WILMINGTON – Wilmington-based Air Transport Services Group, Inc. announced this morning agreements with Amazon Fulfillment Services, Inc., an affiliate of Amazon.com, Inc., to operate an air cargo network to serve Amazon customers in the United States.
The announcement ends months of speculation about such a deal at the Wilmington Air Park, which is owned by the Clinton County Port Authority.
The number of additional local jobs during the five-year agreement is unclear at this point.
“We expect that the aircraft assets and other resources we are providing in support of this Amazon network will continue to benefit the local and regional economy here in Ohio,” Hete told the News Journal in a written statement. “The actual impacts on employment and regional investment will depend on Amazon’s plans.”
“Since last summer, we have been working closely with Amazon to demonstrate that a dedicated, fully customized air cargo network can be a strong supplement to existing transportation and distribution resources,” said Joe Hete, President and CEO of ATSG. “We are excited to serve Amazon customers by providing additional air cargo capacity and logistics support to ensure great shipping speeds for customers.”
The commercial agreements will include: the leasing of 20 Boeing 767 freighter aircraft to Amazon Fulfillment Services Inc. by ATSG’s Cargo Aircraft Management (CAM); the operation of the aircraft by ATSG’s airlines, ABX Air and Air Transport International; and gateway and logistics services provided by ATSG’s LGSTX Services, according to a press release. The duration of the 20 leases will be five to seven years; the agreement covering operation of the aircraft will be for five years.
ATSG spokesperson Paul Cunningham said the trial network which began last summer employed 35 local people, and he said additional openings will be posted to the career pages for ATSG and its subsidiaries.
“We offer Earth’s largest selection, great prices and ultra-fast delivery promises to a growing group of Prime members and we’re excited to supplement our existing delivery network with a great new provider, ATSG, by adding 20 planes to ensure air cargo capacity to support one and two-day delivery for customers,” said Dave Clark, Amazon senior vice president of worldwide operations and customer service, in the release.
In conjunction with the commercial agreements, ATSG also has agreed to grant Amazon warrants to acquire, over a five-year period, up to 19.9 percent of ATSG’s common shares at $9.73 per share, based on the closing price of ATSG common shares on February 9, 2016.
Additional information about these agreements will be provided in a Form 8-K that ATSG expects to file with the U.S. Securities & Exchange Commission later this week.
ATSG provides aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements.
The subsidiary companies under ATSG include ABX Air, Airborne Global Solutions, Air Transport International, Cargo Aircraft Management, Airborne Maintenance and Engineering Services and LGSTX Services.
To visit ATSG’s website, go to www.atsginc.com, where it and its subsidiaries’ career pages can be accessed.
Reach Nathan Kraatz at 937-382-2574, ext. 2510 or on Twitter @NathanKraatz.