Amazon announces purchase of 11 new aircraft, in move to expand transportation fleet

Seattle-based global e-commerce titan Amazon announced yesterday that it has taken significant steps to expand its growing transportation fleet, purchasing 11 Boeing 767-300 aircraft. This marks the first time the company has purchased aircraft, as it has traditionally procured airfreight capacity through leases.

The company said that seven aircraft were purchased from Delta, with the remaining four from WestJet, adding that these aircraft will be part of Amazon’s network by 2022. 

“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,” said Sarah Rhoads, Vice President of Amazon Global Air, 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.”

Amazon Air’s fleet expansion comes at a time when customers are relying on fast, free shipping more than ever, noted an industry observer, adding that these fleet additions will ensure added capacity in Amazon Air’s network for years to come. What’s more, the observer noted that Amazon is constantly assessing its transportation fleet and network to determine what it needs to support fast, free shipping for customers.

Company officials said that the four aircraft purchased from WestJet in March are currently undergoing passenger to cargo conversion and will join Amazon Air’s network in 2021, and the seven aircraft from Delta will enter its air cargo network in 2022.

“These fleet additions will ensure added capacity in Amazon Air’s network for years to come,” Amazon said. “The company will continue to rely on third-party carriers to operate these new aircraft.”

Jerry Hempstead, president of Hempstead Consulting, told LM that this development is another example of Amazon being Amazon.

“Because of COVID-19 substantially reducing the number of travelers, airlines have taken down aircraft to rationalize their networks,” he said. “The parked planes just eat up cash. So, the airlines have a chance to move them off their balance sheets so they can replace them with new more fuel-efficient planes. Therefore, there are real ‘buys’ on hardware. Originally Amazon went to third parties like ATSG [and Atlas Air] to acquire the planes and provide the crews to fly them. Now Amazon is taking a more cost-efficient tact and picking up planes on the cheap, then outsourcing the modification and the piloting of the planes. Amazon has not been shy in publicly stating its intentions to build out its fleet and its hub network. Amazon isn’t done building its fleet.” 

Last June, Amazon said it is leasing 12 Boeing 767-300 converted cargo aircraft from ATSG as part of an initiative to meet changing customer needs through the investment in ways to provide fast and free delivery.

Company officials said that the addition of these 12 aircraft join its existing fleet of 70 aircraft and brings its total network to more than 80, with one of the new aircraft coming to Amazon Air cargo operations in May and the other 11 scheduled to be delivered in 2021.

And they added that the timing of these additional aircraft syncs up well with consumers ordering more goods online, due to the ongoing COVID-19 pandemic, while also noting that Amazon Air has played a “central role” during this time through the transporting of PPE supplies, not only for Amazon staffers but also frontline health workers and relief organizations throughout the U.S.

In September, various reports indicated Amazon purchased a Boeing 767 aircraft, marking a shift from Amazon’s longstanding tradition of leasing aircraft from Air Transport Services Group (ATSG), to operate its air cargo network to serve United States-based customers, and Atlas Air Worldwide Holdings, whom provides air cargo services to support Amazon’s package deliveries to its customers.

A May 2020 report issued by the Chaddick Institute for Metropolitan Development at Chicago-based DePaul University observed that Amazon Air is focused on increasing its air cargo presence in various ways, including:

• putting more emphasis on cargo-only airports than most other package-shipment providers;
• becoming more oriented toward daytime flights and point-to-point routes than FedEx and UPS; -expanding its fleet to 70 airplanes by 2021 and could grow to 200 planes in 7-8 years;
• making Cincinnati (CVG), Chicago Rockford, Ontario, Tampa, and Wilmington (OH) focal points; and
• creating a CVG megahub that greatly boosts its potential to be a multi-purpose delivery provider