Amazon has finalized a deal with Air Transport Services Group (ATSG), an airline leasing company, to operate an air cargo network in the U.S.
The deal has Amazon leasing 20 Boeing 767 freight aircraft to carry out order deliveries for Amazon Fulfillment Services. ATSG will operate the aircrafts, along with ABX Air and Air Transport International.
The leases are for at least five to seven years; the operation agreement lasts for five years.
Amazon will also hold warrants giving it the right to acquire up to 19.9 percent of ATSG shares over a five-year period, which means the deal could expand significantly if the network proves successful.
The deal has been in the works since last summer, according to ATSG CEO Joe Hete, who said the companies have been working closely together to "demonstrate that a dedicated, fully customized air cargo network can be a strong supplement to existing transportation and distribution resources."
Amazon currently uses a combination of delivery services from UPS, the U.S. Postal Service and FedEx to carry out shipments, but the e-commerce giant has been looking into proprietary, high-tech alternatives for several years.
Last April Amazon was granted permission from the Federal Aviation Administration (FAA) to test-fly drones for its still-theoretical Prime Air delivery service. Since then Amazon laid out plans for airspace across the U.S. that would be dedicated to commercial drones.
The idea of using drones is still a novelty in retail, but Amazon has remained committed to the concept while still pursuing more commonsense logistics approaches, i.e. its own fleet of cargo planes.
"We offer ... ultra-fast delivery promises to a growing group of Prime members," said Dave Clark, Amazon SVP of worldwide operations, adding that the 20 planes would "ensure air cargo capacity to support one and two-day delivery for customers".