Amazon.com's (AMZN +2.05%) air cargo ambitions are taking a new flight path after the e-commerce giant announced it was buying, not leasing, 11 used Boeing aircraft from Delta Air Lines and WestJet Airlines.
The purchase marks the first time Amazon has not leased any airplanes for its Prime fleet. It expects to have 85 planes in service by the end of next year.
Image source: Amazon.com.
On a wing and a prayer
Amazon leases most of its cargo aircraft through Air Transport Services Group, which provides the fleet with 767s, and Atlas Air Worldwide Holdings, which supplies 737s and 767s. Amazon has taken an ownership stake in both companies.
It also leased 15 737s through General Electric's GE Capital Aviation Services, but in September went off in another new direction that hinted at the purchases to come when it directly registered one of its aircraft under its own name. That plane was also from WestJet.
Under the new acquisition, Amazon will be getting Boeing 767-300 aircraft. Sarah Rhoads, vice president of Amazon Global Air said in a statement: "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. 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 has emerged as a major threat to FedEx and UPS. A recent study suggested the e-commerce leader could grow into a major aircraft carrier with as many as 200 planes in the next seven or eight years, at which time it would be close in size to UPS.
