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 releaseit 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 UPSInc.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.