Amazon Leases 20 More Jets for Growing Air Cargo Fleet
Amazon.com will lease 20 cargo planes from Atlas Air Worldwide Holdings, a deal that doubles the size of the tech and retail giant’s emerging air force.
The move comes just a few months after Amazon struck a similar deal with Air Cargo Transport Services Group, another air cargo carrier.
An Amazon spokeswoman said that the aircraft will be used to support one- and two-day delivery for the rapidly expanding Prime membership. The service costs $99 and offers shipping and other perks.
Atlas Air said in a May 5 press release it would operate the B767-300 aircraft for Amazon. The deal also gives Amazon an option to acquire up to a fifth of Atlas’ common shares over a period of five years at a price of $37.50 per share.
The latest deal signals the seriousness and scope of Amazon’s intention to go big in logistics as its fast-growing shipment needs exceed the capacity of traditional carriers such as UPS Inc. and FedEx Corp.
The strengthening of its transportation capabilities is all the more urgent as Amazon bets on quasi-immediate delivery services such as Prime Now to edge out brick-and-mortar retailers and other online competitors.
Atlas said the deal has room for growth as Amazon may acquire an additional 10% of the company over a period of seven years. The 10-year leases will begin this year and ramp up to full service in 2018.
“We are excited to begin a strategic long-term relationship with Amazon to support the continuing expansion of its e-commerce business and to enhance its customer delivery capabilities,” Atlas CEO William Flynn said in a statement. “We appreciate Amazon’s confidence in our capabilities, global scale and operating excellence.”
Atlas shares jumped 27% on the news, trading at $48.70.
