The global eCommerce giant Amazon has taken up a minority share in a cargo airline that operates a portion of its fast-growing air-cargo division, the purchase comes in line with the company’s long-term ambitions to grow its air-freight operations.
Amazon has acquired about 13.5 million shares of Air Transport Services Group (ATSG) for an amount of $131 million, the air cargo operator stated in a securities filing, using warrants Amazon had previously acquired.
The eCommerce giant acquired about 865,000 additional shares through an agreement in which no cash changed hands. The purchases are contingent upon consent by the US Department of Transportation, ATSG said.
Amazon first received a stock-purchase warrant to acquire ATSG shares in 2016, following an agreement that found ATSG begin flying aircraft for Amazon’s then-new air cargo unit.
Earlier this year, Amazon announced its first aircraft purchases, buying 11 Boeing 767-300 jets to become part of a fleet of leased planes. The eCommerce giant is also planning to complete its work on an air-cargo hub at Cincinnati/Northern Kentucky International Airport, later this year.
With these acquisitions, Amazon is planning to use air operation to accelerate goods movement from its warehouses to shoppers, reducing its reliance on logistics partners. Amazon has also obtained warrants to purchase shares in Atlas Air Worldwide Holdings and Sun Country Airlines Holdings, two other carriers that operate Amazon Air jets.
ATSG chief executive Rich Corrado earlier stated that the company is expected to widen its fleet volume by operating 46 aircraft for Amazon by the end of this year, up from 33 at the end of 2020.
Thank you very much for choosing GCC Business News to be an important part of your professional life. You will receive a confirmation e-mail. Please check SPAM or UPDATES folder
