Amazon had recently announced plans of expanding its delivery business. The partner it announced on Tuesday, however, came out to be an unexpected one. Amazon has opted for the low-cost airline, Sun Country Airlines, this time for expanding its air logistic. By 2020’s second quarter, the Minneapolis-based small leisure carrier will convert 10 of its Boeing 737 – 800 jets to add them to Amazon Air.
Amazon Has So Far Relied On Cargo Airlines Including ATSG And Atlas Air
Amazon air currently relies on cargo airlines including ATSG and Atlas Air for efficient delivery of its packages. With minority stakes in these cargo airlines, Amazon aims at expanding its own delivery business that covers water, land, and air operations.
Sun Country is a subsidiary of Apollo Global Management, a private equity firm located in New York City. According to Jude Bricker, the CEO of Sun Country, the airline plans on using the partnership with Amazon to balance the seasonality of commercial flights that is known to peak in Q1 as vacationers are more likely to travel south.
He further added that the seasonal fluctuations are among the major challenges that the airline currently faces. The CEO pointed out that the fourth quarter marks the period in which Amazon’s demand is at its peak followed by a peak in the airline’s demand.
As per the sources, the deal has been finalized in the past week. According to Bricker, his first attempt was to sell one of the company’s used planes to Amazon earlier this year. The deal, however, could not be stricken. Towards the end of the year, the tech giant approached Sun Country Airlines with a proposal for a cargo deal.
Sun Country Airlines To Add 150 New Pilots To Its Crew
The CEO also commented that before signing the deal with Amazon, cargo flying has never been on agenda for Sun Country Airlines. The sources also informed that the airline plans on adding 150 pilots to its crew in the upcoming 18 months. Expanding the crew to a total of 500 will help the airline cater to Amazon’s requirements for its air delivery business.
Following the news, Amazon’s stock was seen trading a little under 1% higher in extended trading on Tuesday. Share prices were reported at $1,790 during after-hours trading. Apollo Global Management, the equity firm that owns Sun Country Airlines, printed a record high of $46.76 in extended trading on Tuesday.
The second half of 2019 has weighed on Amazon in the stock market that dropped sharply from a year-to-date high of $2,017 in July to the current $1,790 level.