Amazon (NASDAQ: AMZN) has announced a considerable expansion of its two-year-old Amazon Air operation. The company announced that it would be leasing 10 additional Boeing 767 cargo jets from the Air Transport Service Group (ATSG), which provides half the planes in Amazon’s current fleet. The 10 new planes from ATSG will join Amazon’s fleet over the next two years.
Amazon is expected to start using five of the new jets next year, and the other five in 2020. There is speculation that the company could be leasing an additional 17 jets by 2025. The Amazon Air fleet currently leases 40 cargo jets, taking delivery of its 40th Boeing 767 in November.
Amazon’s air fleet operations plays a significant role in how Amazon is able to meet its promises of fast, two-day shipping for Prime members. Its 40 aircraft fly in and out of gateway operations at more than 20 airports. Amazon recently announced openings of a gateway operation in Wilmington, Ohio and a new Regional Air Hub at Fort Worth Alliance Airport in 2019, as well as the opening of an Air Hub at the Cincinnati/Northern Kentucky International Airport in 2021.
Amazon is trying to reduce its dependence on other delivery companies, such as FedEx, UPS and the U.S. Postal Service. Amazon spent $18.6 billion on shipping costs in the first nine months of 2018, 30 percent higher than in the same period a year earlier. By creating its own air transportation network, Amazon gets to move products around the country on its own schedule.
Dave Clark, senior vice president of Worldwide Operations at Amazon, said in a statement, “Our customers love massive selection and fast delivery, and the Amazon Air capacity we are building enables Prime delivery speeds for customers from Seattle, Washington to Miami, Florida. By expanding the Amazon Air network through our partnership with ATSG we’re able to ensure we have the capacity to quickly and efficiently deliver packages to customers for years to come.”