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Amazon Air will see development spurt this spring and will probably be much like an airline, in line with a research

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Amazon.com boxes are shown stacked near a Boeing 767 Amazon "Prime Air" cargo plane on display in a Boeing hangar in Seattle.

Ted S. Warren | AP

According to a study, the size of Amazon's aircraft fleet doubled between May 2020 and June this year, laying further foundations for Amazon Air to compete with the airlines FedEx and UPS.

Amazon Air currently flies an average of 140 times a day and is expanding its fleet, signaling a "growth spurt this spring," according to the report released Tuesday by DePaul University's Chaddick Institute for Metropolitan Development.

"As the fleet is expanded to include new aircraft, we assume that the number of flights will rise to over 160 by June 2021," said the report. "When this milestone is reached, Amazon Air will have roughly doubled in size in the 13 months between May 2020 and June 2021."

Amazon's air freight fleet is a key part of the company's strategy to meet increasingly ambitious one and two day delivery targets. The company quietly began testing its airfreight operations in Wilmington, Ohio in 2015 as part of a project codenamed Aerosmith. Since then, Amazon Air has grown rapidly, especially during the coronavirus pandemic.

Amazon leases most of its cargo planes through Atlas Air Worldwide Holdings and Air Transport Services Group, but bought 11 used Boeing 767-300 jets from Delta and WestJet in January.

When the 11 Boeing jets are in service by the end of 2022, Amazon will have a fleet of more than 85 aircraft. This is a far cry from FedEx with 679 aircraft and the UPS fleet of 572 owned, leased or chartered aircraft.

Still, analysts believe that Amazon's growth trajectory could initiate a collision course with large mail order companies. Morgan Stanley has predicted that Amazon could potentially leverage its end-to-end logistics activities to offer delivery services to third parties as early as this year.

DePaul researchers agree with Morgan Stanley's forecast, but believe it will be longer as Amazon waits for its $ 1.5 billion hub in northern Kentucky to open this year, possibly the 2021 holiday season as a test and then investigate the idea of ​​opening will pass on its logistics services to third parties.

"Amazon's entry into this business is expected to be in the next 18 months, and when that happens, Amazon Air – and the CVG / Wilmington hubs in particular – will be crucial," the study said.

Flights from the airports in Kentucky and Ohio, where Amazon's hubs are located, "already connect Amazon with most of the US population," they added.

The company offers next-day delivery service in the UK to third-party sellers who don't sell on its Amazon Shipping platform. This shows that it already has the "toe in the water" to offer its in-house delivery network to external parties, said Joseph Schwieterman, director of the Chaddick Institute, in an interview.

Amazon previously operated a similar service in the United States, but stopped the nascent program in April as the pandemic put heavy loads on its delivery network.

"I think they can become a niche business with some retailers integrating with the Amazon delivery network," said Schwieterman. "And that can be done without much risk."

"One step closer to an airline"

Aside from merely growing Amazon's fleet size, the company has taken other steps that could telegraph broader ambitions in the airfreight industry.

Amazon is bringing in some air freight operations instead of relying on outside contractors. In the past few months, the company has posted vacancies for maintenance managers and managers to oversee contracted airborne operators.

"If you are only leasing planes, you are not setting up in-house staff who have expertise in heavy maintenance and the like," Schwieterman said.

Any move away from contractors will develop slowly, at least in the US, Schwieterman admitted.

The company's first European air transport hub at Leipzig / Halle Airport in Germany, which opened last November, is a good example of how Amazon's future US airfreight operation could take shape. At the Leipzig / Halle hub, Amazon is now taking care of ground services such as loading and unloading parcels with its own employees. "This is one step closer to being set up like an airline," said Schwieterman.

Ultimately, it would allow Amazon to better control costs and delivery speeds if more air freight operations were relocated in-house.

"I think Amazon's enormously complicated supply chain is at risk when you are so dependent on a handful of contractors," said Schwieterman. "One of them is broke or one of them cuts the cord and suddenly you have a crisis.

"So I think that by getting expertise on how to run an airline, they can make strategic decisions about how much to methodically bring in," he added.

Amazon officials did not immediately respond to a request for comment on the study and their expansion plans for Amazon Air.

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Katherine Clark