Online retailer and supply chain services provider is expected to increase its ownership in Atlas Air and ATSG, with stock offerings that accompany additional plane leases.
Amazon, the online retailer and supply chain services provider, has been offered a nearly 40 percent ownership in one of its main air transport operators, Atlas Air Worldwide Holdings.
The agreement allows Amazon to essentially acquire another 10 percent of Atlas Air’s common stock at $37.50 per share, on top its existing 20 percent ownership which it acquired as part of the May 2016 agreement to lease 20 Boeing 767-300 cargo planes from the carrier based in Purchase, N.Y.
According to Atlas Air’s March 27 filing with the U.S. Securities and Exchange Commission, the latest stock purchase by Amazon may be exercised through May 4, 2023, at increments of 37,500 shares “each time Amazon has paid $4.2 million of revenue to AAWW, up to a total of $420 million, for incremental new business beyond the leasing or operation of the 20 Boeing 767-300 series aircraft.”
In addition, Amazon will lease B737-800 cargo planes from Atlas Air through its subsidiary Southern Air for a term of seven years, with options to extend that agreement to 10 years.
Five B737-800s will be placed into service this year for Amazon.
“Amazon may, in its sole discretion, place up to 15 additional Boeing 737-800 aircraft into service with Southern Air by May 31, 2021,” Atlas Air said in its SEC filing.
During its investor meetings in Milwaukee and Chicago last week, Air Transport Services Group (ATSG), another air cargo aircraft provider, noted that last year it entered a deal that provides Amazon with 10 additional B767 leases by the end of 2020. Amazon also received an offer to acquire 33.2 percent of ATSG shares, and options for additional stock purchases based on additional aircraft leases.
ATSG, which began offering air cargo service to Amazon in late 2015 on a trial basis, currently provides the company 20 dedicated leased B767 freighters, which fly domestically.