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Is Amazon’s Prime Air expanding European operations?

Amazon Prime Air aircraft at Cincinnati airport. Photo credit: Shutterstock

Citing the German publication Deutsche Verkehrs Zeitung (DVZ), a recent Lloyd’s Loading List article suggests Amazon is expanding its European air operations. If true, Amazon could threaten the control of the European express market by the triumvirate of DHL, UPS and FedEx.

Europe is not necessarily the largest express market, but it is one of the largest cross-border markets.

According to Cross-Border Commerce, a European network and knowledge platform for all eCommerce and omni-channel players, 23 percent of European e-commerce is cross-border, estimated at 137 billion euros, a 13.2 percent increase from 2017.

Amazon expanded its online retail platform into Europe in its early days. In terms of net sales, Germany and the U.K. are among the company’s largest markets outside of the U.S. Amazon achieved year-over-year growth in 2018 net sales in those two countries of 17.3 percent and 27.7 percent respectively.

Rumors began swirling in late 2015 that Amazon was working with DB Schenker and using a wet-leased Boeing 737 freighter operated by charter carrier ASL France to connect cities in Poland, Germany and the U.K. Indeed, Cargo Facts confirmed that a Boeing 737 was being operated by ASL on a Monday-Saturday, six times weekly schedule between Wroclaw, Poland, Doncaster, U.K., and Kassel, Germany. All three of these cities are located near Amazon’s fulfillment centers.

In 2016, ASL France’s parent company, ASL Aviation Group, formally finalized its purchase of TNT Express, which included the Belgian subsidiary TNT Airways and Pan Air Líneas Aéreas, based in Spain. In addition, ASL also signed a multi-year service agreement to operate flights for the combined FedEx/TNT entity. At the time, ASL’s CEO said that the company hoped to fly 10 aircraft on a regular basis for Amazon. ASL Aviation was, at that point, providing Amazon with airlift mainly out of Poland to the U.K. and Italy to Germany.

ASL is a fascinating company and one that appears similar to U.S.-based ATSG and Atlas. According to its website, ASL consists of multiple companies including six airlines (seven airline operations), maintenance facilities and a number of leasing entities. ASL’s airlines operate under their own brands and they also operate passenger and cargo networks on behalf of major international customers including express freight integrators and passenger airlines. In February 2019, European fund management company STAR Capital Partnership LLP signed an agreement to acquire 51 percent of ASL Aviation Holdings DAC.

“It’s ‘fantastical’ to think Amazon Air is a threat.”

– FedEx CEO Fred Smith (December 20, 2018)

Is it? Mr. Smith may want to think again. According to DVZ, DHL airline European Air Transport (EAT) and ASL Aviation Group are now reported to be operating pan-European flights on a scheduled basis for Amazon.

The Leipzig/Halle Airport-based EAT is flying exclusively during the day for Amazon with its Boeing 757 freighters serving East Midlands (U.K.), Paris and Madrid, with the aircraft returning to duty on behalf of DHL Express for overnight intra-European operations.

Meanwhile, the website reported that since mid-April of this year, two Boeing 737 freighters are operating daily flights from Cologne-Bonn to Italy and Spain on behalf of Amazon, with ASL Aviation thought to be the supplier of the planes.

It’s almost as though DHL is following the old saying, “if you can’t beat them, join them.” Consider that Amazon just recently broke ground for its new air hub at the Cincinnati/ Northern Kentucky International Airport (CVG), which also just happens to be home to DHL’s Americas operations. Prior to the groundbreaking, Amazon had been using DHL’s facility at CVG to provide its services and it will likely continue until their hub is completed in 2021. DHL’s daytime workers focus mainly on sorting materials and servicing aircraft for Amazon’s 14 routes from the airport, while its night operations are focused on its other core international customers.

“Amazon’s Prime Air hub promises to revolutionize the fulfillment industry worldwide.”

– Kentucky Governor Matt Bevin

As Amazon continues to build both its U.S. and European air operations, what better way to combine the two operations via across the Atlantic Ocean by DHL Express, connecting CVG with Leipzig? Who’s to say it isn’t being done already, but if not, it seems very convenient for Amazon to utilize its existing partner at CVG and intra-European air partner for such services.

Cathy Roberson

Cathy Morrow Roberson is a market analyst with a research and economics background. Roberson began her career as a librarian; she was then an analyst at an e-commerce start-up; and was an analyst at UPS Supply Chain Solutions supporting market, competitive and mergers & acquisition research and analytic needs for 11 years. After a brief stint with specialized consulting firms, Roberson now manages the logistics-focused market research firm, Logistics Trends & Insights LLC, which is based in Atlanta, Georgia.