Amazon.com Services, Inc. recently announced an expansion of its partnership with Air Transport Services Group, Inc. (ATSG) by leasing an additional 10 Boeing 767s to support Amazon’s growth. Amazon previously leased 40 Boeing 767 freighter aircraft in 2016, 20 of those with ATSG, all of which are now flying serving customers in the Amazon Air network.
The 10 additional cargo planes will consist of Boeing 767-300 aircraft, will be operated on Amazon’s behalf by an ATSG airline and will join the air cargo operation over the next two years.
In conjunction with the new and amended commercial arrangements, Amazon will be granted warrant rights which, if exercised, would further expand its potential equity stake in ATSG. The arrangements also provide warrant incentives for Amazon to lease up to 17 additional cargo aircraft from ATSG, not including the ten 767 lease commitments for 2019-2020 and the twenty 767 aircraft ATSG currently provides to Amazon.
Amazon Air’s operation launched in 2016 supporting package delivery to the rapidly growing number of customers. With advanced algorithms and software used for capacity and route planning, the Amazon Air operation can transport hundreds of thousands of packages per day. In addition, with Amazon’s dedicated air network, Amazon is able to deliver packages to its customers faster – 40 aircraft are flying in and out of gateway operations at over 20 airports, making two-day shipping possible almost anywhere in the U.S.
“Our customers love massive selection and fast delivery, and the Amazon Air capacity we are building enables Prime delivery speeds for customers from Seattle, Washington to Miami, Florida,” said Dave Clark, Senior Vice President of Worldwide Operations at Amazon. “By expanding the Amazon Air network through our partnership with ATSG we’re able to ensure we have the capacity to quickly and efficiently deliver packages to customers for years to come.”
“We’re pleased to expand and extend our partnership in support of Amazon’s exceptional ability to provide reliable and fast delivery to its customers,” said Joe Hete, President and CEO of ATSG. “As the world’s leading source of customer-dedicated 767 cargo aircraft, we have the access to aircraft and are uniquely qualified to support Amazon for many years to come.”
Amazon will open a new Regional Air Hub in 2019 at Fort Worth Alliance Airport, and the Air Hub at the Cincinnati/Northern Kentucky International Airport will open in 2021. Recently, Amazon also announced a gateway operation to launch in Wilmington, OH, in 2019 as well as an expanded operation in Rockford, IL. Since its launch, Amazon’s air cargo operation has invested millions of dollars and created thousands of new jobs at locations across the U.S.
ATSG is a leading provider of aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. ATSG, through its leasing and airline subsidiaries, is the world's largest owner and operator of converted Boeing 767 freighter aircraft.