
2023/3/27
Amazon Air has seen an increase in flights over the past six months, despite economic challenges that have affected e-commerce demand and an announcement that it would scale back some third-party operations.
A new study by the Zaddik Institute for Urban Development at depaul University in Chicago found that the airline's flight activity grew 5.8 percent from August through March 2022.
That compares with 3.8 percent growth in the first six months, but lags behind the 14 percent growth in 2021.
These statistics contrast with recent reports. Recent reports said Amazon took steps to cut its U.S. cargo business with leasing company Air Transport Services Group (ATSG) and began selling spare capacity on its planes due to global economic pressures and falling demand for e-commerce.
"An important takeaway from our analysis is that Amazon Air has not reduced flights in response to slower retail growth, despite a marked decline in its growth rate and minimal domestic growth," the report's authors said.
They added: "Several prominent players in the air cargo industry, including fedex and ATSG Group (contractor for Amazon Air), have recently warned that they may be flying less due to the recent sharp decline in demand.
"However, our analysis suggests that Amazon Air's growth is primarily due to Amazon's desire to accelerate its delivery options and protect market share amid increasing competition from other online platforms and brick-and-mortar stores launching new amenities.
"While the recession may lead to a shift in strategy and a significant reduction in growth rates, we believe there are still compelling reasons for Amazon to expand its aviation business."
Amazon Air's activity at its main Cincinnati-Northern Kentucky International Airport (CVG) hub is expanding rapidly, with daily flights increasing from 44 to 58 since September, according to the report.
Between September 2022 and February 2023, the number of flights on Amazon Airs-branded aircraft increased by about a third (31.5 percent), from 43.9 to 57.7 flights per day, an increase of about 125 percent over the past year.
The company's fleet is also stable in size and activity, the research report said.
Between September and February, the number of reported fleet aircraft remained stable at between 89 and 92. As a result, we estimate Amazon Air is flying 2-3% more flights per aircraft than it did six months ago."
There was also an increase in partner flights involving non-Amazon Air aircraft, the study found.
"Partner flights across the system have also grown, albeit modestly. We estimate that these aircraft account for about 15-20% of Amazon Air's total capacity, but must acknowledge the uncertainty of their possible range."
The study noted that Amazon's expansion of capacity in CVG makes it more competitive as a U.S. delivery operator.
However, domestic flights grew by only 2.8%, while domestic activities not involving CVG fell by 1.5%.
In addition to CVG, Amazon is integrating at three other centers in the United States: Fort Worth Alliance in Texas, SAN Bernardino International in California, and Lakeland in Florida.
Expansion in the continental United States will remain relatively slow through early 2024, but CVG's expansion will continue with a hub approach that will support its fleet utilization and use of available payload capacity, while also benefiting third-party transportation and efforts to expand flights within Europe and India, the report said.