Amazon has taken to promoting Amazon Air vacancies based in Leipzig, Saxony, Germany on its own job site, as well as on LinkedIn, Xing, and a number of other job search platforms. At a time when many airlines are begging for government aid as their fleet remains grounded due to the corona crisis, is Amazon Air coming through as the proverbial phoenix?
The Amazon Air jobs themselves are not all that new, given that most were already published on 15JAN20, but they have recently been updated, leading to the assumption that – once applications are
in by mid-MAY20 – the company will start a series of virtual interviews (it publishes a guideline on how to prepare for virtual interviews on its website, as part of the COVID-19 update), and
possibly officially inaugurate its first European Amazon Air base this year. How will that change things for the current set up?
What about DHL and EAT-LEJ?
CFG already reported back on 20MAR20, that “the partnership is crumbling” between Deutsche Post and Amazon, as “Amazon is
increasingly operating its supply chains from beginning to end by itself”. We pointed out then that though “A large part of the feeding and distribution services will probably be carried
out by DHL Express and its regional fleet of B757Fs based at LEJ Airport […] much suggests that in the near future, flights across the Atlantic will be managed by Amazon itself, to the detriment
of DHL Express and its long-haul network.” It is DHL’s subsidiary European Air Transport Leipzig (EAT-LEJ), that currently mainly deals with Amazon’s cargo flights and ground handling is
also carried out by a service provider, yet with Amazon’s new 20,000m³ sorting and distribution center at LEJ due to create 200 new local jobs, possibly those operations will soon also be carried
out in-house.
Aircraft or cargo companies going cheap
Though Amazon Air currently leases its aircraft from other cargo airlines, the current crisis could see a move to sourcing own aircraft as a number of airlines look to selling off parts of their
parked fleet, and those who have recently remodeled passenger planes to temporary freighters may look to part with these off once the crisis is over. Amazon Air already has 5 Boeing 737-800 BCFs
and 35 Boeing 767-300 ERFs flying in its own livery on North America routes, and in SEP19 it acquired a minority 9.9% stake in Canadian freight cargo carrier Cargojet. Earlier that year, it
signed agreements with its two main air cargo freighter leasing companies to possibly acquire a 40% stake in Atlas Air Worldwide and a 33% ownership position in Air Transport Services Group.
Perhaps, Amazon Air will look to invest further in any currently struggling air cargo operators – such as Cargo Logic Germany which - according to the KFW IPEX-Bank analysis from JAN20,
had “received its flight licence after some delays and will focus on express cargo in the e-commerce segment. In competition with DHL – and as a potential transport partner of
Amazon.”
Increase in eCommerce
The 2-page KFW IPEX-Bank document from JAN20 bears the title “Who’s Afraid of Amazon: A flash analysis”, and one of its side headers reads “From leading online retail to the world's
fourth-largest cargo airline.” In just 4 years since its inception, Amazon Air has grown to from 10 aircraft to 50 and a planned 70 by 2021 and is now close on the heels of world-leaders DHL, UPS
and FedEx as it establishes itself as a global all-cargo operator.
The corona crisis has led to an even more dynamic growth in eCommerce, and a great many companies are being forcibly propelled to provide what has come to be known the “Amazon Effect”,
when it comes to digital transparency and super-smooth, swift supply chains. Amazon has already largely implemented its own network of to-door services within Europe, and the LEJ-based Amazon Air
is simply the next logical step in an autonomous, global supply chain.
Europe and Corona isn’t all plain sailing for Amazon…
Earlier last week, however, Amazon had to temporarily close all six of its distribution sites in France, Europe’s third largest eCommerce market, following a complaint from a French labor union
accusing the company of not providing adequate protection to workers during the coronavirus pandemic. This led to a French court ruling that it had to stop all non-essential deliveries during the
corona shut-down – which in France is currently planned to remain in place until 11MAY20 – or pay a fine of €1 million for each day it failed to adhere to the court order. Though its own staff
have been told to stay home for now, Amazon stated that it "will continue to serve our customers in France through independent companies that sell on Amazon," as it appeals the ruling. A
mere glitch in an otherwise powerful operation.
For when is Amazon Air LEJ take-off scheduled?
Though Amazon itself has not yet announced exactly when Amazon Air’s LEJ gateway will be fully operational, nor how large the fleet will be that will be stationed there, and the network it plans
to serve, an insider has stated to CFG that operations are due to go live in OCT20.
Over on its U.S.-homeland, Amazon’s plans to use Minneapolis-based low-cost carrier Sun Country Air as a freighter partner operating 10 B737F, are set to become reality already on 23APR20, since
the airline filed a request on 14APR20 for emergency exemption with the U.S. Department of Transportation.
Amazon Air does indeed appear to be rising despite the crisis.
Brigitte Gledhill
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