Amazon (AMZN - Free Report) is firing on all cylinders to expand e-commerce capabilities further on the back of its strengthening delivery system.
In sync with this, the e-commerce giant has teamed up with GE Capital Aviation Services (GECAS) to increase the number of its aircrafts. Per the deal, Amazon will lease fifteen Boeing 737-800 aircraft from GECAS.
These new cargo aircrafts are expected become part of Amazon Air network and will be fully operational by 2021, which will take the number of the company’s aircrafts to 70.
This deal underscores Amazon’s accelerated push toward building its own in-house shipping and logistics service to support its complex network of fulfillment, logistics and delivery systems.
Strategic Partnership: A Key Catalyst
The above-mentioned endeavor of Amazon is in sync with its continued focus toward enhancement of its goods shipment services.
We note that 737-800 cargo freight is efficiently designed to aid the company in delivering cargo efficiently and in time to customers, which in turn enhances shopping experience.
Apart from the recent deal, the company has also leased five other Boeing 737-800 from GECAS in the beginning of this year.
Further, the company expanded partnership with aircraft leasing company, Air Transport Services Group, Inc. (ATSG - Free Report) , at the end of 2018 to lease an additional 10 aircrafts which are expected to join Amazon’s fleet over the course of next two years.
Additionally, the company has received its 20th B767-300 converted freighter from the Atlas Air Worldwide Holdings (AAWW - Free Report) . This has fortified Amazon’s domestic air network.
Strengthening Freight Services
Amazon’s expanding aircraft portfolio bodes well for its ongoing work and investments for strengthening its air facilities at various airports.
The company joined forces with Woolpert for development of its airport project, Amazon CVG Air Cargo Hub, at Cincinnati/Northern Kentucky International Airport. Notably, the hub, which will start operating in 2021, will include several parking positions, huge airfield pavement, support facilities and various platform levels on completion.
Further, the company is geared up to open a regional air hub at the Fort Worth Alliance Airport and Chicago Rockford International Airport this year.
Further, Amazon Air is planning to set up a package-sorting facility and a new air gateway at Wilmington Air Park in 2019. The company’s plan is inclusive of daily flights. Notably, this project is likely to aid socially by creating numerous jobs in the Clinton County.
We believe strengthening freight facility and delivery services will aid the company’s dominant position in the global online retail market as it is likely to expand customer reach by reducing shipping times.
Zacks Rank & a Stock to Consider
Currently, Amazon carries a Zacks Rank #3 (Hold).
A better-ranked stock in the retail-wholesale sector that can be considered is IAC/InterActiveCorp (IAC - Free Report) which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for IAC/InterActive is pegged at 20.45%.
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