At the beginning of the month, Seattle-based Amazon announced plans to shutter its Prime Air operations at Wilmington Air Park (ILN) in Ohio, and construct a new “centralized air hub” at nearby Cincinnati/Northern Kentucky Airport (CVG) in Hebron, Kentucky – just 110 km to the southwest. (For a more detailed analysis, see Amazon to abandon Wilmington hub). Although no groundbreaking date has been set, CVG Airport told Cargo Facts it expects Prime Air cargo jets to begin arriving at CVG starting this spring. During the interim period until new facilities are built, Prime Air will utilize existing airport ramp areas.
The airport also recounted how it managed to beat-out other regions and convince Amazon to build its centralized air hub in Northern Kentucky. Like Amazon’s previous dealings, the move was swift and calculated. The airport said Amazon dispatched two teams to the region just a few months before a deal was inked. One team explored the availability of incentives with state and local government officials. In parallel, a second team held meetings with airport management and was tasked with defining the scope of the hub and securing the lease.
Both teams were successful; after just a few months, Amazon and the Airport Authority signed a term sheet (which will lead to a definitive lease) that will serve a blueprint for Prime Air’s future air hub. CVG said, “the term sheet specifies the lease of 900+ acres for a term of 50+ years at ‘fair market value’ for the construction and ongoing operation and maintenance of an air cargo hub by Amazon at CVG.”
Reflecting on the signed term sheet, CVG said it was selected because it had the right mix of geographical convenience, existing infrastructure, and room to grow. Moreover, Kentucky was prepared to expedite the project. In hindsight, it was difficult to compete with the more than 7,500 acres of property and 4 runways CVG already owned.
Once the Prime Air hub is operational, CVG’s cargo handle is expected to balloon. Last year, the airport handled 818,000 tonnes of cargo – most of it flown for DHL across about fifty daily flights operated on behalf of the German express company by various carriers. In mid-January, eighteen aircraft were operating in the Prime Air Fleet, the majority of which were in service with ATSG affiliate airlines, ABX Air and ATI, which operate twelve 767-200Fs and four 767-300BDSFs. At the time, Atlas Air Worldwide Holdings subsidiaries had at least two 767-300BDSFs in service for Prime Air.
ATSG has four more 767-300s either in or awaiting conversion at Bedek’s Tel Aviv facility and destined for Amazon service. All four will have been redelivered by the end of this year, fulfilling ATSG’s commitment to provide a total of twenty 767 freighters for the e-commerce giant. For its part, Atlas currently has three 767-300s in conversion for Amazon (one by Bedek and one by Boeing), but says it has locked up feedstock and conversion slots for the sixteen remaining in its commitment. Last week, Atlas Air Worldwide Holdings purchased a 767-300 (27205, ex-Thomas Cook) from lessor Altavair, and said it would have it converted to freighter configuration by Bedek Aviation Group [FATs 003740 – 3741].
Those interested in learning more about the impact of e-commerce on air freight and the express industry should join us at Cargo Facts Asia in Shanghai, 25 – 26 April. Chief Commercial Officers from both Atlas Air Worldwide and ATSG speak on separate panels dedicated to Asia Pacific Trends and E-commerce and air freight. To register, or for more information, visit CargoFactsAsia.com.