The largest e-commerce company of the world Amazon.com is attempting to boost its fast-growing air cargo arm by adding a dozen air freight crafts to its fleet of aircrafts, the company announced on Tuesday. This is a part of the strategy of the company to expand and tighten control over the logistics business that it now owns.
The retailer said that its freight and logistics business company Amazon Air would take on rent 15 converted Boeing 737-800 freighters from the aircraft leasing unit of General Electric. These planes would add on to the five other of the narrow body cargo planes that the company had announced earlier this year would be added on to its fleet of aircrafts. It is expected that there would be about 70 planes in its fleet by 2021 in the stable of the Seattle-based company.
This announcement by Amazon assumes importance and relevance because it was less than two weeks ago that FedEx had said here would be no renewal of the express air shipping agreement that the company had with Amazon which is used to transport products sold on Amazon and Amazon’s own products. However last-mile delivery and international shipping would still be provided to Amazon by FedEx said, the courier giant had said.
Analysts and market experts believe that even before the non-continuance of the deal was annoiunce4d by FedEx, this latest deal for freight carrying planes was being carried on between the two companies – Amazon and General Electric.
Even though Amazon has been ramping up its own cargo hubs for deliveries, the e-retailer hires flying and maintaining of the planes for outsourcing to cargo airlines. There is an arrangement for flying and maintaining of an additional 15 Boeing 737 planes between Amazon and Atlas Air Worldwide Holdings, said the company that is one of its air freight contractors for Amazon Air. The following announcement of the deal by Amazon, there was a 4 per cent rise in the shares of Atlas which was greater than the rise in the broader market.
One of the converted Boeing 737 freighters hat is to be rented by Amazon was showcased by the e-retailer at the Paris Air Show this week. The aircrafts were painted light blue and was placed nestled among passenger carriers’ new airliners.
Currently Amazon makes use of 39 Boeing 767 aircrafts. In February, three people on board on one of the 767 freighters that are flown by and for Amazon, died after the plane crashed near Houston. According to a spokeswoman of the Amazon, 50 of the widebody freighters is expected to be flying for it by the end of 2020.
Amazon.com already is constructing a cargo hub in Cincinnati/Northern Kentucky International Airport which is slated to be operational in 2021 and is also considering the development and use of other air cargo centers this year at the Fort Worth Alliance Airport in Texas, Wilmington Air Park in southwestern Ohio and at the Chicago Rockford International Airport.
(Adapted from CNBC.com)