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Amazon mulls leasing 20 Boeing 767 freighter jets for delivery

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21 December 2015

Amazon.com Inc is considering leasing 20 Boeing Co 767 freighter jets to help gain greater control over its delivery methods and costs, Bloomberg reported citing a person familiar with the plans.

The tech-savvy retailer is looking to build up its cargo operations as consumers increasingly ordered online, especially during the holiday shopping season.

Owning planes and crew would help Amazon cut time and money getting goods to the doorsteps of customers and help keep its warehouses stocked with inventory.

Amazon had run into delays when the shippers it depended on till now, United Parcel Service Inc and FedEx Corp, had problems keeping up with the large and erratic orders around Christmas.

The Seattle Times reported on Thursday that Amazon was testing its own service and would decide early next year whether to proceed further.

The move could potentially hurt FedEx and UPS, the world's largest package delivery service. However, with Amazon starting with a small number of planes, it could take years to expand the operation to the point of having an impact on the two shipping giants.

Seattle-based Amazon shipped around 5.2 million packages a day during the peak holiday period, according to Satish Jindel, a logistics consultant in Sewickley, Pennsylvania.

''Amazon is pretty fed up with the third-party carriers being a bottleneck to their growth,'' The Seattle Times cited Robert W Baird & Co analyst Colin Sebastian .

According to a senior aircraft-leasing company executive familiar with Amazon's plans, the company had approached several cargo-aircraft lessors to line up the planes and had had talks with Air Transport Services Group (ATSG), Atlas Air and Kalitta Air, according to sources, though Kalitta chief executive Connie Kalitta denied he has talked with Amazon.

According to sources, leasing 20 jets and operated by ATSG on Amazon's behalf would amount to a significant expansion of Amazon's trial operation out of Wilmington, Ohio.

''I believe they are serious about looking at this,'' said the leasing executive, who asked not to be named because he may later do business with Amazon. ''They are not going to hang about,'' the newspaper added.





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