Amazon Makes First Aircraft Purchase to Expand Cargo Network
(Bloomberg) -- Amazon.com Inc. is buying 11 used Boeing 767-300 planes, the first time the online retail giant has purchased, rather than leased, aircraft for its fast-growing air cargo operation.
The company on Tuesday said it was buying seven aircraft from Delta Air Lines Inc. and four from WestJet Airlines Ltd. The WestJet aircraft are currently being converted from passenger to cargo use and will join Amazon’s fleet this year. The Delta jets will start flying routes in 2022. By the end of next year, Amazon expects to have more than 85 planes in service, a spokesperson said.
Seattle-based Amazon has rapidly expanded its air cargo operations in recent years, part of an effort to speed up delivery of packages to customers and supplement capacity from such carriers as United Parcel Service Inc.
As Amazon has built up its own delivery operation, which includes tens of thousands of cargo vans, the company has gone out of its way to highlight its continued reliance on other cargo companies. But Amazon already handles most of its own deliveries and has emerged as competitor to partners that only a few years ago delivered almost all of the company’s goods. FedEx Corp. in 2019 said it wouldn’t renew its air-delivery contract with Amazon.
A report last year estimated that Amazon’s fleet would likely grow to 200 aircraft in the coming years, rivaling UPS in size. Amazon operates mostly from smaller, regional airports close to its warehouses, routing packages between locations to accommodate quick delivery.
The deals announced Tuesday mark the second time Amazon has taken advantage of the depressed market for aircraft since the Covid-19 pandemic crippled air travel and sent many aircraft into storage. In June, Amazon said it was leasing an additional 12 planes. As with the leased planes, the newly purchased aircraft will be operated by contractors.
“Our goal is to continue delivering for customers across the U.S. in the way that they expect from Amazon, and purchasing our own aircraft is a natural next step toward that goal,” Sarah Rhoads, the vice president who runs Amazon’s air fleet, said in a statement. “Having a mix of both leased and owned aircraft in our growing fleet allows us to better manage our operations, which in turn helps us to keep pace in meeting our customer promises.”
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