Atlas Air Worldwide Holdings (AAWH) says it has signed a long term deal with Amazon, which could see the US online retailer acquiring up to 30% of the freight airline total common stock.
The deal says that Atlas Air will support Amazon’s deliveries operating tweet Boeing 767-300Fs on a CMI (Crew, Maintenance and Insurance) basis. The freighter will be supplemented with additional dry-leased capacity from Atlas’ Titan Aviation leasing unit.
The dry-leases have a term of 10 years, while the CMI operations will happen for 7 years with extensions for 10 years total.
Operations are expected to begin during the second half of this year and to reach full capacity in 2018.
The online retailer will also have the option of acquiring 20% of AAWH stock valued at US$37.50 per ordinary share. The purchase is tied to the twenty 767 freighters starting operations. Amazon also has the possibility to acquire an additional 10% of AAWH at the same price, over a period of seven years.
After the announcement, Atlas Air shares have skyrocketed, spiking up to 51%, because the airline also posted Q12016 earnings on Thursday, which were above estimates.
In March, Amazon has acquired a 9.99% stake in the Air Transport Services Group (ATSG) for around US$70 million and holds the right to acquire 10% more until 2021. Because of this contract, ATI (Air Transport International) and ABX Air will operate 20 B767 freighters for and on behalf of Amazon Fullfilment Services on five year contracts.