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To Speed Delivery, Amazon Will Lease 12 New Cargo Aircraft, Open New Regional Air Hubs

By Rhian Hunt – Jun 3, 2020 at 6:49PM

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The company’s fleet will expand by almost 20%.

More jets bearing the (AMZN -1.57%) logo will soon be crisscrossing the skies over America and abroad, according to a press release today in which the retail giant announced a significant expansion in its fleet. The leases of cargo modified Boeing 767-300 wide-body jetliners will increase the company's number of available aircraft from 70 to 82, a jump of slightly more than 17%.

The retailer is aiming to increase the capacity and speed of its delivery network as online order volume continues to explode. Powerfully rising demand is hampering Amazon's ability to fulfill orders rapidly, leading the company to throttle back availability of faster delivery methods and adopt other measures to try to ease the pressure on its supply chain.

Amazon Prime Air.

Image source: Amazon

Out of the dozen cargo jets newly leased from Air Transport Services Group (ATSG 0.04%) one is already in Amazon's hands and in use. The remaining 11 are earmarked to begin service in 2021. Amazon Global Air VP Sarah Rhoads remarked about the leases, "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."

Besides arranging for the rapid growth of its air fleet, Amazon is also planning to open three new air hubs, one in Florida, another in California, and a third in Kentucky. The Florida facility will start operating in summer 2020, with the other two hubs scheduled to open in 2021. The company has already opened a pair of hubs last month in Texas and Puerto Rico.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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