Amazon dials back air cargo service as demand cools, contractor says

one of Amazonmajor air freight operators in said on monday The e-commerce giant has reportedly cut flights this year, citing declining demand and slowing economic growth.

air transport service groupsaid it operates a significant portion of Amazon’s air freight and expects to do so. Boeing A dedicated 767 Freighter servicing Amazon and DHL has reduced schedules and reduced flight hours per aircraft.

“The two companies are adjusting their domestic ground and air distribution and fulfillment networks to accommodate economic growth and lower levels of consumer spending in the United States in the first half of 2023,” ATSG said.

Airfreight rates, which have risen sharply in recent years, have fallen due to port congestion and high demand for expedited deliveries. The Baltic Air Cargo Index fell more than 33% year-on-year on 30 January.International Air Transport Association Said Last month, November air cargo demand fell nearly 14% year-on-year, with capacity down 1.9%.

Passenger airlines meanwhile say travel demand is holding up for consumers Prioritize travel and other experiences.

but coming out of amazon weakest year of growth After a quarter century as a public company, CEO Andy Jassy has taken steps to cut costs.For that cutting More than 18,000 jobs, warehouse expansion suspended, some projects closed.

Amazon has built its fulfillment and logistics network at breakneck pace during the Covid pandemic, which has boosted demand for e-commerce. Since then, rising inflation and slowing consumer spending have forced Amazon to shrink. The company is considering selling excess space on its cargo planes to other airlines. bloomberg Reported last December.

ATSG said on Monday that Amazon may not extend leases for five Boeing 767-200 freighters that expire between May and September. Amazon added that he has elected to continue leasing four of his 767-200s through 2024.

ATSG shares fell 9% in afternoon trading. Amazon stock fell about 1%. A representative for ATSG did not respond to a request for comment.

After the article was published, an Amazon spokesperson issued an emailed statement saying the company was “falsely claiming it is reducing flights due to overall lower demand and slower economic growth.” said.

“As part of our annual planning, we are regularly shortening our flight schedules during this time to allow for normal post-holiday fluctuations and aircraft maintenance,” a spokesperson said.

Amazon in October hired Hawaiian Airlines said it would rent large Airbus cargo jets and retire some older aircraft.

Through Amazon Air, the company has built its fastest-growing air network and controls more aspects of the delivery process to ensure faster deliveries.that invested ATSG and Atlas Air Worldwide HoldingsHowever, Atlas last year agreed to be taken private by a group of investors.contract with Amazon passenger Airlines country of the sun We provide the crew and planes to fly the packages. Electronic retailers typically lease cargo planes from airlines, also bought used jets from delta and WestJet.

In addition to Amazon and DHL shortening air freight schedules, delivery giants fedex It also announced cost reductions, including parking aircraft, cut jobs for some companies.

clock: How the pandemic changed the way Boeing and airlines think about air cargo