Barcelona, January 10, 2021.- Amazon has decided to buy planes, rather than rent them, taking advantage of the economic crisis of COVID-19 for airlines. Amazon continues its career to be one more logistics operator, along with traditional brands such as Fedex and UPS, as we already reported here four years ago.
Amazon has been growing its air cargo fleet through leasing agreements in a bid to boost its ability to deliver parcels to consumers rapidly, particularly through its Prime services, which advertise overnight and two-day shipping. These services, and Amazon more broadly, have proven immensely popular during the Covid-19 pandemic, and the company’s skyward expansion coincides neatly with airlines desperately trying to cut costs as pandemic restrictions and wary passengers leave seats empty. Many airlines, such as Delta, are retiring planes early to save money.
Amazon still touts its reliance on third-party delivery providers like FedEx and UPS but the expansion of its air cargo network echoes its wider plans to bring delivery in house. It is possible that the online retail giant, which has a growing network of trucks, vans and planes, may one day be able to rival these services. FedEx and Amazon have already parted ways on ground and express air delivery, with the courier saying that it wanted to focus on the “broader e-commerce market” in 2019.
The deal comes as airplane prices have dropped due to the coronavirus pandemic. Airlines have been rushing to shrink their fleets as passenger demand plummets amid lockdown orders across the globe. The purchases include seven aircraft from Delta and four aircraft from WestJet, which will join Amazon’s network by 2022, the company says.
“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,” said Sarah Rhoads, vice president of Amazon Global Air, said in a press release. “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 launched its air fleet in 2016, under the assumption that by 2022 it will have more than 85 planes, both leased and owned. According to a year-old analysis, Amazon delivers more than half of all of its packages in the US as it accelerates its push to own the entire logistics chain and end its relationship with companies like FedEx and UPS.
The newly bought planes are intended to help speed the delivery of packages purchased through Amazon, which has seen record demand as a result of the pandemic. The company says it will continue to rely on third-party carriers to operate these new aircraft.
Amazon is quickly becoming a major player in the world of transportation. Obviously, as one of the largest delivery and logistics firms in history, Amazon was always destined to play a huge role in the way people and things move across the globe. But some of the company’s more recent deals suggest Jeff Bezos’ company has ambitions that extend beyond just package delivery.
Amazon recently acquired the self-driving car startup Zoox, which just unveiled its omnidirectional prototype robotaxi. The company has also participated in multiple funding rounds for electric vehicle company Rivian, which is designing a battery-powered van for the delivery giant’s last-mile deliveries, and contributed to driverless car and truck startup Aurora’s $530 million funding round. (Aurora just acquired Uber’s self-driving car division.)
And of course there’s the company’s interest in drone delivery. The company was recently given approval by the Federal Aviation Administration to operate as a drone airline in the US, paving the way for it to start offering commercial deliveries on a trial basis. The FAA said that the ruling allows Amazon to “safely and efficiently deliver packages to customers” and let its drones carry packages outside of the operator’s visual line of sight.
- “With the blurring of industrial lines, is Amazon a logistics company?”
The World Congress of the IRU is one of the essential appointments for companies and transport professionals. In the last edition, very interesting tables were held on the new markets in European Transport, the new immediate challenges and all the variables affecting land transport of goods. In the next lines we may know if Amazon is already a Logistic Operator. The IRU has made public the following conclusions of a panel on new business models in European transport.… Continue reading “With the blurring of industrial lines, is Amazon a logistics company?”
Transportation & Logistics Software 