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August 2016: News Item A-1: "Amazon Showcases 1st Branded Air Cargo Freighter" by (ATW) Linda Blachly & Mark Nensel, August 9, 2016.
Online retail and technology company Amazon showcased its 1st branded air cargo freighter airplane on August 5 during Seafair’s Air Show, an annual community celebration in Seattle, Washington. The Boeing 767-300F, operated by Amazon’s air cargo freighter provider, Atlas Air (TLS), flew in the air show.
“Creating an air transportation network is expanding our capacity to ensure great delivery speeds for our "Prime" members for years to come,” Amazon Senior VP Worldwide Operations Dave Clark said.
The 767-300F, named "Amazon One," is one of 40 Amazon (AZO) has agreed to lease through air cargo partners, Atlas Air (TLS) and Air Transport Services Group (ATSG). There are currently 11 dedicated 737-300F freighter airplanes flying for Amazon (AZO), with additional freighters rolling out over time.
At the end of July, Amazon secured permission from the (UK CAA) to trial unmanned aerial vehicle operations, or drones, for parcel delivery.
To view a video about the launch of Amazon One, see as follows:
Video courtesy of Amazon.
Later, a Boeing 767-300F converted freighter flight from Seattle to Wilmington, Ohio marked the inauguration of Amazon (AZO)-dedicated air cargo service being provided on a contract basis by Atlas Air Worldwide Holdings (AAWH).
Seattle-based online retail company Amazon (AZO) in May reached an agreement with Purchase, New York-based Atlas Air (TLS) to wet lease 20 767-300F converted freighters, the second freighter lease deal it signed this year. Amazon (AZO) earlier this year struck a similar agreement with Wilmington, Ohio-based Air Transport Services Group (ATSG), which also will operate 20 767Fs on behalf of Amazon.
The Atlas Air (TLS) 767-300F that flew August 11 bore Amazon’s "Prime Air" livery. By the 2nd half of 2018, all 20 Atlas 767-300Fs dedicated to Amazon (AZO) are expected to be in service.
September 2016: Online retailer Amazon (AZO) has been found guilty of shipping dangerous goods by air, in a case bought by the UK Civil Aviation Authority (CAA).
(AZO) is facing large fines after a jury at Southwark Crown Court found it guilty September 20 of 4 counts “of causing dangerous goods to be delivered for carriage in an airplane.” The 4 offenses covered a period between January 2014 and June 2015, and relate to shipments being flown within and out of the UK.
The (CAA) said that dangerous goods found in Amazon UK Services shipments included lithium-ion batteries and flammable aerosols. Lithium-ion batteries are banned from being transported as mail or cargo on passenger airplanes, unless they are installed in or packed with equipment. This is because of concerns about battery instability and thermal runaway, which can cause fires and may have led to a number of freight airplane losses. We work closely with retailers and online traders to ensure they understand the regulations, and have robust processes in place so their items can be shipped safely,” (CAA) General Counsel Kate Staples said. “Whenever issues are identified, we work with companies to make sure those issues are addressed appropriately. But if improvements are not made, we have to consider enforcement action and, as this case demonstrates, we are determined to protect the public by enforcing the dangerous goods regulations.”
Amazon (AZO) is due for sentencing on September 23.
Tony Osborne, email@example.com
October 2016: "Boeing to Convert 9 767s for Amazon's Cargo Fleet"
by Dominic Gates firstname.lastname@example.org, Seattle Times Aerospace Reporter, October 12, 2016.
Atlas Air (TLS) is having Boeing (TBC) convert 9 used 767 passenger airplanes that (TLS) will fly as part of its 20 jet airplane "Prime Air" fleet for Amazon (AZO).
To deliver the freighter airplanes more quickly, Boeing (TBC) may open a new 767F freighter conversion line to take on some of the work at one of its existing joint venture (JV) airplane modification facilities in China or Taiwan.
(TLS) started leasing and flying its 1st "Prime Air" 767F for Amazon (AZO) in August. "The remaining 19 airplanes that are being leased to operate for (AZO) are expected to enter service through 2018. Atlas (TLS) has acquired "the vast majority" of the 20 used passenger airplanes it will need for the (AZO) contract and has secured all of the necessary slots at freighter-conversion facilities (including the 9 mentioned above).
Atlas (TLS) based in Purchase, New York State, announced last May that it would lease 20 767-300s to Amazon (AZO), as the on-line retail giant (based in Seattle) moves to aggressively expand its package-delivery logistics with its own dedicated air cargo fleet.
Those airplanes were in addition to the 20 767 jets (AZO) agreed to lease in March from freight carrier the Air Transport Services Group (ATSG) of Wilmington, Ohio.
Boeing (TBC)'s current market outlook forecasts the need for 400 wide body jet conversions over the next 20 years, with strong demand for 767F freighter conversions due to a rise in e-commerce.
Boeing (TBC) currently completes all its passenger-to-freighter conversions at a facility in Singapore, at a (JV) with aircraft maintenance firm (ST) Aero. However, demand for 767F freighter conversions - not only from (AZO) but also from other express package carriers such as FedEx (FED), (UPS) and (DHL) for operation in the USA and in Asia (is high enough that Boeing has been studying whether to open a 2nd conversion line).
A senior air cargo executive said Boeing is far along in an approval process to open a 2nd 767 conversion line, either at its maintenance (JV) with China Eastern Airlines (CEA) in Shanghai or at Evergreen (EVA) Aviation Technologies in Taipei, Taiwan (with the latter now favored).
Used 767 airliners can be acquired for $10 million or less, and converting them to freighters costs another $15 million or so.
November 2016: "Judge Orders Striking Cargo Pilots Back to Work" by David Koenig, & Mae Anderson, "AP" November 23, 2016.
A federal judge on November 23 ordered pilots for a cargo airline that delivers Amazon packages to go back to work. The judge in Cincinnati said that it was in the public's interest to end the strike because holiday shoppers expect to receive their packages on time. "Imagine Christmas without Amazon!" USA District Court Judge Timothy S Black wrote in his ruling.
About 250 pilots (FC) for (ABX) Air went on strike early on November 22 in a dispute over working conditions and time off. Dozens of flights and >1 million pounds of cargo were held up.
(ABX) went to court to end the strike, saying its timing threatened to leave millions of dollars' worth of freight undelivered to homes and stores during the Christmas shopping season. (ABX) parent, the Air Transport Services Group (ARSG) Inc said pilots (FC) would begin returning to work November 23 night. The Teamsters union, which represents the pilots (FC), said the strike was causing (ABX) to cancel about 75 flights a day. Besides Amazon, (ABX)'s other major customer is Deutsche Post AG's (DHL) delivery service.
Analysts said an extended strike would have forced Amazon (AZO) to put more of its deliveries in the hands of (UPS), FedEx (FED) and the US Postal Service. The strike's impact would be short-lived (a few days, said Satish Jindel, President of Logistics Adviser (SJ) Consulting Group. "I don't think it's going to disrupt e-commerce or Amazon (AZO)," he said.
Even before the judge's ruling, Morningstar retail analyst R J Hottovy noted that Amazon (AZO) and other retailers have contingency plans to deal with disruptions of any sort (from weather to strikes) during the holidays. (AZO) has spread its deliveries among a larger number of carriers, from the post office down to small providers.
Amazon (AZO) has been trying to reduce its dependence on (UPS) and FedEx (FED) since those companies delivered millions of packages late during the 2013 holiday season. This year, Amazon (AZO) leased planes from (ABX) and another cargo carrier, Atlas Air (TLS), and began building its own ground-transport system.
The surge in online shopping (which is growing faster than in-store shopping) and promises of free shipping have put additional stress on delivery companies like (ABX). The (ABX) pilots (FC) said management violated their contract to keep planes flying. The union said the company is denying vacation time for some pilots (FC) and compensatory time off for others just to keep all its planes flying.
"We are doing all sorts of emergency shifts because we don't have enough people," said Tim Jewell, a union officer who flies Boeing 767 jets for (ABX). "It's taking a tremendous toll on our families."
Jewell said pilots (FC) will abide by the judge's order and return to work, "but manning and staffing will continue to be a problem."
(ABX) argued that the union was violating federal law by conducting a strike before checking off the necessary steps that federal law requires before a work stoppage in the airline industry. (ABX) President John Starkovich said the company would continue negotiations and arbitration to settle its differences with the union.
Labor relations at railroads and airlines are governed by a federal law that dates to the 1920s and makes strikes difficult. Most airlines haven't had a strike in many years, although pilots (FC) for Spirit Airlines (SPR) walked off the job in 2010.
February 2017: News Item A-1: "Amazon Selects Kentucky for Huge Air Hub" by Angel Gonzalez, Seattle Times Business Reporter, February 1, 2017.
* 2,700 jobs are linked to $1.5 billion project.
* "Prime Air" fleet is key part of Amazon's logistics.
Amazon (AZO) said February 1st it would build a massive hub for its expanding air operations at the Cincinnati/Northern Kentucky Airport in Hebron, in the northern part of the "Bluegrass" state.
Kentucky officials say the project means a $1.49 billion investment by Amazon over several years, and the creation of 2,700 full- and part-time jobs in loading, unloading and sortation facilities.
The move places the center of Amazon (AZO)'s air operations in an area that's thick with the company's warehouses and that's geographically well situated to serve a far-flung e-commerce domination.
Until now, Amazon (AZO)'s feldgling air-cargo fleet in Wilmington, Ohio, home of Air Transport Services Group (ATSG), 1 of the 2 firms that operate jets leased by Amazon (AZO). That facility is expected to close eventually.
The new hub would boost the already significant number of Amazon employees in the area. Amazon said it employs 6,000 people in Ohio, just across the border from the hub.
Amazon said it plans to offer jobs at "any Amazon site across the USA "to the workers currently sorting packages in Wilmington. Amazon has leased 40 jets from (ATSG) and Atlas Air Worldwide (TLS) to speed up the delivery of products to members of its $99-a-year Prime loyalty program. So far, 16 of these airplanes are flying in the Prime Air operation. Amazon's incursion into airfreight is part of a major focus on logistics by an e-commerce giant that says it's growing so fast that it needs to complement traditional logistics providers such as FedEx (FED) and (UPS).
The deal was announced after the Kenton County Airport Board approved a 50-year lease for Amazon, according to a news release from Kentucky Governor Matt Bevin's press office. State authorities preliminarily approved $40 million in tax incentives for Amazon.
Angel Gonzalez: 206-464-2250, email@example.com
News Item A-2: "Amazon Sees Impact of Trump's Entry Ban Firsthand" by Angel Gonzalez, Seattle Times Business Reporter, February 1st, 2017.
* Job offers in limbo.
* Employees stuck outside USA; overseas trips canceled.
Dozens of staffers and their dependents with offers in hand now possibly being reassigned to countries other than the USA and an Iranian Movie Director is barred from attending "Oscar" night. That's how Amazon.com put human faces on costs it has borne from the White House's controversial entry ban on nationals of 7 Muslim countries.
In a declaration filed with the Washington state Attorney General's suit against January 27th's executive order from President Trump, Amazon (AZO) Executive Ayesha Blackwell-Hawkins detailed how the surprise edict interfered with the smooth running of Amazon, the world's largest e-commerce firm.
Expedia, the Bellevue Washington state online travel company, also submitted a declaration in support of the lawsuit.
Blackwell-Hawkins, Amazon's Senior Manager Mobility & Immigration said the order "immediately (and negatively) impacted employees, and candidates for employment with Amazon.
Amazon's move to back the Attorney General's (before her almost immediate sacking by Trump) suit came amid widespread
backlash in the tech industry against the temporary restriction, which the administration said will protect the USA from terrorist infiltration while the government figures out ways to improve vetting of travelers.
From Google to Lyft, companies joined the outcry, but Amazon's response, involving the court system, seemed to go a step further than most. (In addition to Expedia and Amazon, Washington State University, the American Civil Liberties Union of Washington and the University of Washington also filed declarations in support of the state lawsuit. Microsoft reportedly said it was providing information to help the state build up its case).
Amazon (CEO) Jeff Bezos said January 30 that the company does not support the order, and that it's reaching out to congressional leaders to "explore legislative options" and is considering "other legal options as well."
Part of the order's ripple effect results from the lack of clarity, according to Amazon. Amazon said it was "unclear" whether it meant that people born in the 7 countries, regardless of their citizenship, were affected.
It was also unclear whether dual nationals of the 7 named countries and other nations were targeted by the order as well. "In order to comply with the order and to ensure the safety of our employees, we assume the Executive Order covers both scenarios, Amazon wrote.
Amazon identified 49 USA-based employees born in Syria, Iran, Libya, Yemen, Somalia, Sudan and Iraq. 47 of them are citizens of another country not covered by the order, and the remaining 2 are permanent residents of another country. Amazon has also identified 10 dependents of those employees born in one of the nations targeted by the order.
One of the employees is a Libyan-born Senior Attorney who's been a UK citizen "for many years." The employee was planning to to travel to the USA for business in February, but was told by Amazon to cancel her plans. Amazon also has 7 Iranian job candidates with job offers who are all citizens of either Germany, Canada or Australia and could be banned for entry into the USA. Amazon is "assessing alternatives" that could include basing those candidates outside the USA.
Expedia's declaration, filed by Expedia's General Counsel Robert Dzielak, focuses on 2 Bellevue-based employees who were born in 1 of the 7 countries and cannot travel outside the USA because of the order. Expedia, the Bellevue travel company also pointed to the impact on its customers, which are spread across the world. At least 100,000 from the 7 countries have used Expedia since it launched online travel in 1996.
Some customer situations are more immediate. >1,000 people with passports from one of the 7 countries have booked trips that include flights to, from or through the USA.
Amazon's big push to produce or acquire the rights to original movies, which yielded 7 Oscar nominations, has also been affected by Trump's
executive order. Iranian filmmaker Asghar Farhadi, whose film "The Salesman" is in the running for "best foreign motion picture," won't be able to attend the Academy Awards ceremony in Los Angeles next month. Amazon Studios distributes the film.
News Item A-3: February 2017: Atlas Air Worldwide Holdings (AAWH) has secured all 20 767-300s it will wet lease to Amazon (AZO), according to President & (CEO) Bill Flynn.
Purchase, New York-based Atlas (TLS) has also secured freighter conversion slots for all of the used airplanes. It is additionally acquiring one spare 767-300 to dedicate to Seattle-based Amazon (AZO).
(TLS) last year inked the wet-lease contract with (AZO) and started operating the 1st 767-300F for (AZO) under the Prime Air brand in August 2016. (AZO) has also signed a similar 767-300FR wet-lease deal with Ohio-based Air Transport Services Group (ATSG).
By the end of 2018, (TLS) will have placed all 20 767-300Fs in service for (AZO), Flynn told analysts while discussing the air cargo company’s 2016 earnings. The airplanes are being converted by Israel Aerospace Industries (IAI) and Boeing (TBC), he said.
Flynn noted there is a “good feedstock” of used airplanes available to convert to freighters.
March 2017: News Item A-1: Amazon (AZO) (CEO) Jeff Bezos has a new Technical Adviser, a desirable position that is often called Bezos' "shadow." Jeffrey Helbling, previously VP in the Kindle division, stepped into the role in January, according to his Linkedin profile. The position which involves daily work with Bezos, has served as a springboard for many other successful executives within the company.
News Item A-2: 767-319ERF (24875, N331AZ) of Air Transport Services Group (TIN) (part of Atlas Air Worldwide Holdings (AAWH), ex-(N385CM), operates for Amazon (AZO) Prime Air.
May 2017: May 2017: Atlas Air Worldwide Holdings (AAWH) posted a net loss of -$752,000 for the 1st quarter of 2017, reversed from (AAWH)’s +$471,000 net profit in the year-ago quarter. Additionally, Atlas (TLS) President & (CEO) William Flynn said the company has placed 2 Boeing 747-8Fs with Hong Kong-based Cathay Pacific (CAT) Cargo on an (ACMI) (Crew, Maintenance & Insurance) basis, with service beginning in May.
The Purchase, New York-based air cargo operator reported $475.4 million in operating revenue for the quarter, up +13.6% over $418.6 million in revenue for (1Q) 2016. Expenses were up +13.2% year-over-year (YOY) to $451.4 million. Operating income for the quarter was $24 million, up +19.8% (YOY). “We are building on our 2016 achievements and growing our earnings this year,” Flynn said May 3. “We will have a full year of contribution from Southern Air (SOF) and expect a positive impact on our full-year results from our service for Amazon (AZO).”
Atlas Air (TLS) completed its acquisition of Southern Air (SOF) in April 2016, and entered into a wet-lease agreement with Amazon (AZO) a month later, providing the Seattle-based retail giant with 20 Boeing 767-300Fs on an (ACMI) contract for an initial term of 7 years. (TLS) placed its 2nd 767-300 into service with Amazon (AZO) in February; 2 more are entering into service with (AZO) in May.
“In addition to Cathay Pacific (CAT) other significant new customer agreements with Asiana (AAR) Cargo, Nippon Cargo Airlines (NCA) and FedEx (FED) will all contribute to earnings growth this year,” Flynn said. “Earnings in the 1st quarter were in line with our expectations and our outlook for the year.”
Atlas (TLS) said its (ACMI revenue during the 1st quarter ($200.7 million, up +9.8% (YOY)) was primarily driven by (TLS)’ acquisition of Southern Air (SOF) and lower costs related to crew training, partially offset by increased heavy maintenance costs and the temporary redeployment of several aircraft to (TLS)’ charter business segment.
(TLS) reported a -$5.2 million unrealized loss on financial instruments during the quarter, related to outstanding warrants, cutting into (TLS)’ income from continuing operations net of taxes, which totaled $35,000 for (1Q) 2017 (compared to $471,000 in (1Q) 2016). On an adjusted basis, (TLS)’s 1st-quarter income from continuing operations net of taxes was $8.3 million, up +7.8% (YOY).
The company expects its full-year 2017 adjusted income from continuing operations net of taxes will increase by a mid-single-digit to low-double-digit percentage compared to Atlas (TLS)’s $114.3 million full-year 2016 adjusted income.
(TLS)’ total block hours flown in the 1st quarter increased +30.8% (YOY) to 55,116. (ACMI) block hours flown during the quarter grew +31.8% (YOY) to 38,946.
September 2017: "How Amazon is Changing Air Cargo Business" by
Aaron Karp, (ATW) Plus, September 22, 2017.
For Amazon Founder & (CEO) Jeff Bezos, it is still “Day 1” at the on line retail giant. That is the name of Amazon’s headquarters building in Seattle, and Bezos repeatedly emphasizes to employees that (even though Amazon was founded 23 years ago) they should think of the current day as if it is the 1st day of business. “Day 2 is stasis,” Bezos wrote in his most recent letter to Amazon’s shareholders.