Amazon, which now has its own fleet of cargo jets, has leased 20 Boeing 767 jets from Air Transportation Services Group (ATSG), a US-based air cargo company and included the operation of the aircraft by ATSG's airlines ABX Air and Air Transport International.
Under the deal, Amazon will lease the jets for five to seven years and is the first time that the company had publicly confirmed its air cargo program.
The online retailer's move into air cargo comes at a time when demand for air freight has been fairly low, with cheaper alternatives like ocean freight seeing increasing demand. Consequently, prices for cargo aircraft had fallen sharply, which made it a particularly good time for Amazon to lease its jets.
Amazon has moved into the freight business gradually and secretively. It recently acquired a small French delivery company, as also a stake in a UK delivery company. It also registered as an ocean freight forwarder; and acquired a fleet of semitrailers.
According to commentators, the public confirmation of the air cargo program was another sign that Amazon is looking to take on more fulfilment operations, most likely in an effort aimed at cutting its rapidly increasing delivery costs.
Under the ATSG deal Amazon also gets the option to purchase up to 19.9 per cent of ATSG's shares over a five year period, according to ATSG.
The aircraft would be leased to Amazon.com's Fulfillment Services division and would be operated by ATSG subsidiaries ABX Air and Air Transport International (ATI), ATSG said.
ABX operates 19 767-200Fs and eight 767-300ERFs, while ATI's fleet included two 767-200Fs, Flightglobal's Fleets Analyzer database revealed.
The deal calls for the aircraft to be leased for between five to seven years and operations by ATSG subsidiaries ABX Air and Air Transport International (ATI), ATSG said.
''We are excited to supplement out existing delivery network... by adding 20 planes to ensure air cargo capacity to support one- and two-day delivery,'' said Amazon's senior vice-president of worldwide operations and customer service Dave Clark in ATSG's release.