Amazon leased 20 cargo planes to build an internal delivery network

On this Wednesday, Amazon announced that it had signed a contract for the lease of twenty Boeing 767 - wide-body cargo aircraft, to guarantee the fulfillment of its “one-two day delivery” promises across the United States.

The deal was concluded with Air Transport Services Group (ATSG), an aircraft rental company based in Wilmington, Ohio. This will help Amazon to build an internal delivery network and rely less on third-party cargo carriers such as UPS and FedEx, businessinsider.com reports.
')
“We offer the largest selection, the best prices and ultra-fast delivery. And we are pleased to complement our existing network with a large ATSG carrier with their twenty aircraft, to ensure uninterrupted air cargo operations, ”said Dave Clark, Amazon’s senior vice president of customer service.

Now Amazon depends on companies such as UPS and FedEx, but analysts say that, according to rumors, it has long been planned to form its own air fleet, which will create a small threat to the logistics giants.

“This is negative news for FedEx and UPS, as Amazon is likely to abandon some high-yield services for express delivery of goods and mail from each of the respective networks. UPS is the number one company in the world in express delivery and logistics, which has its own airline, UPS Airlines, with a fleet of ~ 240 aircraft ships, while FedEx has about 370 aircraft, ”writes analyst John Barnes. FedEx and UPS fell by about 1.5 percent.

Amazon’s chief financial officer, Brian Olsawski, said the contract with ATSG would only be an addition to existing shippers, and would not replace them. But at the same time, there were documents in the media stating that in the future the sellers would refuse the services of DHL, UPS or FedEx and would work directly with Amazon.

Benchmark analyst Daniel Kurnos believes that it is too early to say whether Amazon’s decision to rent planes will change the “rules of the game”, but in the short term, such a decision is profitable, as the company will be able to fill in the gaps in its delivery network.

The leased aircraft will come into operation on April 1, the contract is signed for five to seven years. As part of the agreement, Amazon is entitled to purchase up to 19.9 percent of the ATSG shares for five years at a price of $ 9.73 per share. In turn, amid this news, ATSG shares soared almost 27 percent to a record high of $ 14.90.