A total of five aircraft will be operated on a crew, maintenance and insurance (CMI) basis for Amazon, for a term of seven years, with an extension option by Amazon for a total term of 10 years. Five aircraft are scheduled to be placed into service in this fiscal year.
The aircraft will be leased by Amazon from a third party – said to be GECAS – and subleased to Atlas Air Worldwide Holdings (AAWW) subsidiary, Southern Air.
The move by e-commerce giant Amazon into the smaller freighter type – which has a capacity of 24 tonnes, compared to the B767s currently flying for Amazon which have a capacity of around 58 tonnes) was confirmed by a US Securities and Exchange Commission filing by Atlas Air Worldwide.
The announcement follows a ‘tweet’ by Amazon’s senior vice president of operations of a B737-800 converted freighter, earlier in the week. The image was striking for two reasons: A blue livery rather than the white of the current B767 fleet, and the fact the aircraft was a departure from the current fleet makeup of B767s.
“Amazon may, in its sole discretion, place up to 15 additional Boeing 737-800 aircraft into service with Southern Air by May 31, 2021, subject to Amazon’s confirmation that it will exercise such options no less than 240 days in advance of the scheduled delivery date for each aircraft,” the filing states.
In connection with this, Atlas Air Worldwide says it has granted Amazon incremental warrants that would allow it to potentially acquire up to a total of 39.9 per cent (after the issuance) of Atlas Air Worldwide’s common shares, an increase from up to 30.0 per cent previously.
The warrants relate to existing B767 activities and expected B737 CMI flying for Amazon, and they will also capture future growth of the relationship as Amazon may increase its business with AAWW.
This latest move comes after Amazon Air announced in January this year that it was expanding its US domestic freighter network with the lease of another 10 B767-300Fs from US aircraft lessor ATSG, with options for more. That would bring the e-commerce giant’s fleet of aircraft to 50 – with existing leases of 20 from ATSG and 20 from Atlas Air – when all the aircraft are delivered in two years.