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Amazon Looks to Sell Excess Air Cargo Space as Demand Cools


Amazon Looks to Sell Excess Air Cargo Space as Demand Cools Inc. is trying to sell excess space on its cargo planes, according to people familiar with the matter, its latest effort to adjust from a rapid pandemic-era expansion to a slowdown in online growth.

The e-commerce retailer, which has a fleet of about 100 planes in the US and Europe, in recent months has hired executives with experience marketing cargo space for airlines. Possibilities include filling empty jets returning from Hawaii and Alaska with pineapples and salmon, according to two of the people. An Amazon spokesperson declined to comment on the plans.

The long-term plan for Amazon Air hasn’t changed despite the current turmoil, said one of the people, who asked not to be identified as the discussions are confidential. The pressure to make money from unused space aboard its jets is increasing as the company looks to boost profits in a period of slower revenue growth, another person said.

Amazon unveiled the air cargo service in 2016, prompting speculation that it would ultimately create an overnight delivery network to rival United Parcel Service Inc. and FedEx Corp. Amazon Air operates out of smaller regional airports close to its warehouses around the country, helping the Seattle-based company quickly move inventory to accommodate one- and two-day delivery.

The company’s ultimate goal has befuddled industry experts, who have written conflicting reports about Amazon’s ambitions. Fast growth in its earlier years and a $1.5 billion investment in a hub at Cincinnati/Northern Kentucky International Airport fueled speculation that the company was ramping up to be an overnight parcel service. Other investors said Amazon remains far shy of larger carriers like FedEx and UPS, which have more planes and more flight connections that don’t overlap with Amazon’s core online retail business.

Demand for air cargo has cooled this year, and is expected to tail off again in 2023. IATA, an airline trade group, projects the sector will generate sales of $149.4 billion, about $52 billion less than 2022 but still $48.6 billion more than in 2019.

Amazon’s flights in September grew at their slowest pace since the start of the pandemic, according to researchers with DePaul University’s Chaddick Institute for Metropolitan Development, who have been monitoring Amazon Air flights since 2020.

Despite slowing demand, Amazon in October announced it would add 10 Airbus A330-300 freighters starting next year through a partnership with Hawaiian Airlines. Amazon plans to also trim its fleet by not renewing some leases for aircraft with Air Transport Services Group, two of the people said.

Even the largest package carriers are tightening belts as consumers resume pre-pandemic spending habits, which takes pressure off the shipping industry. FedEx on Dec. 20 unveiled plans to cut $3.7 billion in expenses next year, with the cost cuts including using digital tools to rebalance flights between company-owned jets and lifts from third-party operators.

Amazon is offering space on its planes, and charter flights, said one of the people. The effort is the latest maneuver to address slowing online sales and a fragile economy that could be on the brink of recession, including subletting excess warehouse space and eliminating an estimated 10,000 jobs.

Pittsburgh International Airport

Amazon Air Launches Daily Cargo Service at Pittsburgh International Airport

On May 12, Amazon Air touched down at Pittsburgh International Airport for the first time, adding Pittsburgh to Amazon’s expanding U.S. cargo network. Amazon’s collaboration has been the biggest cargo win for the growing airport. Amazon Air packages will arrive Wednesday at Pittsburgh via a Boeing 737-800F freighter and depart Thursday morning.

Amazon Air has quickly grown to increase speed and selection for Amazon customers around the country, now flying to more than 40 United States airports. The new operation in Pittsburgh will allow Amazon to supply a growing logistics network in Western Pennsylvania. The partner lease agreement allows Amazon Air to use 50,000 square feet that include an onsite area to sort packages to their next destination managed by an Amazon logistics partner, Trego-Duncan Aviation. The new site is expected to create more than fifty new jobs.

Pittsburgh International Airport CEO, Christina Cassotis shared her excitement about the Amazon Air operations, she said, “We are excited that Amazon is continuing its investment in the region with the addition of Amazon Air operations at our airport, we welcome Amazon Air and look forward to building our partnership. This announcement is a major milestone in positioning PIT as an international logistics center.”

“Growing the network of sites where Amazon Air flies is essential to supporting fast, free shipping for our customers,” said Chris Preston, Director, Amazon Gateway Operations. “Today, with Pittsburgh International Airport as part of our Amazon Air network, we are closer to our customers and can support fast shipping for the items they rely on. We are proud of the investments Amazon has made in the Pittsburgh region and look forward to continued growth.”

In Regions like Western Pennsylvania cargo services great economic benefits due to the downstream economic impacts, including handling companies and trucking. Pittsburgh’s abundant space is the ideal geographic location that makes the perfect business plan to turn the airport into an international logistics center. Other than Amazon Air, Pittsburgh International Airport has also supported Finnair and Qatar Airways causing huge success.

“We are delighted to welcome Amazon Air to Pittsburgh. To have a major logistics company like Amazon locate here reflects confidence in our region and the opportunities at the airport,” said Allegheny County Executive Rich Fitzgerald. “This development, along with Finnair’s announcement, really underscores the fact that Pittsburgh is becoming a significant cargo and distribution hub.”

Pittsburgh is excited about their new collaboration with Amazon Air, they look forward to the possibilities Amazon Air will bring to the growing economy.