to the
delivery date of each 747-400 freighter aircraft (the "Pre-Delivery
Deposits") in order to secure delivery of the 747-400 freighter
aircraft and to defray a portion of the manufacturing costs.  The
Company expects that the maximum total amount of Pre-Delivery Deposits
at any time outstanding will be approximately $125 million,
approximately $81 million of which has been paid by the Company
as of August 1997 from short-term indebtedness and available cash.

     The Company is in negotiations with a lender for a $25 million
revolving credit facility for general working capital purposes.

6.  Write-off of Capital Investment and Other

     In conjunction with the June 1997 agreement with Boeing to
purchase 10 new 747-400 freighter aircraft, the Company assessed
the economic viability of renewing the sub-leases with FedEx of five
747-200 freighter aircraft.  Based on the results of this assessment
in the second quarter of 1997, the Company decided not to renew these
sub-leases which terminate in the first quarter of 1998.  The Company
wrote-off its remaining investment in the five FedEx aircraft and
established certain other reserves.

     The impact of the various largely non-recurring charges was
$27.1 million, or $17.2 million on an after-tax basis, which
comprised write-offs of various leasehold improvements associated
with the Company's sub-leases with FedEx of the five 747-200
aircraft, which would otherwise be expensed over the second half
of 1997 and reserves for costs necessary to return the aircraft
upon the termination of the sub-leases.  In addition, the Company
established reserves primarily related to certain customers and
vendors for out-of-period items for which the Company is currently
in negotiations.  In addition, the reserves include estimates for
litigation costs and other costs not expected to re-occur.

7.  Extraordinary item

     The Company recorded an extraordinary after-tax gain of
$16.7 million, resulting from the receipt of a prepayment
incentive credit associated with the refinancing of six 747-200
aircraft representing approximately $228 million of indebtedness
in the second quarter of 1997.  This refinancing allowed the
Company to reduce its overall indebtedness and the ongoing
interest expenses associated with these aircraft.  (See Note 5)

8.  Subsequent Events

     In August 1997, the Company completed an offering (the
"Offering") of a total principal amount of $150,000,000 of its 10
3/4% Senior Notes due 2005.  The proceeds from the Offering will
be used to, among other things, repay short-term indebtedness
incurred by the Company to previously make Pre-Delivery Deposits
and to make additional Pre-Delivery Deposits as they become due.
As the 747-400 freighter aircraft are purchased upon delivery and
Pre-Delivery Deposits are refunded by Boeing to the Company, the
proceeds from the Offering may be used to fund a portion of the
total purchase price of the 747-400 freighter aircraft or,
alternatively, for general corporate purposes by the Company.
Additional third-party financing will be required at the time of
delivery of each of the 747-400 freighter aircraft.  The Company
intends to secure such permanent financing from a combination of
aircraft financing transactions, including long-term fixed-rate
equipment trust certificates, leveraged lease financing, other
long-term purchase money security financing or debt or equity
financing.  There can be no assurance that the Company will be
able to obtain sufficient financing to fund the purchase of the
747-400 freighter aircraft, or if such financing is available,
that it will be available on commercially reasonable terms.

     Shortly after the Offering, the Company intends to complete
certain refinancing and restructuring transactions (the
"Refinancings") with respect to certain of the Company's existing
indebtedness in order to provide the Company with greater
financial flexibility in anticipation of the financing
requirements for the acquisition of the 747-400 freighter
aircraft by, among other things, extending maturities of certain
indebtedness, reducing interest expense and making certain
covenants less restrictive.  The Refinancings are expected to
include (i) a new, approximately $183 million seven-year
amortizing term loan facility (the "AFL II Term Loan Facility")
to a new wholly-owned subsidiary of the Company to be formed for
the sole purpose of owning and leasing four 747-200 aircraft and
eight spare engines currently owned by the Company and financed
by the Aircraft Credit Facility; (ii) an amendment and
restatement of the Aircraft Credit Facility to (a) provide for a
new two-year revolving period followed by a three-year amortizing
term loan period, (b) provide for a reduction in the credit
spread for borrowings based on financial performance and (c) make
the financial covenants less restrictive to facilitate the
upcoming financings required in connection with the acquisition
of the 747-400 freighter aircraft; and (iii) an amendment to the
financial covenants of a $185 million term loan facility entered
into in May 1997 by Atlas Freighter Leasing, Inc., a wholly-owned
subsidiary of the Company, to facilitate the financings required
in connection with the acquisition of the 747-400 freighter
aircraft.  The Company has a commitment from Bankers Trust
Company ("BTCo"), an affiliate of BT Securities Corporation, the
initial purchaser in the Offering, and Goldman, Sachs & Co.
("Goldman Sachs") to provide the AFL II Term Loan Facility.  BTCo
and Goldman Sachs have also made an additional commitment to
provide a portion of the amended and restated Aircraft Credit
Facility.  The Refinancings are not a condition to the completion
of the Offering and are not necessary for the Company to acquire
the 747-400 freighter aircraft.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Results of Operations

     The Company, through its predecessors, began its operations
on April 22, 1992 with one Boeing 747-200 in the service of China
Airlines Ltd. and expanded its operations to a second Boeing 747-200
in November 1992.  These operations were undertaken on behalf of the
Company by another carrier utilizing pilot crews, dispatch
facilities, maintenance operations and other services provided by
such carrier.  As a result, the Company's operations prior to
1993 were primarily limited to aircraft leasing and start-up
activities.  The Company initiated cargo services under the name
of Atlas Air, Inc. in February 1993.  The Company's fleet
currently consists of 21 Boeing 747-200 aircraft in freighter
service, one 747-200 aircraft undergoing passenger to freighter
modification at Boeing and two 747-200 passenger aircraft under
lease to a third party.

     The cargo operations of the Company's airline customers are
seasonal in nature, with peak activity occurring traditionally in
the second half of the year, and with a significant decline
occurring in the first quarter.  This decline in cargo activity
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 of
the Company's 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 the Company, and are expected to continue
to do so in the future.  As a result, the Company's revenues
typically decline in the first quarter of the year as its
contractual aircraft utilization level temporarily decreases.
The Company seeks to schedule, to the extent possible, its major
aircraft maintenance activities during this period to take
advantage of any unutilized aircraft time.

     The aircraft acquisitions, lease arrangements and
modification schedule are described in Note 1 of the Company's
December 31, 1996 audited consolidated financial statements.  The
timing of when an aircraft enters the Company's fleet can affect
not only annual performance, but can make quarterly results
variable, thereby affecting the comparability of operations from
period to period.

     The table below sets forth selected financial and operating
data for the first and second quarters of 1997 and the four
quarters of the years ended December 31, 1996 and 1995 (dollars
in thousands).

<TABLE>
<CAPTION>
                                              1997                                       1996
                                ------------------------------------       ----------------------------------
                                  Cumu-         2nd          1st            Cumu-         2nd         1st
                                 lative       Quarter      Quarter          lative      Quarter     Quarter
<S>                             <C>          <C>           <C>             <C>          <C>         <C>
Total operating revenues        $ 175,951    $  93,902     $  82,049       $ 131,263    $ 72,614    $  58,649
Operating expenses                169,463      104,556        64,907          93,186      49,947       43,239
Operating income (loss)             6,488      (10,654)       17,142          38,077      22,667       15,410
Other income (expense)            (20,156)     (10,908)       (9,248)        (12,699)     (6,982)      (5,717)
Net income                          8,061        3,048         5,013          16,240      10,037        6,203
Block hours                        32,984       17,541        15,443          25,198      14,073       11,125
Average aircraft operated            18.4         19.5          17.2            12.4        14.0         10.8
Operating margin                      3.7%         (11)%        20.9%           29.0%       31.2%        26.3%

</TABLE>

<TABLE>
<CAPTION>
                                                               1996
                                     Cumu-        4th          3rd         2nd             1st
                                    lative      Quarter      Quarter      Quarter        Quarter
<S>                                <C>         <C>          <C>          <C>            <C>   
Total operating revenues           $ 315,659   $ 104,715    $ 79,681     $ 72,614       $ 58,649
Operating expenses                   227,596      74,775      59,635       49,947         43,239
Operating income                      88,063      29,940      20,046       22,667         15,410
Other income (expense)               (28,475)     (8,569)     (7,207)      (6,982)        (5,717)
Net income                            37,838      13,397       8,201       10,037          6,203
Block hours                           59,445      18,803      15,444       14,073         11,125
Average aircraft operated               14.7        18.4        15.4         14.0           10.8
Operating margin                        27.9%       28.6%       25.2%        31.2%          26.3%

</TABLE>

<TABLE>
<CAPTION>
                                                              1995
                                      Cumu-      4th           3rd          2nd          1st
                                     lative     Quarter      Quarter      Quarter      Quarter
<S>                                <C>          <C>          <C>          <C>          <C>
Total operating revenues           $ 171,267    $ 56,142     $ 47,769     $ 38,418     $ 28,938
Operating expenses                   128,593      39,982       34,844       28,370       25,397
Operating income                      42,674      16,160       12,925       10,048        3,541
Other income (expense)               (16,435)     (4,014)      (4,805)      (4,287)      (3,330)
Net income                            17,831       8,352        5,568        3,861           50
Block hours                           33,265      10,809        9,076        7,568        5,812
Average aircraft operated                7.7         9.4          8.2          6.9          6.1
Operating margin                        24.9%       28.8%        27.1%        26.2%        12.2%

</TABLE>

Operating Revenues and Results of Operations

     Total operating revenues for the quarter ended June 30, 1997
increased to $93.9 million compared to $72.6 million for the same
period in 1996, an increase of approximately 29%.  The average
number of aircraft in the Company's fleet during the second
quarter of 1997 was 19.5 compared to 14.0 during the same period
in 1996.  Total block hours for the second quarter of 1997 were
17,541 compared to 14,073 for the same period in 1996, an
increase of approximately 25%, principally reflecting the
increase in the size of the Company's fleet.  Revenue per block
hour increased by approximately 4% to $5,353 for the second
quarter of 1997 compared to $5,160 for the second quarter of
1996, primarily as a result of an increase in higher-yielding
charter operations.

     In the second quarter of 1997, the Company recorded a
largely non-cash charge to earnings of $27.1 million, which
included the write-off of the Company's remaining balance sheet
investment in the five aircraft sub-leased from FedEx, as well as
the establishment of certain reserves associated with costs
necessary to return the aircraft in the first quarter of 1998 and
other non-recurring items.  This resulted in an operating loss
for the second quarter of $10.7 million compared to operating
income of $22.7 million for the second quarter of 1996.
Excluding this charge, operating income for the second quarter of
1997 decreased approximately 27% to $16.4 million from $22.7
million for the second quarter of 1996, principally due to the
impact of maintenance costs associated with the aircraft sub-
leased from FedEx.  This charge equalled $17.2 million on an
after-tax basis and was virtually offset by the realization of an
extraordinary after-tax gain of $16.7 million in the second
quarter of 1997, resulting from the receipt of a prepayment
incentive credit associated with the refinancing of approximately
$228 million of indebtedness during the quarter.  Net income of
$10.0 million for the second quarter of 1996 declined to a net
income of $3.0 million for the second quarter of 1997.
     
     Total operating revenues for the six months ended June 30,
1997 were $176.0 million compared to $131.3 million for the year-
earlier period, an increase of approximately 34%.  The average
number of aircraft in the Company's fleet during the six months
ended June 30, 1997 was 18.4 compared to 12.4 during the same
period in 1996.  Total block hours for the first six months of
1997 were 32,984 compared to 25,198 for the same period in 1996,
an increase of approximately 31%, principally reflecting the
increase in the size of the Company's fleet.  Revenue per block
hour increased by approximately 2% to $5,334 for the first half
of 1997 compared to $5,209 for the year-earlier period, primarily
as a result of an increase in higher-yielding charter operations.
Operating income of $38.1 million for the first half of 1996
decreased to $6.5 million for the first half of 1997, primarily
due to the charge to earnings in the second quarter of 1997
discussed above.  Excluding this charge, operating income was
$33.6 million for the first half of 1997 compared to $38.1
million for the year-earlier period, or a decrease of
approximately 12%.  There were an average of 4.5 aircraft sub-
leased from FedEx operating in the 1997 period compared to an
average of 0.5 aircraft sub-leased from FedEx operating in the
1996 period, with respect to which maintenance costs are
substantially higher than for the rest of the Company's fleet.
In addition, the Company incurred $1.2 million of costs in the
first quarter of 1997 related to the return of two leased
aircraft to their respective lessors.  As discussed above for the
second quarter of 1997, the realization of an after-tax
extraordinary gain of  $16.7 million for the most part offset the
after-tax charge of $17.2 million with respect to the impact on
net income for the first half of 1997.  For the six months ended
June 30, 1997, net income was $8.1 million compared to $16.2
million for the year-earlier period.

Operating expenses

     The Company's principal operating expenses include flight
crew salaries and benefits; other flight-related expenses;
maintenance; aircraft and engine rentals; fuel costs and ground
handling; depreciation and amortization; and selling, general and
administrative expenses.

     Flight crew salaries and benefits include all such expenses
for the Company's pilot work force.  Flight crew salaries and
benefits increased to $7.1 million in the second quarter of 1997
compared to $5.9 million in the same period of 1996, due to
increases in the number of aircraft in the Company's fleet and
aircraft block hours.  While actual expense increased by
approximately 21% during the second quarter of 1997, on a block
hour basis this expense declined by 3% to $406 per block hour for
the second quarter of 1997 from $418 per block hour for the same
period in 1996.  For the first six months of 1997, actual expense
increased by approximately 28%, from $10.9 million to $13.9
million, but on a block hour basis declined to $423 per block
hour from $431 per block hour for the same period in 1996, or
approximately 2%.  These reductions of approximately 3% and 2%,
respectively, were due to increased efficiency in staffing levels
and scheduling resulting from the increased level of operations.

     Other flight-related expenses include hull and liability
insurance on the Company's fleet of Boeing 747-200 aircraft, crew
travel and meal expenses, initial and recurring crew training
costs and other expenses necessary to conduct its flight
operations.

     Other flight-related expenses increased to $7.4 million in
the second quarter of 1997 compared to $6.9 million in the second
quarter of 1996, and to $13.7 million in the six months ended
June 30, 1997  compared to $12.1 million in the six months ended
June 30, 1996, or approximately 6% and 13%, respectively, due
primarily to the larger fleet size.  This was partially offset by
a reduction in the Company's aircraft hull and liability
insurance rates based on its increased size and favorable
operating history.  As a result of this and other operating
efficiencies, on a block hour basis, other flight-related
expenses declined by approximately 7% to $419 per block hour for
the second quarter of 1997 compared to $449 per block hour for
the same period in 1996, and by approximately 13% to $416 per
block hour for the six months ended June 30, 1997 compared to
$480 per block hour for the same period in 1996.

     Maintenance expenses include all expenses related to the
upkeep of the aircraft, including maintenance, labor, parts,
supplies and maintenance reserves.  The costs of C Checks,
significant maintenance work every 18 months, and D checks, major
maintenance events, and engine overhauls not otherwise covered by
maintenance reserves are capitalized as they are incurred and
amortized over the life of the maintenance event.  In addition,
in January 1995 the Company contracted with KLM Royal Dutch
Airlines ("KLM") for a significant part of its regular
maintenance operations and support on a fixed cost per flight
hour basis.  Effective October 1996, certain aircraft engines
were additionally accepted into the GE engine maintenance
program, also on a fixed cost per flight hour basis, pursuant to
a 10 year maintenance agreement.

     Maintenance expense increased to $31.7 million in the second
quarter of 1997 from $17.7 million in the same period of 1996,
and to $55.0 million in the six months ended June 30, 1997 from
$32.4 million in the six months ended June 30, 1996, or
approximately 79% and 70%, respectively, partially due to the
increase in the Company's average fleet size and partially due to
the higher maintenance costs with respect to the aircraft sub-
leased from FedEx.  On a block hour basis, maintenance expense
increased by approximately 44% and 30%, respectively, primarily
due to higher maintenance costs associated with the aircraft sub-
leased from FedEx.

     Aircraft and engine rentals include the cost of leasing
aircraft and spare engines, as well as the cost of short-term
engine leases required to replace engines removed from the
Company's aircraft for either scheduled or unscheduled
maintenance and any related short-term replacement aircraft lease
costs.

     Aircraft and engine rentals were $7.7 million in the second
quarter of 1997 compared to $5.8 million in the same period of
1996, and were $15.5 million in the first half of 1997 compared
to $11.7 million in the first half of 1996, or an increase of
approximately 33% for both comparative periods.  During the
second quarter of 1997 and for the first half of 1997, the
Company leased one additional aircraft as compared to the year-
earlier periods.  Engine rentals were comparable for the same
year over year periods.

     Because of the nature of the Company's ACMI contracts with
its airline customers, under which the Company is responsible
only for the ownership cost and maintenance of the aircraft and
for supplying aircraft crews and insurance, the Company's airline
customers bear all other operating expenses, including fuel and
fuel servicing; marketing costs associated with obtaining cargo;
airport cargo handling; landing fees; ground handling; aircraft
push-back and de-icing services; and specific cargo and mail
insurance.  As a result, the Company incurs fuel and ground
handling expenses only when it operates on its own behalf, either
in scheduled services, for ad hoc charters or for ferry flights.
Fuel expenses for the Company's non-ACMI contract services
include both the direct cost of aircraft fuel as well as the cost
of delivering fuel into the aircraft.  Ground handling expenses
for non-ACMI contract service include the costs associated with
servicing the Company's aircraft at the various airports to which
it operates as well as other direct flight related costs.

     Fuel and ground handling costs increased to $3.9 million for
the second quarter of 1997 compared to $3.0 million for the
second quarter of 1996, and to $7.1 million for the six months
ended June 30, 1997 compared to $4.2 million for the six months
ended June 30, 1996, or approximately 31% and 68%, respectively.
This was due to the relative increase in scheduled service,
charter and other non-ACMI block hours to 626 block hours in the
second quarter of 1997 from 509 block hours in the year-earlier
period, and to 1,242 block hours for the first half of 1997 from
776 block hours in the first half of 1996.  In addition, fuel
costs have increased year over year for the same periods.

     Depreciation and amortization expense includes depreciation
on aircraft, spare parts and ground equipment, and the
amortization of capitalized major aircraft maintenance and engine
overhauls.

     Depreciation and amortization expense increased to $9.7
million in the second quarter of 1997 from $5.2 million in the
same period of 1996, and to $19.2 million in the first half of
1997 from $10.1 million in the first half of 1996, or
approximately 86% and 90%, respectively.  This increase reflects
an increase of approximately 50% in owned aircraft, approximately
100% in spare engines and an approximate four-fold increase in
spare parts for the second quarter of 1997 and for the first half
of 1997 over the same periods in 1996.  In addition, Other
Revenues include $0.4 million and $0.7 million of depreciation
for the second quarter of 1997 and the first half of 1997,
respectively, associated with the net lease of two aircraft which
are currently in passenger configuration.

     Other operating expenses include salaries, wages and
benefits for all employees other than pilots; accounting and
legal expenses; supplies; travel and meal expenses, excluding
those of the aircraft crews; commissions; and other miscellaneous
operating costs.

     Other operating expenses increased to $9.9 million in the
second quarter of 1997 from $5.5 million in the same period of
1996, and $17.9 million for the first half of 1997 from $11.8
million in the same period of 1996, or approximately 82% and 51%
respectively, reflecting the increase in the Company's
operations.  On a block hour basis, these expenses increased to
$566 per block hour in the second quarter of 1997 from $389 per
block hour in the same period of 1996, and to $543 per block hour
for the first half of 1997 from $470 in the same period of 1996,
or approximately 46% and 16%, respectively.  This increase in
cost was due primarily to additional personnel and other
resources necessary to properly manage the Company's increased
operations.

Other Income (Expense)

     Other income (expense) consists of interest income and
interest expense.  Interest income of $1.6 million for the second
quarter of 1997 was comparable to the same period in 1996,
primarily due to a comparable short-term investment level for
both periods.  Interest income of $3.5 million for the first six
months of 1997 increased from $2.8 million for the first six
months of 1996 relative to the increase in short-term investments
between the periods. Interest expense increased to $12.5 million
in the second quarter of 1997 from $8.6 million in the same
period of 1996, and to $23.6 million in the first half of 1997
from $15.5 million in the first half of 1996, or approximately
45% and 53%, respectively, primarily resulting from an increase
of approximately 50% in financed flight equipment between these
periods.

Income Taxes

     Pursuant to the provisions of SFAS No. 109 "Accounting for
Income Taxes," the Company has recorded a tax provision based on
tax rates in effect during the period.  Accordingly, the Company
accrued taxes at the rate of 36.5% during the second quarter and
the first half of 1997 and 36.0% during the second quarter and
first half of 1996.  Due to significant capital costs, which are
depreciated at an accelerated rate for tax purposes, a majority
of the Company's tax provision in these periods is deferred.

Seasonality

     The cargo operations of the Company's airline customers are
seasonal in nature, with peak activity occurring traditionally in
the second half of the year, and with a significant decline
occurring in the first quarter.  This decline in cargo activity
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 of
the Company's 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%) of cargo
flights with the Company, and are expected to continue to do so
in the future.  As a result, the Company's revenues typically
decline in the first quarter of the year as its minimum
contractual aircraft utilization level temporarily decreases.
The Company seeks to schedule, to the extent possible, its major
aircraft maintenance activities during this period to take
advantage of any unutilized aircraft time.

     In the first quarter of 1997, the Company's customers opted
to take the majority of their contractual cancellations, in
contrast to last year's first quarter, when very few
cancellations occurred.

Liquidity and Capital Resources

     At June 30, 1997, the Company had cash and cash equivalents
of approximately $9.6 million, short-term investments of
approximately $80.4 million and working capital of approximately
$35.1 million. During the first half of 1997, cash and cash
equivalents decreased approximately $0.2 million, principally
reflecting cash provided from operations of $24.7 million,
proceeds from equipment financings of $372.5 million and net
proceeds from the sale and purchase of short-term investments of
$34.5 million, substantially offset by the net sale and purchase
of investments in flight and other equipment of $189.5 million,
principal reductions of indebtedness of $237.0 million and debt
issuance costs of $5.4 million.
     
     In November 1994, Boeing issued Nacelle Strut Modification
Service Bulletins which have been converted into Directives by
the FAA. Thirteen of the Company's 747-200 aircraft will have to
be brought into compliance with such Directives within the next
three years at an estimated aggregate cost of approximately $6.5
million. As part of the FAA's overall aging aircraft program, it
has issued Directives requiring certain additional aircraft
modifications to be accomplished prior to the aircraft reaching
20,000 cycles. The average cycle time for the Company's 15 747-
200 aircraft in service (excluding the aircraft leased from
Federal Express) is 12,000 cycles and the average cycles operated
per year is 800 cycles. The Company estimates that the
modification costs per aircraft will range between $2 million and
$3 million. Between now and the year 2000, only one aircraft is
expected to reach the 20,000 cycle limit and the entire current
fleet will require modification prior to the year 2009. Prior to
acquiring used 747-200 aircraft, the Company requires the seller
to demonstrate that such aircraft are in compliance with all
Directives as of the purchase date. At the same time, the Company
examines all Directives that are known to apply to such aircraft
at a future date. The Company's freighter conversion program
incorporates any and all Directives compliance work that would
otherwise have been required prior to the next major maintenance
event in order to minimize unscheduled maintenance. Other
Directives have been issued that require inspections and minor
modifications to Boeing 747-200 aircraft. It is possible that
additional Service Bulletins or Directives applicable to the
types of aircraft included in the Company's fleet could be issued
in the future. The cost of compliance with such Directives cannot
currently be estimated, but could be substantial.

     In February 1997, the Aircraft Credit Facility was expanded
from $175 million to $275 million for the same purposes and under
substantially the same terms and conditions as the initial
facility. The revolving period and subsequent term loan period
for the additional $100 million are coterminous with the period
under the initial facility. Certain financial tests must be met
before each purchase of aircraft and related drawdown under the
facility. To date, the Company has met these tests. If in the
future, the Company cannot meet such tests because of the
difficult sequencing of aircraft acquisition, aircraft conversion
and customer contracts, the Company believes that other financing
sources would be available to the Company or the Company would
acquire aircraft using its internal cash or seek a waiver of any
necessary conditions. The Company commenced draw downs under the
additional $100 million facility in the second quarter of 1997.
As of August 7, 1997, the Company had $234 million outstanding
under the Aircraft Credit Facility.

     In addition, in March 1997, the Company refinanced one of
its aircraft with Nationsbanc Leasing Corporation
("Nationsbanc"). This aircraft was previously financed through
the Aircraft Credit Facility. As such, this refinancing increased
the availability of funds under the Aircraft Credit Facility by
approximately $25 million. The Nationsbanc financing provides for
a fixed interest rate of 9.16% and a seven year term, extendible
under certain circumstances to ten years.
     
     KLM has submitted invoices to the Company for the induction
of certain engines into its maintenance program and additional
invoices for certain services rendered aggregating approximately
$7.0 million. The Company disputes some of the charges reflected
in the invoices and believes that it owes less than the amount
invoiced by KLM. The Company is actively negotiating a resolution
of this matter.

     In May 1997, the Company acquired from Citicorp Investor
Lease, Inc. ("Citicorp") one 747-200 passenger aircraft for a
purchase price of $25 million, including two spare engines. In
connection with the purchase of the aircraft from Citicorp, the
Company agreed to assume Citicorp's lessor interest in the lease
of such aircraft to Philippine Airlines, Inc. ("PAL") for the
remainder of the lease term, which expires in June 1998. The
Company is currently negotiating with PAL for the early termination
of the lease and delivery to the Company of this aircraft (along
with a separate 747-200 passenger aircraft similarly acquired by
the Company in December 1996) for conversion to freighter
configuration, although there can be no assurances in that regard.
     
     In May 1997, Atlas Freighter Leasing, Inc. ("AFL"), a wholly-
owned subsidiary of the Company, entered into a $185 million term
loan facility (the "AFL Term Loan Facility"), with Bankers Trust
Company ("BTCo"), an affiliate of BT Securities Corporation,
acting as agent, to refinance six 747-200 aircraft previously
owned by the Company through another wholly-owned subsidiary of
the Company (the "AFL Transaction").  The proceeds of the AFL
Term Loan Facility were used to repay an existing term loan
facility for which the Company received a significant prepayment
incentive credit.  In addition, this refinancing allowed the
Company to reduce its overall indebtedness and the ongoing
interest expense associated with these aircraft.
     
     In June 1997, the Company entered into an agreement (the
"Boeing Purchase Contract") with Boeing to purchase 10 new 747-
400 freighter aircraft.  The 747-400 freighter aircraft are
currently scheduled to be delivered one each in May, June, August
and September 1998; April and July 1999; February, March and
August 2000; and April 2001. The Boeing Purchase Contract also
provides the Company with an option to purchase up to 10 additional
747-400 freighter aircraft for delivery from 1999 through 2002.  As
a result of the Company being the largest purchaser of 747-400
freighter aircraft to date, it was able to negotiate from Boeing a
significant discount off the aggregate list price of $1.7 billion
for the 10 747-400 freighter aircraft, four installed engines per
aircraft and five spare engines.  The Boeing Purchase Contract requires
that the Company pay deposits to Boeing prior to the delivery date of
each 747-400 freighter aircraft (the "Pre-Delivery Deposits") in order
to secure delivery of the 747-400 freighter aircraft and to defray a
portion of the manufacturing costs.  The Company expects that the maximum
total amount of Pre-Delivery Deposits at any time outstanding will be
approximately $125 million, approximately $81 million of which has
already been paid by the Company as of August 1997 from short-term
indebtedness and available cash.

     In August 1997, the Company completed an offering (the
"Offering") of a total principal amount of $150,000,000 of its 10
3/4% Senior Notes due 2005.  The proceeds from the Offering will
be used to, among other things, repay short-term indebtedness
incurred by the Company to previously make Pre-Delivery Deposits
and to make additional Pre-Delivery Deposits as they become due.
As the 747-400 freighter aircraft are purchased upon delivery and
Pre-Delivery Deposits are refunded by Boeing to the Company, the
proceeds from the Offering may be used to fund a portion of the
total purchase price of the 747-400 freighter aircraft or,
alternatively, for general corporate purposes by the Company.
Additional third-party financing will be required at the time of
delivery of each of the 747-400 freighter aircraft.  The Company
intends to secure such permanent financing from a combination of
aircraft financing transactions, including long-term fixed-rate
equipment trust certificates, leveraged lease financing, other
long-term purchase money security financing or debt or equity
financing.  There can be no assurance that the Company will be
able to obtain sufficient financing to fund the purchase of the
747-400 freighter aircraft, or if such financing is available,
that it will be available on commercially reasonable terms.  If
it is unable to do so, the Company could be required to modify
its expansion plans or to incur higher than anticipated financing
costs, which could have a material adverse effect on the Company.

     Shortly after the Offering, the Company intends to complete
certain refinancing and restructuring transactions (the
"Refinancings") with respect to certain of the Company's existing
indebtedness in order to provide the Company with greater
financial flexibility in anticipation of the financing
requirements for the acquisition of the 747-400 freighter
aircraft by, among other things, extending maturities of certain
indebtedness, reducing interest expense and making certain
covenants less restrictive.  The Refinancings are expected to
include (i) a new, approximately $183 million seven-year
amortizing term loan facility (the "AFL II Term Loan Facility")
to a new wholly-owned subsidiary of the Company to be formed for
the sole purpose of owning and leasing four 747-200 aircraft and
eight spare engines currently owned by the Company and financed
by the Aircraft Credit Facility; (ii) an amendment and
restatement of the Aircraft Credit Facility to (a) provide for a
new two-year revolving period followed by a three-year amortizing
term loan period, (b) provide for a reduction in the credit
spread for borrowings based on financial performance and (c) make
the financial covenants less restrictive to facilitate the
upcoming financings required in connection with the acquisition
of the 747-400 freighter aircraft; and (iii) an amendment to the
financial covenants of a $185 million term loan facility entered
into in May 1997 by Atlas Freighter Leasing, Inc., a wholly-owned
subsidiary of the Company, to facilitate the financings required
in connection with the acquisition of the 747-400 freighter
aircraft.  The Company has a commitment from Bankers Trust
Company ("BTCo"), an affiliate of BT Securities Corporation, the
initial purchaser in the Offering, and Goldman, Sachs & Co.
("Goldman Sachs") to provide the AFL II Term Loan Facility.  BTCo
and Goldman Sachs have also made an additional commitment to
provide a portion of the amended and restated Aircraft Credit
Facility.  The Refinancings are not a condition to the completion
of the Offering and are not necessary for the Company to acquire
the 747-400 freighter aircraft.

     Due to the contractual nature of the Company's business, the
Company's management does not consider its operations to be
highly working capital-intensive in nature. Because most of the
non-ACMI costs normally associated with operations are borne by
and directly paid for by the Company's customers, the Company
does not incur significant costs in advance of the receipt of
corresponding revenues. Moreover, ACMI costs, which are the
responsibility of the Company, are generally incurred on a
regular, periodic basis ranging from flight hours to months.
These costs are largely matched by revenue receipts, as the
Company's contracts require regular payments from its customers,
based upon current flight activity, generally every two to four
weeks. As a result, the Company has not in the past had a
requirement for a working capital facility.  The Company is in
negotiations with a lender for a $25 million revolving credit
facility for general working capital purposes.  

     The Company believes that cash on hand, the cash flow
generated from its operations and the proceeds from the May 1996
public offering of its common stock and the Offering, coupled
with availability under the Aircraft Credit Facility, will be
sufficient to meet its normal ongoing liquidity needs for 1997.

     From time to time the Company engages in discussions with
third parties regarding possible acquisitions of aircraft that
could expand the Company's operations. The Company is in
negotiations for the acquisition of additional aircraft,
principally for delivery to the Company in 1998 and beyond.
     
Forward-looking Information

     To the extent that any of the statements contained herein
relating to the Company's 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;
the continued productivity of its workforce; dependence on key
personnel; and regulatory matters.  For additional information
regarding these and other risk factors, reference is made to the
Company's Annual Report on Form 10-K for the year ended December
31, 1996.

<PAGE>

                   ATLAS AIR, INC. AND SUBSIDIARIES


                      PART II. OTHER INFORMATION



ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K


     a.         Exhibits

                Exhibit 27 - Financial Data Schedule

     b.         Reports filed on Form 8-K

                None.

<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)




Date:  August 12, 1997       By:  /s/ Richard H. Shuyler
                                  Richard H. Shuyler
                                  Senior Vice President - Finance
                                  Chief Financial Officer and
                                  Treasurer (Principal Accounting
                                  Officer)