Amazon.com, Inc. (NASDAQ: AMZN) Chief Executive Officer Jeff Bezos began construction of its new USD 1.5 Billion airport near Cincinnati on Tuesday, according to Business Insider.
Amazon agreed to a 50-year lease for more than 900 acres of property from Cincinnati and Northern Kentucky International Airport in 2017. The space is close to the size of global hubs of top cargo airlines, according to the Associated Press.
With the development of an airport hub, Amazon will have immediate access to a transportation hub in order to deliver products at a faster rate.
Furthermore, the airport hub will also eliminate the need for Amazon to partner with delivery services such as UPS, FedEx, or the U.S. Postal Service. As a result, Amazon will cost expenses while delivering products at a much more efficient rate.
“This hub is going to let us get packages to customers faster, and that’s a big deal,” Bezos said, according to Cincinnati’s WCPO-TV. “We’re going to move Prime from two day to one day, and this hub is a big part of that.”
Amazon recently reported its first quarter financial results and crushed analysts’ estimates. However, Amazon’s results signaled that its revenue growth was slowing down. Looking forward, Amazon provided a lower-than-expected operating profit guidance, which highlighted that the Company is moving towards heavier investments.
For the second quarter, Amazon expects to report operating profit in the range of USD 2.6 Billion and USD 3.6 Billion. Analysts are estimating operating profit of USD 4.2 Billion.
Shortly after Amazon’s earnings release, Chief Financial Officer Brian Olsavksy said on the earnings call that the lower-than-expected guidance is largely due to a USD 800 Million investment in making free one-day delivery shipping the default for Prime users.
Amazon has been aggressively working towards creating its own shipping service. For over the past year, Amazon has been trying to become independent and not rely on other third delivery services.
“We’re investing USD 1.5 Billion in our new air hub to get you your packages faster. Three million square feet, and it’s going to create 2,000 jobs.” tweeted Bezos on Tuesday.
The hub is expected to be completed by 2021.