Amazon.com Inc. (NASDAQ: AMZN) today announced an agreement with Air Transport Services Group, Inc. (NASDAQ: ATSG) to operate an air cargo network to serve Amazon customers in the United States.
ATSG is an Ohio-based company providing air cargo transportation and related services. The company is world's largest owner and operator of converted Boeing 767 freighter aircraft. They have been working closely with Amazon since last summer to demonstrate the efficiency of customized air cargo network. Joe Hete, President and CEO of ATSG, said “We are excited to serve Amazon customers by providing additional air cargo capacity and logistics support to ensure great shipping speeds for customers.”
Agreements between Amazon and ATSG include the leasing of 20 Boeing 767 freighter aircrafts to Amazon Fulfillment Services, Inc. (an affiliate of Amazon.com, Inc.), the operation of the aircraft by ATSG`s airlines, and logistics services provided by ATSG’s LGSTX Services. The lease deal will last 5 to 7 years, while the agreement to operate the aircraft is for 5 years. ATSG also granted Amazon to buy up to 19.9% of its shares at $9.73 over the next few years. Shares of ATSG soared over 13% after the announcement.
“We offer Earth’s largest selection, great prices and ultra-fast delivery promises to a growing group of Prime members and 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,” said Dave Clark, Amazon senior vice president of worldwide operations and customer service
Amazon has been committed to take control its logistics chain and to reduce it`s reliance on traditional carriers. The new agreement made Amazon an another step closer to its goal.