Amazon Air, the on-line giant’s fleet of aircraft and operations at numerous airports, continues to rapidly expand its assets and market coverage, leading some to believe Amazon will sooner rather than later compete for parcel shipping business with other carriers.
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| In August, Amazon officially opened its new $1.5 billion air hub at CVG, which the report said “was a seminal moment in the carrier’s development.” |
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That according to the latest report, released last week, from Joseph Schwieterman, Borja González, Mitchell Hirst and Abby Mader of the Chaddick Institute for Metropolitan Development at DePaul University. The DePaul team began publishing detailed analyses of Amazon Air in 2020.
The report identifies several key takeaways from the analysis. Those include:
Amazon Air’s expansion during the spring and summer gives it a continuous presence at airports within 100 miles of more than 70% of the U.S. population.
And that share has been growing rapidly, increasing from 54.0% in May 2020 to 60.1% in February 2021 to 70.2% in August 2021, with growth of more than 53 million consumers within a 100 mile radius in just 15 months.
Amazon has added service to seven cities since the February report. In total, Amazon Air now regularly flies to 42 airports in the United States, including its territories, and more than a dozen international locations.
Amazon Air flight activity grew 17% between February and August 2021, facilitated by the addition of 14 planes.
Flight activity on planes registered to Amazon Air grew from an average of 140.2 per day in February 2021 to 163.5 per day in August 2021, which constitutes 17% growth over a roughly six-month period. (See graphic below).
The number of fully operational planes in the Amazon Air fleet grew from a reported 59 in February 2021 to 73 in August 2021, a 24% increase. These estimates do not include former Delta Air Lines and WestJet 767s in the process of being added.
Source: DePaul Universary
Amazon is increasingly reliant on the flights of partner carriers using planes that are not formally part of the Amazon Air fleet.
This is a bit surprising given the growth in Amazon’s fleet, but the DePaul report says that “we estimate that partner airlines operate 20 -30 daily flights that supplement Amazon Air flights in the US domestic market alone,” and others on international routes.
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The report also notes that in May, Amazon exercised its warrants to purchase a minority stake in Wilmington, OH-based ATSG group, a holding company whose subsidiaries include ABX Air and Air Transport International.
 Amazon is also increasing its activity with ABX Air, the remnants of what was Airborne Express before it was sold to DHL.
Flight schedules at Amazon Air’s hubs at Cincinnati airport (CVG) and Wilmington airpark (ILN) have become highly synchronized.
The report says outbound CVG flights concentrated during the mid-afternoon. While Wilmington’s occur in the middle of the night, similar to those at DHL – which also operates out of CVG - and at FedEx’s Memphis hub.
This two of Ohio Valley facilities, just 55 miles apart, are complementary in orientation and together have flights that reach airports within 150 miles of 182 million US residents. (The Cincinnati airport is actually located in Northern Kentucky.)
In August, Amazon officially opened its new $1.5 billion air hub at CVG, which the report said “was a seminal moment in the carrier’s development.”
The complex spans 600 acres and includes an 800,000-square-foot sorting center with robotic package handlers.
The report notes that flight activity at CVG has become more carefully synchronized over the past year, with the vast majority of inbound fights now arriving between 8 and 11 a.m. A wave of departures occurs between 2 and 3:30 p.m. These tightly woven “banks” of flights are well-suited to allow packages and inventory to be transferred between planes without long delays.
Amazon Air did not significantly expand flights at CVG immediately after it opened the hub, although the researchers expect a concerted build-up by early 2022.
The Wilmington hub schedule is in some ways the mirror image of CVG, having mostly evening arrivals between 4:30 and 10 p.m. and early morning departures between midnight and 1:30 a.m.
In term of predictions, the DePaul researchers believe Amazon will expand flight operations by another 12-14%, bringing its daily total to more than 180 by January 2022, not including flights by partner airlines, which, too, are likely to grow more numerous.
They also predict there will be robust expansion at both Cincinnati CVG and Southern California’s San Bernardino International Airport, resultisng in what could become two “superhubs,” one in the Ohio Valley and another in California.
Finally, the DePaul researchers think Amazon Air will gain a foothold in smaller markets as it deploys ATR-42/72 turboprop airplanes. The three such planes that are expected to join Amazon Air’s active fleet are well- suited for serving mid-size cities, such as those in the Mountain States and Great Plains that are considerable distances from existing Amazon airports.
When will Amazon start competing with existing parcel carriers for non-Amazon shipments? No word on that here but previous reports have make it clear the authors believe that is an almost certainty at some point.
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