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Amazon Leases 20 Planes for Air Delivery

Last month it was ramping up Uber-like Amazon Flex, before that it was a fleet of semi-trucks and an application to become an ocean freight forwarder. Now Amazon wants to start airing its own goodies.

The e-commerce giant signed a deal with Air Transport Services Group (ATSG) to operate an air cargo network that will deliver Amazon’s products to its consumers faster than it already does.

“Since last summer, we have been working closely with Amazon to demonstrate that a dedicated, fully customized air cargo network can be a strong supplement to existing transportation and distribution resources,” ATSG president and CEO Joe Hete, said in a statement. “We are excited to serve Amazon customers by providing additional air cargo capacity and logistics support to ensure great shipping speeds for customers.”

Amazon Fulfillment Services will lease 20 Boeing 767s for five to seven years, which ATSG’s airlines (ABX Air and Air Transport International) will operate, ATSG said.

As part of the agreement, Amazon will also be able to acquire up to 19.9% of ATSG’s common shares at $9.73 per share over a five-year period.

“We offer Earth’s largest selection, great prices and ultra-fast delivery promises to a growing group of Prime members and we’re excited to supplement our existing delivery network with a great new provider, ATSG, by adding 20 planes to ensure air cargo capacity to support one and two-day delivery for customers,” said Dave Clark, Amazon senior vice president of worldwide operations and customer service.

FedEx, not surprisingly, was not surprised by Amazon’s latest move.

“We work closely with Amazon and have been aware for some time about their need for supplemental air capacity related to inventory management,” FedEx senior vice president, integrated marketing and communications Patrick Fitzgerald, said. “Amazon continues to be a valuable FedEx customer.”