Amazon To Launch Dedicated Cargo Fleet In India To Improve Logistics
According to people familiar with the plan, Amazon plans to launch its own air cargo fleet in India as part of its effort to expand and gain more control over logistics operations in one of the world's largest and fastest growing markets.
Amazon's signature Prime Air will exclusively transport packages for the company, and the aircraft fuselage will bear the familiar light blue'smile' logo. QuikJet, a Bengaluru-based cargo airline founded by Cyrus Guzder of supply chain company AFL and Ireland-based ASL Aviation Group, is expected to launch the fleet by the end of this month.
While the fleet will initially consist of two Boeing 737-800 freighters capable of carrying up to 23.9 tonnes of cargo, Amazon plans to have six such aircraft by the end of this year, according to the people.
Amazon is launching its dedicated air cargo operation in India for the first time outside of the United States and Europe, which will aid in the creation of its own overnight delivery network. Prime Air, based in Seattle, launched in the United States in 2016 and operates from airports near its warehouses.
The fleet consists of 91 aircraft worldwide, including small Boeing 737s, midsize 767s, and ATRs. These are all leased and operated by third parties. Amazon's air cargo operations in Europe are managed by the ASL group.
QuikJet was founded in 2007 by IL&FS, Tata Capital, and IDFC, but it was forced to cease operations in 2013 due to high oil prices. Guzder and ASL collaborated last year to bring it back to life.
“Having Amazon as a dedicated customer will make the QuikJet model successful this time as it will completely eliminate its dependence on freight forwarders and have certainty on revenue,” a person aware of the planning said.
According to a report by brokerage firm Bernstein, Amazon has a large base of 'Prime' customers in India, one of the company's largest markets outside the United States. Prime members can get same-day or next-day deliveries from Amazon.
According to people briefed on the plan, the company believes logistics expansion is critical as it seeks to speed up deliveries and make the process more cost effective.
“While Amazon has been using the belly space of airlines like IndiGo, SpiceJet, it felt that it needed more control over its air cargo network because the number of Prime customers has been growing significantly in India,” the person cited earlier said. “A dedicated cargo airline gives the company control to move its objects from its warehouse to nearby smaller cities overnight.”
India will also serve as a hub for other Southeast Asian countries, he added.
According to sources, Amazon Transportation, the US ecommerce giant's local shipping services arm that houses the logistics business, is planning to open its logistics infrastructure operations in India for non-Amazon orders to various online businesses.
Indian airlines are increasing cargo capacity, with the dedicated freighter fleet growing from five aircraft prior to Covid to 28 aircraft now. IndiGo, SpiceJet, Air India Express, and Bluedart are also looking to add more cargo aircraft.