Amazon Air Cargo

Traderd

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Looks like Amazon wants to step up their air cargo ops.

http://www.seattletimes.com/business...argo-business/

Amazon.com is negotiating to lease 20 Boeing 767 jets for its own air delivery service, cargo industry executives have told The Seattle Times.

The online retail giant wants to build out its own cargo operations to avoid delays from carriers such as United Parcel Service, which have struggled to keep up with the rapid growth of e-commerce.

"Amazon is pretty fed up with the third-party carriers being a bottleneck to their growth," Robert W. Baird & Co. analyst Colin Sebastian said.

Leasing 20 jets would be a significant expansion of an Amazon trial operation out of Wilmington, Ohio, operated by ATSG on Amazon's behalf, sources said. A cargo industry source said Amazon expects to make a decision to go beyond the trial run and pull the trigger on a larger air cargo operation by the end of January.

He believes Amazon will eventually ship packages for other companies as well, putting it in direct competition with UPS, FedEx and others. Conceptually, other retailers could store goods in Amazon's warehouses, and then have Amazon manage the entire delivery operation. That would help Amazon keep the cargo planes loaded even after the holiday crush ends.
 

bafanguy

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"As an interim step, (Amazon) will probably have to sign up with somebody who already has 767s and can start the operation," the leasing executive said. "Then they'll have to move, probably from 2017 onward, into acquiring airplanes themselves."

Reasonable to assume they'll find plenty of pilots for their own fleet of airplanes starting in 2017 ?
 

Traderd

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"As an interim step, (Amazon) will probably have to sign up with somebody who already has 767s and can start the operation," the leasing executive said. "Then they'll have to move, probably from 2017 onward, into acquiring airplanes themselves."

Reasonable to assume they'll find plenty of pilots for their own fleet of airplanes starting in 2017 ?
The idea of finding pilots entered my mind but it wasn't specifically mentioned in the article. Mostly they seem concerned about air frame availability and the certificates. Seems a bit ambitious but then again, Bezos is an ambitious guy.

Given the stories about the Amazon work environment, wonder how the wonder boy would handle the unions?
 

bafanguy

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Pilots will come out of the woodwork. No sweat. :)
 

bafanguy

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Then again, Bezos is all about the automation thing....
Yep, but he may have met his match on that count if/when he gets in the airplane biz. :D
 

Traderd

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Yep, but he may have met his match on that count if/when he gets in the airplane biz. :D
I agree. And he might want to be careful about how deep he ventures into the world of unions. The dweebs in Downton Seattle might get a whiff.....
 

BH205

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20 to as many as 60 aircraft, per the Seattle Times.
 

bafanguy

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If the timeline is 2017 for getting their own airplanes, it won't be too long before they will show their hand. Hard to keep something like that a secret:

"Because Amazon doesn't have an Air Operator's Certificate, which it needs to fly airplanes commercially, it would have to turn to cargo-jet lessors to launch the business."

"'As an interim step, (Amazon) will probably have to sign up with somebody who already has 767s and can start the operation,' the leasing executive said. 'Then they'll have to move, probably from 2017 onward, into acquiring airplanes themselves.'"

http://www.seattletimes.com/business/amazon/amazon-in-talks-to-lease-20-jets-to-launch-air-cargo-business/
 
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75 Driver

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own certificate in days

They could buy an existing certificate, oh lets say Florida West from the Atlas/Southern deal and keep right on going.
 

Traderd

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The move to 20 is official

http://www.seattletimes.com/business...cargo-network/

"It's official. Giant retailer Amazon now has its own air cargo delivery operation. After running a secretive trial since last summer leasing five Boeing 767s from freight carrier Air Transport Services Group (ATSG) out of Wilmington, Ohio, Amazon has agreed to let ATSG run a dedicated air cargo network and expand the operation to 20 widebody cargo jets."

"There's been speculation that as Amazon invests more in transportation it might do away with third-party carriers Fedex and UPS, and perhaps even emerge as a competitor to those companies by providing transportation services itself. But in a recent earnings call a top Amazon executive said that the company sought to complement those services, not replace them."

"ATSG's shares closed Tuesday at $11.77 but jumped nearly 20 percent on the Amazon news to more than $14 per share in early trading Wednesday"
 

bafanguy

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Still not quite like owning their own airplanes but it's a step, I guess:

"ATSG subsidiary airlines ABX Air and ATI will operate the aircraft for Amazon and ATSG will also provide logistical services at its Wilmington hub."
 
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Traderd

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Still not quite like owning their own airplanes but it's a step, I guess:

"ATSG subsidiary airlines ABX Air and ATI will operate the aircraft for Amazon and ATSG will also provide logistical services at its Wilmington hub."
Yeah, outsourced as it were. Will be interesting if the "in house" guys can do a better job at on time than UPS, FedEx and the rest. Looks like the results from 5 were promising. They still have to get the product from the plane to the final destination. No idea if Amazon already has dedicated ground delivery assets.
 

bafanguy

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Maybe they ought to keep rentin' 'steada buyin' ?
 

bafanguy

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At least the ATI and ABX people must be happy with the plan so far. :D
 

bafanguy

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"ATSG subsidiary airlines ABX Air and ATI will operate the aircraft for Amazon, and ATSG will also provide logistical services in Wilmington."

Looks like a little hiring on the ABX side. Maybe also due to the Amazon deal ?:

http://www.abxair.com/careers/pilots.cfm
 

RiddleEagle18

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Two airlines under one holding company battling for the same flights. Where have I seen this model before.......


Good luck.


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