Amazon acquired the option to buy a 15% stake in the parent company of Hawaiian Airlines on Friday as the e-retail giant seeks to gain more control over its own supply chain.
The deal allows Amazon to bolster its own fleet of planes by leasing 10 Hawaiian Airlines Airbus passenger jets that will be converted to cargo jets. The new fleet is expected to begin transporting Amazon packages beginning in fall 2023.
The planes will be “the newest, largest aircraft for Amazon, allowing us to deliver more customer packages with each flight,” said Amazon’s Global Air Fleet & Sourcing Director, Philippe Karam, in a statement.
Amazon’s boosted shipping capacity will help it put pressure on competitors like UPS and FedEx.
The Hawaiian Airlines deal is not the first time Amazon has made a move to gain more control of its global shipping supply chain. In 2016, the company founded Amazon Air, a cargo airline that exclusively ships Amazon packages, in order to avoid third-party carriers and expedite shipping from the Amazon warehouse to people’s front doors.
Amazon Air is enduring its slowest growth since the start of the pandemic, though, so the company is hoping the new fleet of 10 long-haul air carriers can help boost efficiency.
The deal helped Hawaiian Airlines stock soar to its highest intraday climb in two years before closing at $15.25.
To support the new Amazon operation, Hawaiian Airlines will begin a wave of hires for pilots and mechanics in the mainland US.
“This relationship provides a catalyst to grow our business and the unique opportunity to diversify our revenue sources while capitalizing on our established strengths,” said Hawaiian Chief Executive Officer Peter Ingram in a statement.