Amazon Buys 11 Used Aircraft... "Shipping Volume Surges Due to COVID-19"

Bought used Boeing 767-300 from airlines
Delta and WestJet sold 7 and 4 units respectively
"Impact of surge in cargo transport demand and sharp drop in passenger air travel demand"

An Amazon Prime jet is taking off from Miami International Airport in the United States.
[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Daehyun] Amazon has purchased 11 used aircraft from airlines such as Delta and WestJet. Given the recent surge in online cargo transportation demand and the sharp decline in passenger air travel due to the COVID-19 pandemic, this deal is seen as a clear reflection of the contrasting market conditions.

According to CNBC on the 5th (local time), Amazon announced that it bought seven and four used Boeing 767-300 aircraft from Delta and WestJet, respectively. Until now, Amazon has only operated cargo aircraft through leasing, making this its first direct purchase. Sarah Rojas, Amazon's Vice President of International Air, stated in a press release, "By operating a mix of leased and owned aircraft, we can manage more systematically," adding, "This will also help improve customer satisfaction."

Currently, online shopping companies including Amazon are making efforts to reduce delivery times. Due to social distancing measures and consumers avoiding store visits amid the spread of COVID-19, online shopping orders have surged dramatically. Since 2016, Amazon has operated aircraft directly in the delivery process, creating tension within the existing air logistics industry such as FedEx.

Amazon stated, "The four used WestJet aircraft will be converted for cargo use and deployed starting this year, while the seven purchased from Delta will be added in 2022." Through this, Amazon plans to operate more than 85 cargo aircraft by the end of 2022. Although Amazon, Delta, and WestJet did not disclose the contract price for the aircraft, CNBC analyzed that the recent sharp drop in aircraft prices was likely reflected. According to CNBC, a market price survey by an aviation consulting firm showed that the market price of the Boeing 767-300 fell about 15% compared to the beginning of last year as of December.

On the other hand, passenger aircraft demand has plummeted due to the decrease in travelers, and airlines are reportedly planning to sell more used aircraft to reduce costs. Delta announced last year that it plans to dispose of seven Boeing 767-300 aircraft by 2020 and the remaining 49 by 2025.