Amazon launches dedicated shipping fleet in India

Amazon will launch its own fleet of air freight in India, as part of the global e-commerce giant’s efforts to expand and gain more control over logistics operations in one of its largest and fastest-growing markets, people familiar with the plan said.

Amazon’s Prime Air will exclusively fly packages for the company and sport the familiar light blue “smile” logo on the fuselage. Likely to be launched by the end of this month, the fleet will be operated by QuikJet, a Bengaluru-based cargo airline that is a joint venture between Cyrus Guzder of supply chain company AFL and Ireland-based ASL Aviation Group.

While the fleet will initially include two Boeing 737-800 freighters, which can carry up to 23.9 tons of cargo, Amazon plans to have six such planes by the end of this year, the people said.

Amazon did not, at press time Friday, respond to an email seeking comment. QuikJet could not be reached for comment.

India is the first market outside the US and Europe where Amazon is launching a dedicated air freight operation, which will help it create its own delivery network here as well. The Seattle-based company launched Prime Air in the US in 2016 and operates from airports near its depots.

Globally, the fleet consists of 91 aircraft, including the Boeing 737 small and medium 767 and ATR aircraft. All of these are leased and operated by third parties. In Europe, the ASL Group operates Amazon’s air freight operations.

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QuikJet was started in 2007 by IL&FS, Tata Capital and IDFC, but was forced to begin operations in 2013 amid soaring oil prices. Last year, Guzder and ASL joined forces to revive it. “Having Amazon as a dedicated customer will make QuikJet’s model successful this time around because it will completely eliminate its dependence on freight forwarders and certainty about revenue,” a person familiar with the planning said.

In India, one of Amazon’s largest markets outside the US, the company has a large “Prime” customer base, according to a report from brokerage firm Bernstein. Amazon offers same-day or next-day deliveries for Prime customers.

People briefed on the plan said the company feels expanding into logistics is critical as it seeks to speed up deliveries and make the process more cost-effective.

“While Amazon was using the belly space of airlines like IndiGo and SpiceJet, it felt it needed more control over its air cargo network because the number of Prime customers has grown exponentially in India,” said the previously mentioned person. “A dedicated cargo airline gives the company the control to get its stuff from its warehouse to nearby small towns overnight.”

He added that India will also act as a hub for other countries in Southeast Asia.

ET reported that the domestic shipping services arm of US e-commerce giant Amazon Transportation, which includes the logistics business, plans to open its logistics infrastructure operations in India for non-Amazon orders to various online businesses.

Indian Airlines is increasing cargo capacity, with the dedicated cargo fleet increasing from just five aircraft pre-Covid to 28 now. IndiGo, SpiceJet, Air India Express and Bluedart are also looking to introduce more aircraft to carry cargo.

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