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Amazon buys 11 Boeing 767s to expand its cargo fleet
- notatoad 6y agoper wikipedia, it looks like amazon's current fleet is 66 aircraft, and prior to this news had already ordered 15 additional 767-300ER. https://en.wikipedia.org/wiki/Amazon_Air https://en.wikipedia.org/wiki/Amazon_Air
- tidepod12 6y agoOf note, all of those 66 planes are leased from and operated by other cargo airlines, like Atlas Air. Amazon doesn't own the planes or employ the pilots, they just lease the ability to paint the Amazon logo on the side and have the planes fly routes they choose. It's unclear if the planes mentioned in the OP are talking about Amazon actually outright purchasing planes (which would be a first) or if they are just leasing more. edit: Actually the article does say this at the bottom: >Amazon launched its own air cargo fleet in 2016 and, prior to Tuesday's news, the company leased 80 planes, but the move is the first time the company has bought their own
- jandrese 6y agoI wonder if this means they'll be hiring their own pilots? Or are they buying the aircraft and then leasing them out to an air freight company to handle the operations? Basically the same situation but better for Amazon's taxes.
- jaywalk 6y agoThey'll almost certainly have another company handling operations and maintenance.
- granzymes 6y agoBloomberg confirmed that the purchased planes will be operated by contractors. https://www.bloomberg.com/news/articles/2021-01-05/amazon-makes-first-aircraft-purchase-to-expand-delivery-network https://www.bloomberg.com/news/articles/2021-01-05/amazon-ma...
- lordnacho 6y agoWhat's the point of painting the planes in your own colors?
- notatoad 6y agoIt impresses the other billionaires.
- petra 6y agoPlaying the stock market game.
- cosmodisk 6y agoThe same as putting your name on a skyscraper. Whenever you are over a city or landing with your private jet, you can always tell the guy sitting in front of you: oh,look, there they are! Remember I told you I bought 12 new Boeings?
- dkjaudyeqooe 6y agoLeasing is standard procedure in the industry. There is no point tying up billions in planes when those dollars could be more productive elsewhere. These were probably not leased because they were very cheap and had relatively little future value, making them unattractive for leasing companies.
- deleted 6y ago[deleted]
- tschwimmer 6y agoAs the other poster noted, these are the first outright purchases of planes, vs previous planes were leased from aircraft leasing companies. My understanding is that when you lease, the leasing company handles all the maintenance and crewing and you only specify the routings. Obviously when you buy planes, you're responsible for everything yourself. You can however contract out maintenance and crewing to other contractors.
- verhey 6y agoGenerally there's "wet" leases (aircraft + at least one crewmember) and "dry" leases (just the aircraft). There are also different certification requirements between the two lease types. [1] I believe as of late Amazon has been dry leasing aircraft and contracting with Air Transport International, Atlas, Sun Country, and others for crew and potentially maintenance as well. [1] https://www.aopa.org/news-and-media/all-news/2020/march/pilot/for-the-record-who-is-in-control https://www.aopa.org/news-and-media/all-news/2020/march/pilo...
- dkjaudyeqooe 6y agoThat's not how this sort of leasing generally works, it's more of a financial transaction, like financing a car. Airlines are more likely to buy packages of service from manufacturers (especially engines) and big service providers if they don't have enough scale or experience to do their own maintenance, regardless of how it was paid for.
- Mountain_Skies 6y agoIt's difficult to really get a grasp on Amazon's size but it was a bit eye opening the other day when I was driving down a rural road up in the mountains and passed by an Amazon delivery van. I would have assumed for such a remote location that they'd turn their packages over to the post office to deliver but apparently their delivery service is large enough now to service even the very rural areas.
- deleted 6y ago[deleted]
- echelon 6y agoYou're probably overlooking the Amazon distribution center that isn't far away.
- xnyan 6y agoI live in a small ruralish area (it's not uncommon for my neighbors to have horses and cows, backyard chickens are a dime a dozen) and at least 50 miles from the nearest amazon distribution center. Our "neighborhood" is 14 homes on 1 1/2 streets. A few years ago, the amazon sprinter van started making some some deliveries but fedex was more likely. Today not only does amazon exclusively deliver all their orders here, we've been upgraded to the larger boxy bread truck style van which makes deliveries to multiple homes in our micro neighborhood every day including Sunday. All anecdotal but it seems like amazon has made huge progress in their delivery infrastructure in a short period of time.
- sjg007 6y agoI heard on NPR that Amazon logistics delivers to a super remote Canadian town that event the post office has trouble delivering to.
- Mountain_Skies 6y agoMaybe they learned a lesson from all of the failed 'LaserShip' deliveries.
- recursion 6y agoThe sheer size of Amazon is mind boggling. Is there anywhere they've opened their logistics network to other operators yet? Like AWS but for their logistics.
- tidepod12 6y agoIsn't "logistics as a service" pretty much what Fulfillment By Amazon is? I could be totally wrong, but based on the past stories I've read about Amazon's negotiations with UPS and their growth of their own delivery network, I'd be surprised if they have much spare logistics capacity to open up to anyone outside the immediate Amazon ecosystem.
- discodave 6y ago> Isn't "logistics as a service" pretty much what Fulfillment By Amazon is? There is a lot of crossover between FBA, and a UPS or FedEx, but it's not 100%. FBA is basically B2C, as opposed to B2B or C2C. Back during the "peak lockdown" of April/May 2020, a little birdie told me about some of the steps that Amazon was taking to give the warehouses and delivery network a break from the increased demand. In other words, Amazon saw lots of unexpected growth due to the pandemic. It wouldn't surprise me if plans to launch "Amazon Logistics" or whatever as a separate line of business got pushed back due to the pandemic. Edit: I know for a fact that the leadership of the Logistics part of Amazon has expressed a desire to become the "4th flywheel" of Amazon, which is Amazon-speak for being a self sustaining, revenue generating line of business. But as you allude to, they have to soak up all the demand generated from the Amazon consumer business first.
- tidepod12 6y ago>Logistics part of Amazon has expressed a desire to become the "4th flywheel" of Amazon I'm not surprised at all if this is the long term game plan. I'm curious though, what are the first three flywheels? AWS, retail sales, and what? Alexa/Kindle devices? Prime Video? Advertising? All of those seem like strong contenders but I'm not sure they really rival the AWS/retail arms (yet).
- vmchale 6y agoMakes sense, they're getting good deals rn with the way airlines are doing.
- kd913 6y agoI remember watching a video from Wendover Production talking about the decline of 747 and A380s mainly due to a lack of guaranteed passengers to fill the plane routes in both directions. Exceptions being some airlines which are able to operate hub and spoke models and where fuel is cheap like the middle east airlines. Wouldn't these types of planes be more suitable for a role in logistics which can benefit the greater density of packing? I am guessing this is something to do with fuel savings, and new composite materials meaning that smaller planes are still more efficient. However, would that necessarily apply to recent 747s/a380s which I think have composite materials and can be retrofitted to efficient engines? I figure these specific planes must be on sale as they are withdrawn from service so I am curious about the use of 767s here.
- Theodores 6y agoThe 767s are twin engine and more efficient than the 747. The A380 never was a cargo plane, big that it is. It also has the four engines with the added maintenance.
- xvf22 6y agoCargo companies seem to have older fleets and the 767s are being displaced from passenger service and have a cargo conversation option. The a380 doesn't have a cargo conversation option as far as I've seen. Plenty of old 747s are in service for cargo flights. Kalitta air has a bunch of older 747s and Atlas has a sizable fleet including some 8Fs.
- formercoder 6y agoPretty sure I’ve read there will never be a cargo a380 because its max takeoff weight is low compared to its volume.
- csours 6y agoI think cause and effect may be chasing each other here. You're not wrong, but also the A380 was not designed to have a high takeoff weight because they never intended it to carry cargo, so it will never carry cargo because it has a low takeoff weight compared to its volume. It was a design decision to be a people mover. [0] 0: https://www.flexport.com/blog/airbus-a380-no-cargo-equivalent/ https://www.flexport.com/blog/airbus-a380-no-cargo-equivalen...
- jonwadsworth 6y agoWill Amazon start to transport other things; in addition to goods they are selling? Human transport? Compete directly with UPS/FedEx?
- recursion 6y agoThis is what I speculated above. Basically AWS for logistics. It can't be far off in many countries such as USA/UK
- bootlooped 6y agoYou can do FBA and ship orders that were not purchased on Amazon.com. I have no idea if it's pricing is competitive with other ways of doing this. A big selling point in using FBA in the first place is that's what Amazon.com customers want. Without that big piece in the equation it might not be worth it to use Amazon's fulfillment centers, at least not at whatever price they're charging.
- p1mrx 6y agoThey should do a human-sized version of Amazon Snowball.
- simonh 6y agoThis reminds me of when Ryanair bought 100 Boeing 737-800 aircraft in 2002 after 9/11 hammered the airline industry[0], a very bold forward looking move. It was good for Ryanair and for Boeing. [0] https://www.theguardian.com/business/2002/jan/24/theairlineindustry1 https://www.theguardian.com/business/2002/jan/24/theairlinei...
- nixass 6y agoRight now Ryanair has almost 200 737-800MAX on order, significant amount of these were added during MAX grounding as the prices went down a lot. Bold looking move again, but still shitiest airliner out there
- slaw 6y agoI am still waiting for refunds from Ryanair for cancelled flights in March.
- aglionby 6y agoI'm guessing they won't come unless you chase it. Nothing happened to my refund for May flights until I called, after which the money came within a week.
- tgsovlerkhgsel 6y agoYou should probably either take them to whatever your local equivalent of small claims court is, or use one of the "we enforce your rights but take 30%" portals.
- younohoo 6y agoIf it’s any help, I eventually got mine. Just followed their online process. I’m in Canada. Didn’t get my refund from Air Transat (only a credit) and as long as the Canadian government allows this, I’ll probably be waiting at least another year to use the credit.
- stevekemp 6y agoI've still got an open dispute from KLM back in 2018! Every month I get a brief update to say it is still ongoing: > We’re contacting you about your claim for compensation for your KLM-Royal Dutch Airlines flight to Helsinki on 2018-09-11.
- moltar 6y agoI predicted in October of 2018 [1], that in 3 years Amazon will start flying freight directly from China to US fulfillment centers and cut out the middlemen (FBA sellers). Since then Amazon has been on-boarding sellers in China at a rapid pace. - [1] https://www.scaleleap.com/zine/just-in-time-air/ https://www.scaleleap.com/zine/just-in-time-air/
- grogenaut 6y agoTo me in 2014 it was really dumb that Chinese sellers were using USA middlemen to get on Amazon instead of just directly selling on Amazon. In general it seems dumb that any manufacturer isn't just selling direct to consumer if they have a consumer finished product on Amazon. However one insight into the reason is embedded in this anecdote: My friend was asked by a Chinese supplier to sell a thing on Amazon. But the seller then went on to try and transfer all of the inventory risk, and customer support risk to my friend. They then also refused to give a unique license to the product for Amazon to my friend and also undercut their offer to my friend with another random person in the USA. 6 months later the supplier listed V2 themselves on Amazon once the first person had built them a market and they could copy pasta all the english product info. Seller was left half their V1 inventory and had to sell at a loss to clear it. Luckily my friend only burned the Amazon seller fee during the trial period and their time.
- deleted 6y ago[deleted]
- throwaway201103 6y agoBeing a small-scale online reseller of someone else's product has always been risky. Low barriers to entry, no such thing as a regional territory, no motive for the manufacturer to protect or reward you over anyone else.
- bg24 6y agoOuch! Doing business is tough. Thanks for sharing.
- forgingahead 6y ago
- fumar 6y agoDo customers gain from Amazon's increased footprint? They are like a super organism growing and controlling distribution paths. Have there been other companies like Amazon in capitalist history? Google?
- jfim 6y agoProbably this one, over four hundred years ago: https://en.m.wikipedia.org/wiki/Dutch_East_India_Company https://en.m.wikipedia.org/wiki/Dutch_East_India_Company
- thepace 6y agoIf Amazon turns out to be similar to Dutch East India Company, we are looking at Amazon growing 200 years old with dozens of settlements and colonies all over the world.
- daveslash 6y agoRe>> "all over the world" You're forgetting about Blue Origin. Their website has a picture of a rocket standing on the moon that literally says "This Time To Stay"
- phobosanomaly 6y agoSuper interesting comparison. From the Wikipedia article: "...the company traded with Indianised Southeast Asian countries when the Dutch government granted it a 21-year monopoly on the Dutch spice trade." It's a dumb comparison, I know, but it strikes me as similar to how Amazon wound up with a pseudo-monopoly on many goods during the pandemic as brick-and-mortars were shuttered. And a quote in a quote from the article: "The Dutch, it seems, more than anyone in the West since the palmy days of ancient Rome, had more money than they knew what to do with. They discovered, unlike the Romans, that the best use of money was to make more money." Weirdly apropos.
- alanbernstein 6y agoSears
- cosmodisk 6y agoHere in the UK, Amazon dumped some of the largest last mile logistics companies and rolled out their own fleet of delivery vans.
- jldl805 6y agoIt's happened everywhere in the US now too.
- deleted 6y ago[deleted]
- cptskippy 6y agoThey've done it in the US as well. Pretty much every last mile logistics company in the US is beyond awful.
- notatoad 6y ago> Pretty much every last mile logistics company in the US is beyond awful. From everything I've heard, Amazon's own last-mile delivery service is also pretty awful. They haven't improved anything, just made the problem their own instead of anybody else's.
- lightgreen 6y agoSometimes it is not even vans, but old crappy passenger cars.
- chiph 6y agoA couple of years ago they ordered 20,000 Sprinters from Mercedes-Benz for the US delivery fleet. Previously, MB were selling about 27,000 yearly, so this one order tied up the factory for almost 9 months. https://www.trucks.com/2018/09/06/mercedes-benz-launches-production-sprinter-van/ https://www.trucks.com/2018/09/06/mercedes-benz-launches-pro... https://goo.gl/maps/V7DtAFqrYz7ZUTUg6 https://goo.gl/maps/V7DtAFqrYz7ZUTUg6
- cosmodisk 6y ago
- W-Stool 6y agoIf UPS is not looking over their shoulder, they should be.
- f430 6y agoThis almost guarantees intervention by usgov. The question is who has more lobbyists and voters? I am going to think UPS and others will team up. Everyday, an anti-trust lawsuit seems to be around the corner.
- thepace 6y agoI have been wondering about whether there is a limit to how much Amazon can grow in terms of number of industries they can expand into and also how big can they grow in each of those industries. At some point, there will obviously be attempts to create legislations to stop them from growing. Such legislative maneuvers will probably be rendered ineffective by intense lobbying. I think there has be change in consumer behavior and expectation to stop Amazon at this point. But will there be significant enough change in consumer behavior so that it is longer feasible for Amazon to grow so much?
- PopeDotNinja 6y agoI suppose the upper limit would be becoming the economy itself. Imagine monetary policy being set by https://treasury.amazon.gov https://treasury.amazon.gov.
- philwelch 6y agoJP Morgan, himself, used to do this.
- chii 6y ago> consumer behavior and expectation to stop Amazon at this point why? if amazon is providing a service that people want (and pay for) at a very competitive price (either by making economies of scale that only they have, nor by leveraging existing business assets they own like AWS), then theres' nothing wrong.
- megablast 6y agoYou must love monopolies.
- tsjq 6y agoIf they face resistance, They might do like Google -> Alphabet , or might become a holding company like BRK.
- drKarl 6y ago
- lawguy 6y agoAmazon's air safety record is less than stellar. Prime Air had a fatal 767 incident in early 2019. https://www.ntsb.gov/investigations/AccidentReports/Pages/AAR2002.aspx https://www.ntsb.gov/investigations/AccidentReports/Pages/AA... In the accident flight, the first officer (FO) inadvertently activated the "go around" mode during landing, then, in surprise, pushed the airplane into the ground. > According to one check airman at [FO's previous airline], the FO could explain things well in the briefing room and performed some expected tasks well in the simulator. However, when presented with something unexpected in the simulator, the FO would get extremely flustered and could not respond appropriately to the situation. She said that when the FO did not know what to do, he became extremely anxious and would start pushing a lot of buttons without thinking about what he was pushing, just to be doing something.
- deleted 6y ago[deleted]
- dpifke 6y agoThanks for the link to this. The full report (PDF) makes for interesting reading: https://www.ntsb.gov/investigations/AccidentReports/Reports/AAR2002.pdf https://www.ntsb.gov/investigations/AccidentReports/Reports/... Some additional damning quotes: Another check airman at Mesa said the FO’s stick and rudder skills were weak, and he also struggled with basic flight management system tasks. This check airman described the FO’s piloting performance as among the worst he had ever seen and noted that the FO tended to have an excuse for each of his poor performances, such as blaming his simulator partner, his instructor, or the hotel. A third check airman at Mesa said that the FO had weak situational awareness, did not realize what was going on with the airplane at times, and had difficulty staying ahead of the airplane. She said the FO was completely unaware that he lacked skills, unwilling to accept feedback, and unhappy with her about his failure to upgrade to captain. An instructor who taught cockpit procedures on the flight training devices at Air Wisconsin Airlines recalled that during one emergency procedures training scenario, the FO made abrupt control inputs that triggered the stick shaker and overspeed alerts. The instructor said that instead of staying engaged in the scenario and addressing the problem with his training partner, the FO just stopped what he was doing and turned around and looked at the instructor. The instructor found this reaction highly unusual. Turns out Amazon didn't know about any of these failures, because here's your government in action (inaction): Ten years ago, Section 203 of the Airline Safety and Federal Aviation Administration Extension Act of 2010 mandated that the FAA create an electronic pilot records database (PRD), which was intended to improve the timeliness and efficiency of the PRIA records retrieval process by providing hiring operators and DAs with direct access to pilots’ FAA, NDR, and former employer records in a single database. By 2016, the FAA had not yet implemented the PRD, and Congress imposed an April 30, 2017, deadline, which the FAA also missed. Although the FAA has begun phasing in the use of the PRD, the PRD is not yet fully functional; it contains only pilots’ FAA records and is available to hiring operators for use on a voluntary basis.
- bonkabonka 6y agoHopefully Amazon (or maybe it was Air Transport Group that did the hiring since the planes were leased from them) has implemented a better training regimen since their crash[0] about two years ago. [0]: http://avherald.com/h?article=4c497c3c/0002&opt=7680 http://avherald.com/h?article=4c497c3c/0002&opt=7680
- dunmalg 6y agoAtlas Air, ATSG, and the like provide the pilots and therefore the training. Amazon has nothing to do with it.
- bonkabonka 6y agoOther than the logo on the plane, of course. :P
- WhoCaresLies 6y agostate funded companies help each other, nothing new, and then people wonder how american companies become so big it's just like china capitalism? only on the surface, but behind the scenes it is worse than comunism, think only a very few profit from it
- f430 6y agoSo the guy who owns Washington Post has everything to gain by continuing the relationship with an authoritarian regime that harvests organs from dissidents and "cultists". Sort of like how Nazi Germany was IBM's best paying client running concentration camps.
- yawaworht1978 6y agoIt is incredible how big Amazon became. Considering the circumstances. They treat many employees like slaves with something just above minimum wage. Anti transparent pricing on everything from video to aws. Horrible ui on the platform with an incredible amount of fake reviews and products. The prices arent even better than elsewhere. I will boycott until they treat staff fairly or replace them with robots, they can treat the robots as they please but having working conditions similar to a north korean re eduction gulag is something I will not be supporting.
- internet_user 6y agoBezos doesn't event want to fly cargo on 737 MAX-8? Surely they sell at a nice discount these days? Weird.
- gauviv 6y agoIf this news can help to remember that behind a click on Amazon (or others), we need a physical flow to bring it at home. Who can believe their promise with such a news? https://sustainability.aboutamazon.com/about/the-climate-pledge https://sustainability.aboutamazon.com/about/the-climate-ple.... Of course it's easy to point the finger of blame to the others (here Amazon). But we are all responsible to consume many things we don't need.
- ChrisMarshallNY 6y agoThe 767 used to be my fave passenger plane (the 737 is my least favorite). I don’t think any airlines use them anymore, though.
- Havoc 6y agoKinda surprised they're not buying Boeing 737 MAX for cargo. You'd imagine there would be some good deals to be had
- pil4rin 6y agolikely because the 767 size & range is larger.
- michaelt 6y agoAmazon buys retired planes from other airlines - like [1] built in 1991, flown by Quantas then Westjet, now used by Amazon; or [2] built in 1994, flown by Sobelair, then Vietnam Airlines then Air Europa then Kenya Airways then Nordwind Airlines then Atlas Air, now used by Amazon. The 737 MAX might be cheap, but it's not 25-30 year old plane cheap. [1] https://www.planespotters.net/airframe/boeing-767-300-n503az-amazon-prime-air/rmkg83 https://www.planespotters.net/airframe/boeing-767-300-n503az... [2] https://www.planespotters.net/airframe/boeing-767-300-n1997a-amazon-prime-air/e2lp8r https://www.planespotters.net/airframe/boeing-767-300-n1997a...
- Havoc 6y ago>The 737 MAX might be cheap, but it's not 25-30 year old plane cheap. That makes sense. However a newer plan also has a longer expected usage and likely lower fuel and maintenance cost. So looking at absolute cost only doesn't really make sense. Presumably Amazon crunched the numbers though