Why Amazon's new aircraft deals don’t spell doom for UPS and FedEx

Discussion in 'The Latest UPS Headlines' started by cheryl, May 23, 2016.

  1. cheryl

    cheryl I started this. Staff Member

    Why Amazon's new aircraft deals don’t spell doom for UPS and FedEx - Yahoo

    In March, Amazon signed a deal to lease Boeing 767 widebody freighter aircraft to handle some of its own domestic deliveries.

    "Deals to lease 20 freighter aircraft from Air Transport Services Inc. and 20 more from Atlas Air Worldwide will give Amazon a fleet with an aggregate payload capacity roughly one-fifth that of FedEx and about one-fourth that of UPS," Moody's analysts wrote. "This would enable the company to move more than 20%, and possibly as much as 30%, of its volumes with its own fleet."

    Does this spell doom for UPS and FedEx? Not likely.

    While the shippers will take a hit on the top line, profits are unlikely to suffer too much as Amazon is actually a very low margin customer because of the enormous discounts it gets.