Amazon expands internal P2F management team

[caption id="attachment_415152" align="alignright" width="500"] A Delta Air Lines 767-300ER similar to those Amazon has acquired to convert on its own. Photo/Delta[/caption] Amazon posted a job advertisement this week highlighting its search for a Senior Program Manager to manage passenger-to-freighter conversions on its behalf, suggesting the company’s recent feedstock purchase was not a one-off and that Amazon may seek to control a greater degree of the freighter conversion process as its owned fleet expands. The candidate will be tasked with creating protocols “for future P2F conversions that will support continued growth of the AIR network,” according to the job description. The role expands the capabilities of the existing Amazon Air team to source MROs and negotiate contracts and manage the conversion process internally. In terms of responsibilities, the demands of the role resemble existing positions at leasing and express companies that manage passenger-to-freighter conversions. “Both FedEx and Amazon have large teams that manage the purchase, conversion and delivery of freighters,” said a source who is in talks with Amazon to convert aircraft. While the e-commerce giant had relied on third-party lessors and other entities to handle the conversion process for its leased freighter fleet, Amazon last year began purchasing feedstock to convert on its own. Now that Amazon Air has moved beyond the proof-of-concept stage, “Amazon is looking at buying and converting most of their new freighters,” the source told Cargo Facts . The company has so far acquired and is in the process of converting eleven 767-300ERs . It’s unsurprising from a cost perspective that long-term fleet plans favor owned over leased aircraft, according to Stephen Fortune, principal of Fortune Aviation Services. Furthermore, owning the aircraft, but sub-contracting its operation allows Amazon to shed risk to other parties, because a pure CMI operation is a lower-margin and higher-risk proposition for a group like Atlas or ATSG, said Fortune. For a company without its own air operator’s certificate, there are other challenges currently alleviated by its third-party partners. The e-tailer does not have to train and hire crews and can largely avoid labor negotiations, which have posed challenges for many ACMI operators in recent years . Amazon’s contracts with ATSG and Atlas that include both a lease and operational agreement also include favorable terms for aircraft maintenance and other delays. Decoupling the dry-leasing component from aircraft operations leaves a less-appealing work package on the table for Amazon to outsource when considering the dry-leasing component is typically the most profitable aspect of an ACMI deal. The freighter-converted 767s currently operated on behalf of Amazon Air by affiliates of ATSG and Atlas Air Worldwide are dry-leased from leasing affiliates of ATSG and Atlas. This split dynamic began to change when ATSG-affiliate Air Transport International began operating 767-300Fs that were dry-leased to Amazon by Titan Aviation. More recently, Southern Air and Sun Country Air have started to provide CMI operations for 737-800BCFs leased from GECAS. CMI deals exist for widebody freighters, but are usually accompanied by other ACMI deals, or customer ownership in the airline, as is the case with some DHL-owned 777Fs operated by AeroLogic, DHL’s JV carrier with Lufthansa. It is unclear which carrier will operate the incoming 767-300Fs, or which conversion house will handle the latest batch of aircraft acquired from Delta. Earlier this week, in a press release about its purchase of, and plans to convert, eleven 767-300s, Amazon confirmed its intention to “continue to rely on third-party carriers to operate these new aircraft.”

Amazon expands internal P2F management team

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