GECAS, Atlas Air Partner with Amazon to Expand Amazon Air Fleet

April 15, 2019, 07:29 AM

Filed Under: Aircraft

Related: Aircraft, Aircraft Leasing, Amazon, Aviation, Boeing, GE Capital Aviation Services

Amazon expanded its Amazon Air fleet by partnering with GE Capital Aviation Services to lease five Boeing 737-800 cargo aircraft. The five aircraft will be operated on Amazon’s behalf by Southern Air, an Atlas Air Worldwide Holdings, Inc. airline.

“We are excited to expand our Amazon Air fleet that enables ultra-fast, free shipping to customers. We have partnered with GE Capital Aviation Services (GECAS) to lease five Boeing 737-800 cargo aircraft. The five aircraft entering the Amazon air network will be operated on Amazon’s behalf by Southern Air, an Atlas Air Worldwide Holdings, Inc. airline,” an Amazon spokesperson confirmed in a statement.

Atlas Air Worldwide Holdings, Inc. (AAWW) entered into an Amended and Restated Air Transportation Services Agreement with Amazon.com Services, Inc., a subsidiary of Amazon.com, Inc. Southern Air, Inc. will provide crew, maintenance and insurance (CMI) services to Amazon using Boeing 737-800 series aircraft, AAWW stated in a filing with the Securities and Exchange Commission.

The Boeing 737-800 aircraft will be leased by Amazon from GECAS and subleased to Southern Air. The B737-800 CMI operations will be for a term of seven years, with an extension option by Amazon for a total term of 10 years. Five aircraft are scheduled to be placed into service in this fiscal year.

Amazon may, in its sole discretion, place up to 15 additional Boeing 737-800 aircraft into service with Southern Air by May 31, 2021, subject to Amazon’s confirmation that it will exercise such options no less than 240 days in advance of the scheduled delivery date for each aircraft, the SEC filing states.

In connection with the agreement, AAWW has granted Amazon incremental warrants that would allow it to potentially acquire up to a total of 39.9 percent (after the issuance) of AAWW’s common shares, an increase from up to 30.0 percent previously. The warrants relate to existing B767 activities and expected B737 CMI flying for Amazon, and they will also capture future growth of the relationship as Amazon may increase its business with AAWW.