Reportedly, Amazon (AMZN - Free Report) recently acquired a Boeing 767 cargo plane in a bid to strengthen its in-house shipping and logistics service to support the company’s Prime-based ultrafast delivery services.
The plane will operate under direct registration to Amazon unlike being leased like the previous cargo planes.
The latest move is in sync with the company’s deepening focus on expanding its air cargo operations in order to ensure timely delivery of the rising number of ordered goods.
The newly-acquired Boeing 767 cargo plane will be added to Amazon’s air fleet operations, joining a fleet of more than 80 aircraft.
The latest announcement holds promise for the company during this coronavirus crisis, due to which consumers are afraid of stepping out of their houses and hence, are ordering every item online.
The news comes on the heels of the Federal Aviation Administration’s (“FAA”) approval for Amazon to test commercial deliveries through its drone fleet.
Expanding the fleet operations will add strength to the company’s existing delivery capacity, which, in turn, will help it enhance the shopping experience of customers during this unprecedented time. This will continue to instill investor optimism in the stock.
Strong Efforts to Expand Air Fleet
The company already has 36 other 767s in its fleet. This June, the company partnered with Air Transport Services Group (ATSG - Free Report) to lease 12 additional Boeing 767-300 converted cargo aircraft.
The latest move is likely to aid the performance of Amazon Global Air in the near term.
Apart from the recent deal, Amazon teamed up with a low-cost carrier, Sun Country Airlines, last December for flying a fleet of 10 converted Boeing 737-800 freighters.
Additionally, the company’s partnership with Atlas Air Worldwide Holdings to expand its domestic air network is a positive.
The e-commerce giant’s tie-up with GE Capital Aviation Services to increase the number of aircraft is also encouraging. Per the deal, Amazon has leased 15 Boeing 737-800 aircraft from GECAS.
As part of the Amazon Air network, these cargo aircraft are expected to be fully operational by 2021.
Amazon is leaving no stone unturned to enhance its delivery services further in order to sustain the company’s customers and Prime momentum.
Therefore, we believe the company is moving in the right direction by gaining control over the delivery services network, which is likely to continue providing it a competitive edge over retailers like Walmart (WMT - Free Report) , Target (TGT - Free Report) and Kroger, among others, that are also making efforts to strengthen their delivery network in an effort to gain customer momentum.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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