Amazon to invest in Canadian freighter operator Cargojet

By Damian Brett

E-commerce giant Amazon will invest in a third freighter operator as it takes a stake in Canada’s Cargojet.

The two have been working together over recent years with Cargojet providing overnight air cargo services and charter flights.

Under the new strategic agreement, Cargojet will issue warrants to Amazon to purchase variable voting shares that will vest based on the achievement of commercial milestones related to the two companies’ business together.

The first tranche of warrants allows Amazon to acquire up to 9.9% of Cargojet’s variable voting shares at an exercise price of $91.78 per share.

The first tranche of warrants will vest over a period of six and a half years, with vesting tied to the delivery by Amazon of up to C$400m in business volumes during the same term.

Amazon will also receive additional warrants to acquire up to an additional 5% of Cargojet’s variable voting shares with vesting tied to the delivery by Amazon of up to an additional C$200m.

Amazon has also invested in freighter operators ATSG and Atlas in the US.

-Amazon to lease 15 more freighters from GECAS as it ramps up delivery operation

-ATSG confirms Amazon freighter network deal

-Amazon to lease a further 20 freighters from Atlas

Amazon utilises Cargojet’s overnight air network and charter aircraft services to move packages from Amazon facilities to other Amazon or last mile carrier locations before final delivery to customers.

“The commercial relationship the Cargojet team continues to build with Amazon has now allowed us to further strengthen and align our long-term strategic commercial interests. Our continuous commitment to provide value added services enables us to earn all of our customers’ trust as the leading overnight air-network operator,” said Carojet chief executive Ajay Virmani.

“Cargojet has been a key player in our Canadian middle mile operations for several years,” added Adam Baker, vice president global transportation, Amazon. “We’re thrilled to build a longer-term relationship that will allow us to provide even faster service to Amazon customers in Canada.”

Cargojet said it plans to strengthen its domestic network on the back of growth in e-commerce and a drive towards faster deliveries as well as 7 days-a-week deliveries.

Cargojet plans, over time, wants to add more non-stop flights allowing later departures and earlier arrivals to the 15 major cities that Cargojet already serves and to add new cities on its overnight network.

These service and frequency enhancements will be available to all Cargojet customers, and will expand Cargojet’s reach to approximately 95% of the Canadian population.

“This optimised network will further improve fleet utilisation, create additional opportunities, and continue to help Cargojet enhance its customer-neutral, cost effective network for all its customers,” the aircraft operator said.



Share this story

Related Topics

Latest amazon air news

Air Cargo News’ Top 10 most read in 2019

By Rachelle Harry

With 2020 already underway, the Air Cargo News team decided that now is an ideal moment to share our most…

Read More

Share this story

Atlas 767 crash: Go-around mode activated after mystery ‘click’

By David Kaminski-Morrow - Flight Global

Investigators probing the fatal Atlas Air Boeing 767-300 freighter crash near Houston have been trying to ascertain whether a sound…

Read More

Share this story

Sun Country Airlines scoops 10 aircraft deal with Amazon

By Damian Brett

E-commerce giant Amazon has hired Sun Country Airlines to deliver its packages in Amazon Air-branded aircraft – a huge expansion for…

Read More

Share this story