Amazon Air, the in-house cargo airline of the online retail giant, last week opened its first regional air hub in Europe and began flying to New Orleans as it rapidly builds out a network of airports to help meet growing customer expectations for faster order delivery.
The European air cargo base is very small small, but gives Amazon (NASDQ: AMZN) the ability to eventually challenge the Big Three express carriers – DHL, FedEx and UPS – for market share and comes at a time when e-commerce sales are surging around the world as people order goods for home delivery rather than shop at stores during the coronavirus pandemic.
The regional air hub is located at Leipzig/Halle Airport in central Germany, Amazon Europe said in a blog post. The Leipzig/Halle Airport is also home to DHL’s main European operation. The airport is connected to the trans-European motorway and railway networks, making it possible for trucks to reach 15 European countries within eight hours.
Packages from Amazon fulfillment centers in Leipzig, and elsewhere in Europe, will flow through the 20,000-square meter cargo facility to speed delivery for Prime members around the continent. The hub enables Amazon to eliminate the need for third-party parcel carriers and provide more flexible delivery options at a lower price.
Amazon Air has leased two Boeing 737-800 aircraft from GECAS, the commercial aircraft financing and leasing business of GE and contracted with ASL Airlines to fly them. The new facility, which unloads parcels from trucks and planes, sorts them by destination and reloads them on outbound equipment, is initially operating with two daily flights.
ASL Airlines, part of Dublin-based ASL Aviation Holdings, also operates aircraft on behalf of integrated logistics companies, including FedEx, and has been providing scheduled service for Amazon across Europe, according to several previous reports.
Amazon Air this year transported 29 million face masks, 100,000 thermometers and 3 million gloves that were distributed to employees in Europe to protect against COVID-19, Amazon said.
The two new aircraft, which wear the Amazon livery, put Amazon Air on track to have more than 70 aircraft in its fleet by the end of the year, the company said.
Amazon watchers say the company plans to expand air operations internationally.
Leipzig/Halle is the second largest airport in Germany for cargo after Frankfurt and number five in Europe. In September, cargo volumes there grew 18.6% to 120,758 tons – the largest growth for the month in eight years, according to the airport authority. For the first three quarters, volume is up 8.1% compared to 2019.
U.S. network expansion
Meanwhile, Amazon Air tweeted that it commenced daily cargo service at Louis Armstrong International Airport in New Orleans.
The Times-Picayune/New Orleans Advocate website reported that a single flight will arrive each day from one of 40 airports around the country where Amazon operates.
New Orleans is considered a gateway in Amazon’s network that connects to other points or larger hubs. Amazon does not have its own facility and will rely on airport workers to transfer packages to and from aircraft, the local news site said.
So far this year Amazon has opened two gateways in Hawaii and one in Austin, Texas; a regional air hub in Lakeland, Florida; and selected San Bernardino International Airport in California as its western U.S. hub, which is scheduled to open early next year.
Amazon Air is building a $1.5 billion national hub at Cincinnati/Northern Kentucky International Airport where it currently shares space with DHL Express. The new hub is scheduled to begin operating next summer.
The addition of three hubs within one year will significantly increase Amazon’s ability to move more freight, experts say.