Some might say that Amazon is getting too mighty and others might comment that they are heavily involved in the U.S. American market, but not being successful in establishing themselves in Asia or expanding fast enough in Europe. Whichever of these points may be true, fact is also that Amazon is intent on expanding their aircraft fleet to meet future demand in both the U.S. and Europe.
Too much competition in Asia?
Alibaba, JD.com, China Post and a host of other firmly established and upcoming e-commerce outfits in China have in a relatively short period of time been very successful in establishing themselves as market leaders in this sector in China, southeast and northern Asia.
The above are markets which one would assume that Amazon would have invested heavily in during the past years.
Seemingly not so!
A recent Reuters report states that Amazon is planning to close their Chinese online storefront as of mid-2019, making it very difficult, if not impossible for the American e-commerce giant to compete in the Chinese market in the future. For details view our report: Amazon Quits Chinese Marketplace Business in this CFG issue.
Does this mean that Amazon will leave parts of the Asian e-commerce market mainly to its Chinese competitors and concentrate on further expansion elsewhere, predominantly in Europe?
Fleet expansion is moving fast
Expansion in Europe means that Amazon will have to put more emphasis on distribution channels on the continent. It’s no secret that surface transport in most European countries, especially in Germany and the U.K. has reached a stage whereby delivery times are endangered due to heavily clogged motorways and roads within the cities. It’s not just Amazon who suffers under this problem. DHL, FedEx, DPD and UPS package delivery services are suffering as well.
Will Amazon then have to move to a faster and more reliable delivery programme in Europe? And will this mean that they’ll invest in short-to-medium haul freighters which can operate from their main European hubs into other regional areas.?
It’s interesting to note that this has already started in the USA. They leased five B737-800Fs through Atlas Air and GECAS which will be operated by Atlas daughter company Southern Air for a seven to ten-year lease period. This is the first time that Amazon has moved from their traditional longer range B767 freighters.
Market observers expect that they will do the same sort of deal within Europe in the near future.
Will Amazon pick Irish ASL Aviation as partner?
There are operators here who could very well supply Amazon with aircraft for short- or long-term periods and give Amazon a faster and hopefully more efficient transfer into other European outlying areas, thus expanding their reach.
CargoForwarder Global recently reported that Amazon now has the means to take almost 40% of both Atlas and ATSG shares, thus giving them more or less the say as to how their fleets should be operated.
This might happen in Europe as well.
They’d need a reliable partner and the rumours on the market are that Dublin-based ASL Aviation is in discussion with Amazon as to how and where ASL could operate B737 freighters for them within Europe. ASL already carries Amazon e-commerce shipments on their inner-European services, but until now has no exclusive agreement with Amazon. ASL have two B737-800 freighters in operation for FedEx.
In a recent interview in the German newspaper Frankfurter Allgemeine, Amazon’s German CEO Ralf Kleber was quoted as saying that “Amazon is just in the startup phase.”
It would therefore not be surprising to see Amazon Air in the European skies in the near future.
John Mc Donagh