Amazon Air Capacity Expands With New 15-Plane Order
The company intends to better meet one-day free delivery guarantees and position itself for expansion in new directions.
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July 2, 2019 - by Rich Duprey for fool.com
Showing just how little it cares about FedEx (NYSE:FDX) cancelling its domestic Express delivery contract, Amazon.com (NASDAQ:AMZN) ordered up 15 more cargo planes at the recently held Paris Air Show that will allow it to carry more of its own packages.
While the purchase was likely planned long before FedEx decided to kick it to the curb, as Amazon rolls out one-day delivery for Prime members, having greater control over shipping packages becomes increasingly important. Internally handling the logistics of the process gives it greater flexibility to meet those demands, but it also increases Amazon's learning and skill in performing the task should it ever decide to become a third-party carrier, as many suspect it will.
A play for greater capacity
You don't typically associate Amazon with the world's largest air show and aerospace exhibition, but the e-commerce giant agreed to lease an additional 15 Boeing 737-800 cargo aircraft through General Electric's (NYSE:GE) GE Capital Aviation Services (GECAS). They will be in addition to the five Boeing 737-800s Amazon leased from GECAS earlier this year. By 2021, Amazon says it will be operating 70 planes.
The increased capacity Amazon gets...