The Wall Street Journal reports that the Amazon Air cargo airline is "growing at a breakneck pace," making "an average of 187 flights a day, compared with 85 in May 2020." Amazon Air "now has more than 80 jets - less than DHL’s 202, UPS’ 289 and FedEx’s 474 but a lot more than the 50 it had at the start of 2020."
Indeed, the story suggests that this could be an underestimate, since "Amazon doesn’t operate its flights, instead relying on partners such as Air Transport Services Group." The actual number actually could be more than 110 .
"There is nothing like a pandemic and a European war to highlight the value of logistics," the Journal writes. "Amazon.com’s growing fleet of planes shows that it is investing hard to deliver … Since the Covid-19 crisis started, e-commerce purchases have skyrocketed and a lot of belly-hold space in planes has been removed. Many airfreight companies have seized the opportunity to grow."
The story goes on: "Having previously leased its planes, Amazon started buying some last year as a flood of parked jets entered the secondhand market and freighter conversions surged. It has also taken equity stakes in ATSG and has warrants on the stock of Atlas Air. This strategy of building extra flexibility and control may herald more encroachment on the territory of FedEx and UPS. Amazon already provides some “third party” services to companies, and could soon start competing head-to-head in business-to-consumer deliveries."
- KC's View:
This illustrates something that Scott Moses of Solomon Partners talks about all the time - the enormous financial example that Amazon has, with a higher market capitalization - and greater access to cheaper money - than most of its major competitors combined.