Amazon Air takes off during coronavirus with rapid summer expansion to its fleet

The retail giant added nine new planes to its fleet between May and July 2020, report says

While the airline industry continues to suffer from the financial devastation left behind by the coronavirus pandemic, Amazon's air cargo business appears to be taking off.

A new report by DePaul University's Chaddick Institute for Metropolitan Development on Tuesday found that Amazon Air added nine Boeing 737 planes to its fleet between May and July 2020, the most added over a three-month span since the service's inception.

“Amazon Air expanded rapidly during summer 2020, a period otherwise marked by sharp year-over-year declines in air-cargo traffic,” researchers wrote.

AMAZON HIRING 100,000 WORKERS IN US, CANADA TO KEEP UP WITH SURGE IN ONLINE SHOPPING

The new additions to Amazon Air's fleet come as the retailer is looking to keep up with online shopping demand during the pandemic, with daily flight activity expanding from 85 to 108 flights from April 23 to August 20, a 27.1% increase, and surging to 127 and 133 flights on August 24 and 25, respectively.

"Over the course of the six days, we observed in August (which covered every day of the week except Sunday), Amazon Air appears to have grown roughly 28% to 30% since May (although our limited data from April does not allow us to conclude this with certainty)," researchers wrote. "Nevertheless, considering that a Boeing 737 and Boeing 767 were added to the fleet this month, boosting its fleet by another 4% subsequent to our counts, it is safe to conclude that its overall growth since April has well exceeded 30%, and could be up as much as a third."

Amazon Prime Air Boeing 737 aircraft with registration N855DM as seen at Paris Air Show 2019 at Le Bourget Airport LBG in France. The aircraft is a converted Boeing 737-800 to Boeing 737-83N(SF), Amazon Air is a cargo airline brand for Amazon freight

By the end of 2021, researchers estimate that Amazon Air could cross the 200-flights-a-day threshold, making it about twice the size it was in early 2020.

"With only a modest increase in fleet utilization, this will require about 74 to 75 airplanes, which the airline is on track to achieve," researchers added.

According to the analysis, Amazon Air is projected to add at least four additional planes at a later date.

"If this occurs by December, the retailer will have added 16 planes this calendar year, tying the previous record from 2017," researchers added. "Such growth would give it a 38.1% expansion of its fleet in a single calendar year."

Amazon announced in June that the company had leased 12 new Boeing cargo jets from Air Transport Services Group (ATSG), a move that would bring its total fleet to more than 80 aircraft by 2021. DePaul University researchers added that they believe Amazon's fleet is on track to grow to 200 planes by 2028.

AMAZON LAUNCHES 'LUXURY STORES' TO SELL HIGH-END FASHIONS; PLATFORM DEBUTS WITH OSCAR DE LA RENTA COLLECTIONS

Despite its recent growth, however, Amazon Air is still smaller than rivals FedEx and UPS and DHL, which operate 463, 275 and 77 planes respectively, according to a separate report by DePaul researchers back in May.

Ticker Security Last Change Change %
AMZN AMAZON.COM INC. 179.83 +1.53 +0.86%
FDX FEDEX CORP. 287.88 -1.11 -0.38%
UPS UNITED PARCEL SERVICE INC. 147.39 +3.60 +2.50%

Tuesday's report notes that it does not appear that Amazon is focused on competing with its rivals for a coordinated network of connecting flights used for overnight sorting and shipping. Instead, researchers say Amazon appears to be focused on "creating a network designed to link warehouses and distribution centers to help position goods for rapid shipment to customers once an order is placed."

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Though outside carriers still account for a significant portion of Amazon Air's deliveries, DePaul researchers added that Amazon appears to be gradually moving toward an in-house logistics operation.

Researchers believe the investment Amazon is making for an airport hub at Cincinnati/Northern Kentucky International Airport could change everything by allowing Amazon to "easily tap into the expanding cluster of retail warehouses around Columbus Rickenbacker Airport (which is less than two hours away by truck) and the extensive warehousing, both by Amazon and other retail-oriented companies around CVG."

"This hub appears to be the lynchpin to Amazon’s efforts to develop a comprehensive array of domestic delivery services across the United States," researchers said in their May report.

The hub, scheduled to open in 2021, is designed to have the capacity for 100 Amazon-branded planes and handle an estimated 200 flights per day.

CLICK HERE TO READ MORE ON FOX BUSINESS