Amazon announces plan to increase its aircraft fleet

Seattle-based global e-commerce giant Amazon announced late yesterday it is leasing 12 Boeing 767-300 converted cargo aircraft from Air Transport Services Group 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 last month 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.

What’s more, the company said it is also maintaining capacity for its regular cargo operations to make sure customers are receiving needed items, too. And an Amazon spokseperson told LM that the company is excited to expand its dedicated Amazon Air cargo network with the introduction of 12 leased planes to our existing fleet, adding it helps Amazon to further deliver on its goals of providing ultrafast, free delivery to its customers.

“Amazon Air is critical to ensuring fast delivery for our customers – both in the current environment we are facing, and beyond,” said Sarah Rhoads, Vice President of Amazon Global Air, in a statement. “During a time when so many of our customers rely on us to get what they need without leaving their homes, expanding our dedicated air network ensures we have the capacity to deliver what our customers want: great selection, low prices and fast shipping speeds.”

Amazon officials also noted that the company is opening up various air cargo operations across the country, including:

• new Regional Air Hubs at Lakeland Linder International Airport in Florida later this summer and at San Bernardino International Airport in 2021;
• the central Amazon Air Hub at the Cincinnati/Northern Kentucky International Airport in 2021; and
• in May, Amazon Air began Gateway operations at Austin-Bergstrom International Airport in Austin, Texas, and Luis Muñoz Marín International Airport in San Juan, Puerto Rico

The decision for Amazon to up its aircraft count does not come as a total surprise based on comments made on the company’s recent first quarter earnings call by Brian T. Olsavsky, Amazon Senior Vice President and Chief Financial Officer.

“There's always the importance of having attractive offerings in stock for customers, but usually the things you can count on—the cost structure, the ability to get products, your capacity for shipping and delivering, those are usually things that you can take for granted and in this quarter, you can't,” he said. “That's really where the uncertainty is driven.”

Industry analysts have been telling LM that moves like the one made today and others continue to position Amazon as a threat to UPS and FedEx.

“Estimates are that Amazon is currently doing about 25% of their own deliveries, and I believe that percentage will increase as Amazon takes more of its logistics operations in-house,” said John Haber, founder and CEO of Atlanta-based Spend Management Experts, in LM’s 2020 Parcel Express Roundtable, which was published in March.

Haber added that, in his opinion, Amazon’s goal is to not only control their own global supply chain, but to also provide logistics and transportation services to businesses similar to what they did with Amazon Web Services (AWS)—use it internally and then once perfected, sell it to others.