Amazon Air expands again but are third-party services on the horizon?
Amazon Air increased its daily flying by 15% between August and February and further increases are expected during the spring, according to a new report. Meanwhile, third-party delivery services could be on the horizon.
The report, issued by the Chaddick Institute for Metropolitan Development, shows that Amazon Air increased its daily flights from 122 in August to 140 February.
In North America, flights increased by around 8%, suggesting that much of the increase comes from the launch of operations in Europe.
Looking ahead, the report, written by Joseph Schwieterman, Jacob Walls, Borja González and Crystal Bell, suggests that further increases are expected as more aircraft come on-stream.
Between early September 2020 and February 2021, Amazon Air’s in-service fleet has increased from 52 to 59, a 13.5% increase.
Meanwhile, its total fleet, including parked aircraft and those undergoing transformation to freighters, grew from 56 to 68, for a 21.4% increase.
- “Nine off these planes are not presently in revenue service,” the report points out. “[Amazon Air] has four planes that are slated to be added to its fleet soon. This does not include several of the Delta planes in the recently announced purchase.
- “We anticipate that seven or eight planes registered to Amazon will likely begin service by June 2021, pushing the fleet of active planes under its registry to 66 or 67, which, together with more intensive utilisation of existing planes, sets the stage for another growth spurt, like that occurring last summer.”
Third-party services?
The report also suggests that continued expansion at Cincinnati-Northern Kentucky International (CVG) and Ohio’s Wilmington Air Park (ILN) could be a pre-cursor to Amazon offering services to third parties.
- “Amazon’s entry into this business will likely occur in the next 18 months, and when it occurs, Amazon Air — and the CVG/Wilmington hubs in particular — will be critical.
- “Amazon would likely focus on retailer-to-consumer shipments — e.g., moving packages from retailer warehouses to consumers — without trying to replicate the comprehensive services offered by FedEx and UPS, which have vast door-to-door networks.”
It added: “With additional expansion at CVG, and possibly Wilmington as well, Amazon is in position to have a next-day shipping network centering on the Ohio Valley that reaches 95% of the population of the contiguous US. Such a network would be valuable to both Amazon and third-party retailers selling on different platforms.”
Amazon is set to this year open a huge hub at CVG that will have parking for up to 100 freighters, and could offer as many as 200 flights per day.
The report points out that it is not the first to suggest that Amazon could expand its offering to third parties.
In November 2020, Morgan Stanley publicised its expectation that Amazon will launch a third-party delivery service in the US, possibly as soon as this year.
On Amazon’s European operation, the report stated: “The Boeing 737-800s are intensively used, each generally completing four flight segments daily—a higher number than most of its US-based airplanes.
- “These planes fly from the wee hours to late evening between seven cities.
- “One plane regularly makes a morning Cologne, DE – Milan, IT round-trip followed by a Cologne – Madrid, ES round-trip that same day. The other is often dispatched on Leipzig, DE – Barcelona, ES – Rome, IT – Paris, FR –Leipzig trips.
- “Amazon Air’s budding intra-Europe network, like its North American network, has a decentralised orientation and involves widely dispersed airports. No airport having regular flights is within 300 miles (483km) of another.”
The report also concluded that Amazon had reduced its transoceanic flying, offering only the occasional flights between Amsterdam and Chicago O’Hare.
Source ST
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