Amazon Invests in its Own Cargo Fleet

Last January, Amazon announced its first-ever purchase of eleven Boeing 767–300 aircraft, including seven aircraft from Delta and four from WestJet, which will join the network by 2022. The four aircraft purchased from WestJet are in the process of being converted from passenger to cargo planes and will start flying as part of the Amazon Air fleet in 2021, while the seven planes from Delta will join the fleet in 2022. They will also be operated by third-party carriers, following the same practice as its leased planes. So what does this entail for the eCommerce giant and the overall eCommerce industry?

While this is the first time the Seattle-based company has acquired its own aircraft, it has been leasing planes to deliver goods to consumers around the world since 2016, when it launched its air cargo service, now called Amazon Air. Since then, the eCommerce giant has invested heavily to build its growing air freight network. Currently, the company’s air fleet comprises over 70 planes, a figure which is expected to grow to at least 200 by 2028, according to a report published in February 2021 by DePaul University.

Amazon purchased the planes at a time when the airline industry was struggling to stay afloat as aircraft costs plummeted and ticket sales declined due to travel restrictions induced by the COVID-19 pandemic. Several airlines, including Delta, have started speeding up the retirement of their aircraft to help drive down costs.

Meanwhile, Amazon has witnessed a massive surge in online sales as people across the globe — who were confined to their homes for much of 2020 — increasingly turned to e-retailers to purchase products during the pandemic.

The e-commerce platform’s bid to expand its air network points at its wider plans to shift its deliveries in-house and become a major player in the transportation sector. With this expansion, Amazon is striving to lower overall lifetime costs and gain greater control over speed, reliability, and quality of service to cement the brand as a genuine player in the competitive world of air freight.

However, it is also important to keep in mind that as its air fleet continues to grow, the company could pose a significant threat to its delivery partners. In fact, in 2019, FedEx announced that it would not be renewing its US air-delivery contract with Amazon.

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