Amazon.com intends to acquire a minority stake in Air Transport Services Group, one of its cargo transport partners, exercising previously-obtained warrants that allow it to buy 13,562,897 shares in the carrier at a price per share of USD9.73, or a total sum of USD131,966,988, ATSG revealed in a stock exchange filing on March 8.
Separately, Amazon.com also announced an intention to buy 865,548 shares in ATSG “on a cashless basis of a warrant” dated September 8, 2020, the filing said.
The online retail giant has held warrants in ATSG since 2016, many of them granted as part of a deal to lease twenty B767 freighters from the carrier, which was one of its earliest agreements with a cargo airline to bolster its own fleet. Amazon.com also owns warrants to buy a minority stake in rival group Atlas Air Worldwide Holdings.
The move is subject to and contingent on the approval of the United States Department of Transportation (DOT). On that approval, Amazon.com will own about 19.5% of ATSG, Quint Turner, the carrier’s chief financial officer, told Bloomberg. A shareholding that size would give it the right to appoint one member of ATSG’s board of directors. If Amazon opts to lease more of its aircraft and exercise all of its warrants, it could end up owning as much as 39.9% of the cargo carrier.
Amazon.com depends on both ATSG and Atlas Air to carry a significant number of its packages, but it has also started to expand its own air cargo operations. It is building a USD1.5 billion “air hub” at Cincinnati International, due to open later in 2021, which will be able to handle about 200 flights per day. In early January 2021, it acquired seven B767-300s from Delta Air Lines and four from WestJet to convert into freighters.
