Having joined forces with Air Transport Services Group, the retail giant will now operate an air transport network in the US. Under the terms of the new contract, ATSG’s Cargo Aircraft Management will lease 20 767Fs for five to seven years, to be operated by ATSG’s airlines, ABX Air and Air Transport International; an arrangement which is fixed for five years. The agreement additionally incorporates gateway and logistics services provided by ATSG’s LGSTX Services.
Commenting on the development, Dave Clark, Amazon’s senior Vice President of worldwide operations and customer service, said: “We’re excited to supplement our existing delivery network with a great new provider, ATSG, by adding 20 planes to ensure air cargo capacity to support one and two-day delivery for customers.”
Under a separate condition of the contract, ATSG has agreed to give Amazon warrants for acquiring 19.9% of ATSG’s common shares at US$9.73 each over the course of the five-year contract, the closing price of ATSG stock on February 9 2016. Following the announcement of the new service, ATSG stock jumped by more than 18%.
President and CEO of ATSG, Joe Hete, confirmed speculation that ATSG has been working closely with Amazon since last summer to assess if “a dedicated, fully customised air cargo network can be a strong supplement to existing transportation and distribution resources.” He went on to assert that the company is “excited to serve Amazon customers by providing additional air cargo capacity and logistics support to ensure great shipping speeds for customers.”
It has also been announced that Amazon is building two fulfilment centres in Ohio, measuring 1m square-feet and 800,000 square-feet respectively, along with three new data centres in the Columbus region.
