Amazon said on Tuesday it bought 11 used Boeing 767-300 aircraft, as it looks to boost its delivery capabilities to cater to a surge in online orders.
The aircraft, including seven from Delta Air Lines and four from WestJet Airlines, will join Amazon's air cargo network by 2022, the online retailer said in a statement.
This is the first time ever that Amazon has acquired planes outright, according to CNBC.
Until now, the company had built up its Amazon Air fleet of aircraft through leasing agreements with other airlines.
In June, Amazon had leased 12 Boeing 767-300 converted cargo aircraft from Air Transport Services Group Inc.
By 2022, Amazon will have more than 85 aircraft in its fleet.
'Having a mix of both leased and owned aircraft in our growing fleet allows us to better manage our operations,' said Sarah Rhoads, vice president of Amazon Global Air.
The company said in October its heightened spending on delivery infrastructure would likely continue over years.
Amazon has expanded its fleet of aircraft. The Seattle-based firm announced that it bought 11 Boeing 767-300 planes. A wide body aircraft emblazoned with Amazon's Prime logo lands at Lehigh Valley International Airport in Allentown, Pennsylvania, in this 2016 file photo.
In 2020, the share price of Amazon surged by 76 per cent. On Tuesday, the price per share exceeded $27 before the close of trading on Wall Street
Seattle-based Amazon has been working to deliver most of its packages itself and rely less on UPS, the United States Postal Service, and other carriers.
Besides its fleet of planes, Amazon has also built several package-sorting hubs at airports, opened warehouses closer to where shoppers live and launched a program that lets contractors start businesses delivering packages in vans stamped with the Amazon logo.
Amazon said the 11 planes, all of which are Boeing 767-300s, will be converted to hold cargo instead of passengers.
The four jets that it is buying from WestJet will join Amazon’s fleet this year, and the seven from Delta will be ready by next year.
The company declined to say how much it is paying for the planes.
The value of the planes has plummeted this past year due to the coronavirus pandemic and its catastrophic impact on the tourism industry.
The aviation consulting firm Ascend by Cirium reported that in mid-December, the value of a Boeing 767-300ER plane dropped by about 15 per cent compared to its value at the start of the year.
Ascend estimates that each plane, which is believed to be about 20 years old, would be valued at between $13million and $14million per aircraft.
While wide swaths of the American economy has contracted during the pandemic, Amazon has had a banner year as lockdown measures forced consumers to rely even more on online retail.
People have turned to Amazon to order groceries, supplies and other items online, helping the company bring in record revenue and profits between April and June.
Amazon as a company is worth more than $1.61trillion, making it one of the world's most valuable brands. Amazon's corporate offices are seen above in Sunnyvale, California, in this January 2020 file photo
That came even though it had to spend $4billion on cleaning supplies and to pay workers overtime and bonuses.
Demand has been so high, Amazon has struggled to deliver items as fast as it normally does.
In September, the company had to hire 175,000 more people to help pack and ship orders in its warehouses.
Walmart and Target have also seen sales soar during the pandemic.
But other retailers have had a rougher time. J.C. Penney, J.Crew and Brooks Brothers have all gone bankrupt.
And Lord & Taylor, which has been in business for nearly 200 years, said it will be closing its stores for good.
Companies across other industries have announced buyouts or layoffs, including Coca-Cola and American Airlines.
In 2020, the share price of Amazon surged by 76 per cent. On Tuesday, the price per share exceeded $27 before the close of trading on Wall Street.
Amazon as a company is worth more than $1.61trillion, making it one of the world's most valuable brands.
In total, Amazon shares jumped 37 per cent year over year. In the third quarter of 2020 alone, Amazon reported $96.1billion in sales.
Its net income nearly tripled to $6.3billion, according to The Motley Fool.
In the second quarter, Amazon reported $88.9 billion in sales and a profit of $5.2billion. The company reported first quarter sales of $75.5 billion and a profit of $2.5billion.
The numbers on the company's fourth quarter earnings are due later this month.
While the company has raked in billions in profits, it has come under criticism for labor conditions at its facilities, particularly during the pandemic.
In October, Amazon said that more than 19,000 of its employees contracted COVID-19.
California is investigating the company over its sick-leave policies, sanitation measures, and data about the spread of the virus at the company’s warehouses in the Golden State.
The Guardian reported in May that Amazon had denied some requests for paid sick leave that worker activists alleged violated a California law giving two weeks’ time to staff at facilities where food is stored, like Amazon’s.
The pro-worker group IE Amazonians Unite said it contacted state officials on the matter and that ultimately Amazon notified personnel about the paid leave opportunity.
Amazon has denied wrongdoing.
