Science/Tech

Amazon Planning to Lease Boeing Jets to Introduce Air Cargo

By Kanika Gupta | Update Date: Jan 04, 2016 02:54 PM EST

The e-commerce giant, Amazon.com, is negotiating a deal of 20 Boeing 767 jets for its in-house air delivery service, told the cargo-industry executives to The Seattle Times. The aim to build its own fleet of cargo operations is to eliminate delays from third-party carriers such as United Parcel Service, who have failed to keep up with the growth of online shopping industry. "Amazon is pretty fed up with the third-party carriers being a bottleneck to their growth," Robert W. Baird & Co. analyst Colin Sebastian said. This is the reason Amazon is considering handling its own delivery systems. A senior executive at the aircraft-leasing company who is apprised with the plans of the company said that Amazon has approached many cargo-aircraft lessors to arrange for the planes. The company is already in talks with Atlas Air, Kalitta Air and Air Transport Services Group (ATSG), said the sources. However, Connie Kalitta, Chief Executive of Kalitta has denied the news, said The Seattle Times

Sources added that by adding 20 jets to the trial operation of Amazon out of Wilmington, Ohio, the company will be able to expand its operations significantly. The jets will be operated by ATSG on behalf of Amazon. A source from the cargo-industry also said that Amazon may just take a step beyond the trial run and move straight to a large air-cargo operation by the end of January. "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." An analyst even considers that Amazon may deliver for other companies and will then be in direct competition of FedEx and UPS, a step that can drastically shift the packaging business, said Reuters.

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