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Amazon expands Prime Air at Charlotte

CHARLOTTE, NC: October 10, 2016. ABX Air and its sister company Air Transport International (ATI) are now operating B767 Amazon Prime Air services from Charlotte, NC to Stockton, CA; Allentown, PA; Chicago/Rockford, IL; and Ontario, CA.

ABX and ATI are part of the Air Transport Services Group (ATSG) based in Wilmington, Ohio. In Charlotte, ATI operates out of a facility just south of the airport's east runway. Amazon has four warehouse and fulfillment centers in North and South Carolina two hours or less by truck from Charlotte.

ATI B767In March this year ATSG signed a deal to lease 20 B767 aircraft to Amazon Fulfillment Services, an affiliate of Amazon.com, to operate a U.S. domestic air cargo network, and agreed to give Amazon the option to acquire up to 19.9 percent of the company's common stock over a five-year period. By September, ATSG had put 10 aircraft into service.

"Since last summer, we have been working closely with Amazon to demonstrate that a dedicated, fully customized air cargo network can be a strong supplement to existing transportation and distribution resources," said Joe Hete, president and CEO.

Amazon followed the ATSG deal with a contract in May 2016 to lease 20 Atlas Air B767s for seven to 10 years, and to acquire up to 20 percent of Atlas Air Worldwide Holdings (AAWI) over a five-year period.

Now AAWI has signed with Boeing for the manufacturer to convert nine B767 passenger airplanes into freighters for use on behalf of Amazon. Boeing said its current market outlook forecasts a need for 400 widebody conversions over the next two decades, with strong demand for 767 freighter conversions "due to a rise in e-commerce".

In addition to lease contracts with Amazon, Amerijet, Cargojet (Canada), DHL and West Atlantic (Sweden), ATSG has joint ventures in China with Okay Airlines and VIPShop as a result of the expanding eCommerce market in SE Asia.

ATSG reported EBITDA of US$103 million in H1 2016 and is forecasting US$218 million for the full year. The contract with Amazon now accounts for 22 percent of revenue according to company sources.

Charlotte International Airport is linked to the global economy by 15 cargo airlines, handled nearly 130,000 tons in 2013, and has the only U.S. intermodal facility located between its two runways that is connected by air, rail (Norfolk Southern) and 300 trucking companies.

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