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Aircraft leasing company Air Transport Services Group (ATSG) is expanding its aircraft leasing agreements with internet retail giant Amazon.

The developments include agreements to lease and operate 10 additional Boeing 767s for Amazon, extending leases for 20 767 aircraft ATSG currently provides, and extending the current agreement through which ATSG’s airlines operate those aircraft in the Amazon Air network.

In addition, Amazon will be granted warrant rights which, if exercised, would further expand its potential equity stake in ATSG. The arrangements also provide warrant incentives for Amazon to lease up to 17 additional cargo aircraft from ATSG.

Dave Clark, senior vice-president of worldwide operations at Amazon, said: “By expanding the Amazon Air network through our partnership with ATSG we are able to ensure we have the capacity to quickly and efficiently deliver packages to customers for years to come.”

Joe Hete, president and CEO of ATSG (pictured). “As the world’s leading source of customer-dedicated 767 cargo aircraft, we have the access to aircraft and unmatched operating capabilities to continue to support Amazon Air for many years to come.”

Cargo Aircraft Management (CAM), ATSG’s leasing subsidiary, will deliver five of the 767s in 2019 and the remainder in 2020. All the leases will be for 10 years, with the possibility to extend them for up to three more years.

Existing five-year leases of 12 767-200 aircraft to Amazon from CAM that began in 2016 will be extended by two years into 2023, with an option to extend for up to three additional years.
Current seven-year leases of eight 767-300 aircraft to Amazon from CAM that began in 2016 and 2017 will be extended by three years until 2026 and 2027, with an option to extend for up to three additional years.

Hete added: “We view the prospect of a strong, growing customer like Amazon becoming a significant equity holder as a positive for all ATSG stakeholders.”

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