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 issued warrants in ASTG allowing it to acquire approximately 13.5 million shares in the cargo airline service at an exercise price of $ 9.73 per share, or more than $ 131.9 million, ASTG said in an SEC filing on Monday. . As part of a separate deal, Amazon also bought about 865,000 shares of ASTG, without exchanging money, the submission states.
Shares in ATSG rose more than 4.9% early Monday afternoon. Amazon stocks are largely motionless.
Amazon has owned warrants in ATSG since 2016. Warrants were granted as part of a deal to lease 20 Boeing 767s from ATSG, one of the earliest deals with a cargo company to expand its burgeoning air fleet. Amazon also owns warrants to buy a minority stake in rival Atlas Air Worldwide Holdings.
Amazon’s fleet, launched in 2016, is a critical part of its push to deliver one- and two-day delivery. The company still relies on ASTG and Atlas Air to fly a large portion of its packages, but it has begun to bring in air cargo operations, giving confidence that Amazon Air could one day compete with FedEx and UPS.
For the first time for the company, Amazon bought used Boeing 767-300 jets from Delta and WestJet in January 11th. Later this year, the plan is to lift the veil on its $ 1.5 billion air hub in northern Kentucky, which has capacity for 100 aircraft offered by Amazon brands and is expected to handle about 200 flights a day.