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Amazon has taken a minority stake in Air Transport Services Group, an air freight partner that operates a significant portion of the company’s fast-growing aviation logistics unit.
Amazon has exercised warrants in ATSG that will allow it to acquire approximately 13.5 million shares of the freight airline at an exercise price of $ 9.73 per share, or more than $ 131.9 million. dollars, ATSG said in an SEC statement Monday. In a separate deal, Amazon also bought about 865,000 shares of ATSG, without an exchange of cash, the filing said.
ATSG shares climbed more than 4.9% early Monday afternoon. Amazon’s actions were largely unfazed.
Amazon has held warrants in ATSG since 2016. It has secured warrants under a 20 Boeing 767 lease to ATSG, one of its first deals with a freight company to expand its booming airline fleet . Amazon also holds warrants to buy a minority stake in competing carrier Atlas Air Worldwide Holdings.
Amazon’s airline fleet, launched in 2016, is a critical part of its drive to provide one- and two-day delivery. The company still relies on ATSG and Atlas Air to fly a large portion of its packages, but it has started to integrate some air cargo operations in-house, reinforcing the belief that Amazon Air could one day compete with FedEx and UPS.
In a first for the company, Amazon in January bought 11 used Boeing 767-300s from Delta and WestJet. The company is expected to lift the veil later this year at its $ 1.5 billion air hub in northern Kentucky, which has a capacity of 100 Amazon-branded aircraft and is expected to handle around 200 flights per day.
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