Amazon could add 20 jets to air shipping fleet, impacting FedEx business: Report
Lands' End CEO Jerome Griffith on the holiday shopping season, the retailer's partnership with Amazon and the company's growth and outlook.
One of Amazon’s cargo jet suppliers acquired an additional 20 Boeing 767 planes this week that could boost the e-commerce giant’s in-house delivery efforts, potentially accelerating a buildup that Wall Street warned would cut into FedEx and UPS’ business.
Air Transport Services Group, an Ohio-based company, said it will acquire the 20 jets as they are retired from American Airlines’ domestic fleet over the next three years. While ATSG has declined to comment on how the planes will be used, the company already supplies 20 jets to the “Amazon Air” fleet and is expected to provide at least some of the newly acquired plans to Amazon.
“I see the majority ending up in Amazon service,” the rival cargo leasing CEO with knowledge of the situation told the Seattle Times.
Amazon did not immediately respond to a request for comment.
Amazon has long relied on carriers such as FedEx and UPS to complete shipments for its tens of millions of online shoppers. However, the company announced earlier this year that it would invest $1.5 billion for a new air cargo hub in Kentucky, complete with a fleet of 40 cargo planes.
Morgan Stanley analyst Ravi Shanker warned earlier this month that Amazon’s increased shipping capacity could hurt UPS’ and FedEx’s businesses to the tune of 2 percent of revenue in 2018 and 10 percent by the year 2025. Amazon will soon have the capacity for a fleet of 100 planes.
FedEx CEO Fred Smith dismissed concerns about the growth of “Amazon Air” in a conference call Wednesday, noting that his company sees Amazon as a “good customer,” not a rival.
“I think the prospects that this company is going to be ‘disrupted,’ which just occurs over and over again, to quote a previous statement, is fantastical. So I’ll leave it at that,” Smith said.