Amazon (AMZN - Free Report) announced that it will add six additional Boeing 767 converted cargo aircraft to its fleet.
The planes are being leased from its existing partner Air Transport Services Group, Inc. (ATSG - Free Report) . This May, Amazon partnered with ATSG’s subsidiary, Air Transport International to provide crew, maintenance and insurance.
The latest move is in sync with the company’s deepening focus on expanding air cargo operations in a bid to ensure timely delivery of the rising number of ordered goods.
The news comes on the heels of the announcement of Amazon’s acquisition of a Boeing 767 cargo plane.
This move is another step taken by the e-commerce giant to strengthen in-house shipping and logistics services for supporting Prime-based ultrafast delivery services and expanding its fulfillment network.
Additionally, the latest announcement holds promise for the company during this coronavirus-led crisis, due to which consumers are afraid of stepping out of their houses and hence, are ordering every item online.
The company has been witnessing a flurry of orders since the onset of the pandemic-led lockdown.
Expanding fleet operations will add strength to its 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.
Continual Expansion of Air Fleet
In addition to 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 (AAWW) to expand the 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 further enhance delivery services in order to sustain the company’s customers and Prime momentum.
Therefore, we believe that it is moving in the right direction by gaining control over the delivery services network, which is likely to continue providing it with 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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