Amazon vertically integrates into the sky.
Amazon is shipping enough packages across the U.S. that it is starting to need its own planes. Now we know what they look like.
At a media event Thursday, Aug. 4, in Seattle, Amazon took the wraps off its first “Prime Air” branded plane, a Boeing 767 owned by Atlas Air that has been converted into a freighter. Amazon announced deals with two aircraft leasing companies — Atlas, and another called Air Transport Services Group, or ATSG — earlier this year to fly as many as 40 dedicated cargo planes over the next two years. Eleven are already in operation; this is the first one that’s been painted.
The idea is to provide Amazon enough shipping capacity for peak periods and flexibility for normal operations as its Prime business grows, Amazon’s Senior Vice President of Operations Dave Clark told Recode in an interview.
(In the second quarter, Amazon’s North America sales grew 28 percent year over year to almost $18 billion. Amazon’s tens of millions of Prime members are its best customers and receive free two-day shipping on many items as part of their $99 annual membership.)
“You can almost think about the difference between commercial flight and private flight,” Clark said. “We have the ability, with our own planes, to create connections between one point and another point that are exactly tailored to our needs, and exactly tailored to the timing of when we want to put packages on those routes — versus other peoples’ networks which are optimized to run their entire network. We add capacity, we add flexibility, and it gives us cost-control capability as well.”
As one example, Clark said the flights will be helpful for east coast-west coast runs for certain specialized inventory and imports. Amazon can use the planes for both shipments to customers and to move goods between its facilities.
The move comes as Amazon further vertically integrates its business.
In addition to leasing dedicated cargo planes, it has grown its number of fulfillment and sorting centers to more than 145 worldwide, is building out its own local delivery service in some markets, has invested in numerous logistics technologies and is buying or leasing truck trailers and cargo ships.
It has also built out its own cloud-computing and web-hosting platform that is now a $10 billion-a-year business, designed its own electronic devices, runs a delightful voice-based assistant that could be the future of shopping, built a surprisingly successful TV-streaming service and is selling its own private-label goods that range from HDMI cables to “Happy Belly” coffee beans.
So, why not control some airplanes?
The aircraft’s paint job, previewed to a handful of journalists and partners at a Boeing hangar in Seattle, is mostly white, with “Prime Air” on both sides, a blue bottom that leads up the fuselage into a stripe, and a dark gray tail with Amazon’s “smile” logo on it. (And, fun fact: Its tail number, N1997A, features a prime number — get it? — and is the year Amazon went public.)
There is also an Amazon logo stenciled onto the bottom — to remind people watching from below which company they order paper towels and Kindles from.
Source : http://www.recode.net/