Business Broadcast Network CNBC reported today that Amazon has taken a minority equity stake in Air Transport Services Group (ATSG), one of its air freight operating partners.
According to an ATSG securities filing, the global online retail platform provider exercised warrants that allow for the acquisition of upwards of 13.5 million shares of this air cargo operator valued at more than $13.9 million. A separate agreement reportedly allowed Amazon to purchase approximately 865,000 shares of ATSG with no cash exchanging hands.
The concept for now what is branded as Amazon Air was initially conceived in 2016 when the online platform provider announced two leasing deals involving 10 Boeing 767 air freighters from ATSG, and an additional 20 cargo jets from Atlas Air Worldwide Holdings. At the time, ATSG was further contracted to provide loading and unloading support for Amazon’s entire air freighter fleet. The online platform provider also holds a minority stock position in Atlas Air.
As Supply Chain Matters noted in January, Amazon outright purchased 11 used Boeing 767-300 passenger jets from both WestJet and Delta Airlines to be converted into air strictly cargo transport needs. Later this year, the online platform will formerly open its $1.5 billion air freight transport hub at the Northern Kentucky airport complex, and by that time, Amazon Air could consist of a fleet of upwards of 70 aircraft.
With increased minority equity interest in its two air freighter leasing operators, and with outright ownership of aircraft, it would seem that Amazon would need to up its efforts in settling labor unrest among aircraft pilots employed by the two leasing firms. Labor relations among Atlas Air pilots have especially been frayed and contract negotiations with pilots have since ended with the process moving to arbitration that is slated to start this month. ATSG reached a contract agreement with pilots in December.
Indeed, Amazon has garnered a far more recognized presence in influence, scheduling and ownership of air freight services operations and with that, its influence on the industry’s labor relations. With so much disruption continuing to occur across global transport channels, such a presence garners more and more visibility and envy.
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