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Hawaiian Airlines will operate 10 cargo planes for Amazon.com starting next fall under a deal that could eventually involve more planes and give Amazon a 15% stake in the airline.
The airline's parent company, Hawaiian Holdings Inc., said Friday that it will fly and maintain an initial fleet of 10 leased Airbus A330-300 jets for the retail giant. The fleet could grow depending on Amazon's future business needs, the company said.
Hawaiian said it issued warrants that Amazon can exercise over the next nine years and acquire up to 15% of Hawaiian stock.
Shares of Hawaiian Holdings jumped 13% in afternoon trading on Friday.
When travel plunged and consumer spending spiked early in the pandemic, airlines began carrying more cargo and demand for freighter planes grew. More recently, the cargo business has cooled off as consumer spending shifted away from goods toward services including travel, and airlines have been stuck with excess cargo capacity.
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Global demand for cargo fell 8.3% in August compared with a year earlier, the International Air Transport Association reported this month.
Hawaiian said it won't use any of its current planes to serve Amazon. Instead, Amazon's air division will lease the first 10 planes -- which will be converted from passenger jets to freighters -- from leasing company Altavair.
This relationship provides a catalyst to grow our business and the unique opportunity to diversify our revenue sources while capitalizing on our established strengths, said Hawaiian CEO Peter Ingram.
The A330-300 is a large, two-aisle plane that usually has about 330 seats when used for passenger flights.
Philippe Karam, director of Amazon's air fleet, said the jets will be the largest and newest planes flying for Amazon Air.
Amazon brands its fleet as Prime Air, and it has struck previous deals with both passenger and cargo airlines. In 2019, Sun Country Airlines announced it would operate 10 converted Boeing 737 aircraft for Amazon. Under a deal with Atlas Air, Amazon took warrants that could be converted into a 20% stake in the cargo carrier.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
