Amazon in talks to lease 20 jets to launch air cargo business

[Setpoint99]

According to the Dec. 17 Seattle Times:

Amazon in talks to lease 20 jets to launch air cargo business | The Seattle Times (http://www.seattletimes.com/business/amazon/amazon-in-talks-to-lease-20-jets-to-launch-air-cargo-business/)

"Amazon.com is negotiating to lease 20 Boeing 767 jets for its own air delivery service, cargo industry executives have told The Seattle Times.

"The online retail giant wants to build out its own cargo operations to avoid delays from carriers such as United Parcel Service, which have struggled to keep up with the rapid growth of e-commerce.

"'Amazon is pretty fed up with the third-party carriers being a bottleneck to their growth,' Robert W. Baird & Co. analyst Colin Sebastian said."

[Loader1]

And more here... (http://theloadstar.co.uk/amazon-sends-air-cargo-market-into-a-spin-as-it-eyes-large-767-fleet/)

[bafanguy]

If they start getting their own airplanes in 2017, the timing would be perfect for pilot supply: boatloads of people retiring from US airlines, many of whom will have lots of B767 time and won't care if they're the captain or not.

Just make it a Part 125 operation where, if I remember correctly, there's no age limit for flight crew. This has several advantages:

1) Old guys don't sleep all that well so they're going to be awake all night anyway.

2) The job won't pay very well so Amazon can afford to put three pilots on every airplane so they'd have a spare if one dies in the seat in flight. And there's no one aboard to be alarmed that a pilot died in flight...won't even make the news and generate negative publicity.

2a) Maybe three pilots won't be necessary since one old fart can manage a B767 quite nicely alone...and probably hated the guy who died anyway. No emergency landing required...just continue to original destination.

2b) Two old guys are unlikely to died simultaneously (of natural causes) on the same leg.

3) Amazon won't be forced by Obamacare to provide health insurance as the pilots would all have Medicare which fortunately provides a $255 burial benefit which is about enough to get someone to come retrieve the body from the freight ramp before it decomposes.

4) There'd be no pension obligation to fund as they'd all have Social Security (and won't live long enough to collect a company pension anyway).

5) They won't unionize since they'd all be sick & tired of getting screwed by ALPA in the past.

6) The pilot supply is virtually endless.

7) If all that fails, just use that special visa deal to get as many Aussies as possible.

I really should've been in management !!

[MarkerInbound]

Nice try:

§125.11 Certificate eligibility and prohibited operations.

(b) No certificate holder may conduct any operation which results directly or indirectly from any person’s holding out to the public to furnish transportation.

As long as Amazon says they will deliver to anyone it falls under 121.

[bafanguy]

"As long as Amazon says they will deliver to anyone it falls under 121. "

Yep, knew that and saw the statement in the articles that they might carry another company's stuff.


My plan was written as a JOKE !!!!!!!!!!!!!!

[The Range]

Joking like that could give them some ideas and they might try to change the Regs.

[bafanguy]

Think of it as recycling old airline pilots...one step removed from soylent green. :-}

[pabely]

Some of Amazons warehouses/distribution centres are not ideal with the UPS/FedEx/DHL network. Might see some other airports picking up overnight freight traffic.

[nch334]

What do you do now Bafan ? Seems to me an undertaker/funeral director job will fit you real good. :E

[bafanguy]

nch334,

"...an undertaker/funeral director job will fit you real good."

Nah, not enough laughs in that gig !

[Never Fretter]

Some of Amazons warehouses/distribution centres are not ideal with the UPS/FedEx/DHL network. Might see some other airports picking up overnight freight traffic.


What like Cardiff and Edinburgh in the UK for their Swansea and Dunfermline depots?

This
(http://theloadstar.co.uk/amazon-sends-air-cargo-market-into-a-spin-as-it-eyes-large-767-fleet/)And more here... (http://theloadstar.co.uk/amazon-sends-air-cargo-market-into-a-spin-as-it-eyes-large-767-fleet/)
(http://theloadstar.co.uk/amazon-sends-air-cargo-market-into-a-spin-as-it-eyes-large-767-fleet/)
Suggests they will wet lease rather than operate.

[bafanguy]

Never Fretter,

Amazon would certainly use dedicated subcontractors to start but if it worked well enough...

"While the e-tailer is unlikely to be eyeing its own AOC just yet, it could begin acquiring aircraft after testing the waters through a leasing operation."

No way to tell if they'll pull the trigger on this idea but Amazon is a force to be reckoned with.

[Acid-drop]

where are those big warehouses ?
EDIT : http://www.mwpvl.com/html/amazon_com.html

[Prophead]

Wouldn't Manston be a good location for an Amazon UK/Europe hub?

[monkeytennis]

Finningley. They're already running a 737 six days a week into here, a Europe Airpost aircraft.

Would be great to see that ramped up to several widebodies per day.

[LTNman]

Read a post a few weeks ago the Amazon had been running an aircraft into Luton nightly for a trial. I think it was a 737 but I could be wrong. Don't know if the trial is still running though but Amazon have a massive depot just 3 junctions up the M1 from the airport.

[bafanguy]

Latest info:

"ATSG subsidiary airlines ABX Air and ATI will operate the aircraft for Amazon and ATSG will also provide logistical services at its Wilmington hub."



Amazon to lease 20 Boeing 767s for its own air cargo network | The Seattle Times (http://www.seattletimes.com/business/boeing-aerospace/amazon-to-lease-20-boeing-767s-for-its-own-air-cargo-network/)

[bafanguy]

Looks like an Amazon subcontractor is doing some hiring:

https://www.airtransport-jobs.com/jobDesc.asp?JobID=49

[bafanguy]

I don't understand this part of ATI's ad:

"Must be able to qualify and pass a US Government secret clearance in the event of CRAF activation"

Lots of US carriers in CRAF and I don't recall seeing that mentioned in other pilot employment ads. Some have green card holders as pilots (likely not all that many though).

http://www.amc.af.mil/library/factsheets/factsheet.asp?id=234

[bafanguy]

"ATSG subsidiary airlines ABX Air and ATI will operate the aircraft for Amazon, and ATSG will also provide logistical services in Wilmington."

Looks like a little hiring on the ABX side. Maybe due to the Amazon deal ?:

ABX Air Careers: Pilot Careers (http://www.abxair.com/careers/pilots.cfm)

[6000PIC]

Big Mistake. I`ll say it again , BIG MISTAKE. Amazon should have stuck with what they know and do best - internet sales. Deciding to get into the airline business not only distracts from their core business , but attracts every crook and snake oil salesman in the airline business. "Sure Amazon , we`ll help you ! , now give us some $$$$ " ...Getting a highly unionised workforce to operate (20 ) old clapped out 767-200`s , that is able to greatly leverage any future labor negotiations is foolhardy in the least. At worst , it will cost Amazon greatly.
FedEx , DHL and UPS will not say it publicly , but they won`t be taking this laying down , you can count on that. This episode in " Airline building " will be a future MBA case study in why you should not let accountants steer the strategic policy of such an internet giant.
They could have saved a billion and just asked the folks on PPRuNe !

[bafanguy]

FYI:

Kathryn's Report: Amazon leases 20 more jets for growing air cargo fleet (http://www.kathrynsreport.com/2016/05/amazon-leases-20-more-jets-for-growing.html)

[Sandy Boots]

And another 20 767F's ......

Amazon agrees to contract 20 767 freighters from Atlas Air | Airframes content from ATWOnline (http://atwonline.com/airframes/amazon-agrees-contract-20-767-freighters-atlas-air?NL=ATW-04&Issue=ATW-04_20160505_ATW-04_284&sfvc4enews=42&cl=article_1&utm_rid=CPEN1000001004398&utm_campaign=5824&utm_medium=email&elq2=49b81583ef69426fa9902f957acd864d)

[grounded27]

Looks like ATLAS just snaked the contract unless Amazon is doubling down on this expansion.

Amazon Partners with Atlas Air Worldwide for Cargo Services - WSJ (http://www.wsj.com/articles/amazon-partners-with-atlas-air-worldwide-for-cargo-services-1462455676)


What is also interesting is all of these operators are heading toward a pilot strike..


DHL under fire as American pilots eye strike action over German influence on US airlines - The Loadstar (http://theloadstar.co.uk/dhl-fire-american-pilots-eye-strike-action-german-influence-us-airlines/)

[bafanguy]

FYI:

First Atlas Air provided Amazon freighter due in the next quarter (http://www.aircargoweek.com/atlas-air-amazon-freighter-due-quarter/)

Here's a pic:

"The Atlas Air provided Boeing 767-300 Freighter is the first of 40 aircraft the online retailer has agreed to lease through Atlas Air and ATSG."

http://www.aircargoweek.com/amazon-shows-freighter-aircraft/

[paradoxbox]

FedEx and UPS could have made a killing on this, for whatever reasons they screwed up, probably asked for too much money. They've likely created a beast, I think Amazon is going to hurt them badly in the domestic markets, eventually. The aircraft will be good for moving stuff quickly across the continent but the end-delivery process is still the weakest link in the chain in the US and Canada. Rue the day when Amazon comes up with some kind of practical scheme to deliver packages to the end user (And I'm not talking about the drone junk)

FWIW Amazon has partnerships with local carriers for end-user delivery in Japan. It's a tenuous relationship but it has held up so far, with both companies seeing benefits.

[atpcliff]

Atlas flew the first Amazon flight (with a plane painted in the Amazon colours) a few days ago. Atlas got 20, ATSG (ABX and ATI) got 20, and I think Kalitta was offered 20, but that didn't work out...so Amazon has 20 more planes to farm out to someone.

Atlas sold its Florida West operation...that was acquired when Atlas bought Southern. FL West has it's own certificate. The rumour is Amazon bought it, so they could have their own airline...maybe they'll fly the other 20 planes themselves, with the FL West certificate...

[Intruder]

Where did you read about the sale of FW? The Atlas 10Q only said it has been offered for sale...

[bafanguy]

The latest:

Morale is sinking, pilots for Amazon cargo say in survey | The Seattle Times (http://www.seattletimes.com/business/amazon/morale-is-sinking-pilots-for-amazon-cargo-say-in-survey/)

[bafanguy]

But:

"Atlas is pleased with progress it is making in implementing a fleet of 20 Boeing 767-300 aircraft for Amazon, and its focus is on e-commerce and the express markets, rather than traditional air cargo where growth has slowed."

Atlas Air upbeat on future of air cargo as it looks to e-commerce (http://www.aircargoweek.com/atlas-air-upbeat-future-air-cargo-e-commerce/)

[bafanguy]

FYI:


ATI intends to hire at least 72 pilots in 2017. The hiring window is January thru March with 2 classes per month. Each class is scheduled at 12 pilots each.

Home based

First Officer new hires receive B757/767 wage rate of $76.11 per hour at a fifty-six (56) hour guarantee for a twenty-eight (28) day bid unit ($55,408 annually). This pay rate commences on the first day of training. Additionally, during training new hires receive; 1) transportation to/from home of record and the training facility, 2) per diem and 3) hotel accommodations. Second year First Officer pay increases to $82.70 per hour.

https://www.airtransport.cc/

[Intruder]

With Atlas, Kalitta, and ABX hiring, why would anyone choose ATI if he had a choice?

[bafanguy]

"...why would anyone choose ATI if he had a choice? "

Intruder,

I don't really know but assume more will apply to each company than they hire...and everybody needs to go somewhere.

Is ABX all that good a gig ? They seem to have had a spot of labor "difficulty" recently. Not a good sign.

[bafanguy]

This is a bit of confidence in the concept shown by Amazon:

Amazon to build Cincinnati air cargo hub (http://www.aircargoweek.com/amazon-build-cincinnati-air-cargo-hub/)

[3pointlanding]

Paradoxbox
FedEx did not screw up. Our margins were quite low with Amazon and was only 1.5% of our total business. The rule for Amazon is squeeze, squeeze, squeeze. That should go over really well with low paid pilots. Atlas is in a bind and if they want the Amazon business let them pass airplanes they don't have to Amazon. Their performance during our peak was to say the least not outstanding. And as for FedEx, we didn't get this big by being stupid. The good folks up at Hacks Cross already have it figured out.

[bafanguy]

FYI:

Atlas has acquired all 20 767s to be operated for Amazon | Airframes content from ATWOnline (http://atwonline.com/airframes/atlas-has-acquired-all-20-767s-be-operated-amazon?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+AtwDailyNews+%28ATW+Daily+News%29)

[Intruder]

Now Atlas has to figure out how to man them. While hiring and training at a pace they cannot sustain, they are still losing net pilots (-5 for Dec-Jan).

[bafanguy]

"Now Atlas has to figure out how to man them. While hiring and training at a pace they cannot sustain, they are still losing net pilots..."

Intruder,

Looks like you're right. The statement below from a UPS guy on another forum giving advice to someone about jumping the gap from regional to legacy. Atlas mentioned:

"Not sure where you're at but at some point you have to think about going to Atlas or Spirit or somebody else not on your list that's a step up. I bet we hired 15 Atlas guys in the last few months..."

If I could bet on the outcome, I'd bet Atlas will fill all the seats they need to...just gonna have to "readjust" their attitude. ;-))

A P.S.


"In January 2017 alone, the pilot attrition rate at Atlas Air more than doubled compared to the monthly average for 2016, with 30 pilots leaving for other airlines and 6 pilots not showing up for their hiring class."

http://aviationtribune.com/airlines/north-america/abx-air-pilots-win-resolution-forced-overtime/

[atpcliff]

I mis-read the article. Atlas did not find a buyer. It recently shut down the Florida West operation...

[bafanguy]

Bit of an update on Amazon:



According to the Houston Business Journal, the e-commerce company is currently in talks with United Airlines regarding the possible acquisition and conversion of some of its oldest passenger-configured B767s.


https://www.ch-aviation.com/portal/news/63035-amazon-air-boosts-fleet-to-32-b767s-eyes-more