wjcandee

I will stick my toe in here very-gingerly.


First, as to the Amazon-owned aircraft. It does appear that at least tentative plans have been made for 2 of the Amazon ex-Westjet aircraft to go somewhere other than ABX. The other two haven't been announced in terms of operator.


One interesting data point: despite Amazon having announced that the 7 ex-DL aircraft it recently bought are for 2022, one of them (N1612T) flew from VCV to MEX last night, presumably not for a vacation. Figure 5-6 months for conversion, and she's out by late June or July. In general, Amazon plans for stable growth but then often accelerates its plans, and that may be happening with the DL aircraft.


Second, as to ABX hiring and training, and what it means. I thought it was telling when Corrado expressly said at an investor conference last year that ABX was a very good airline that they were hoping to grow if they could work out the labor situation. The contract came within a few months after that. He's a salesman, and he plainly had something in his head about an opportunity for business. But I wouldn't conflate hiring and training at ABX with some need to provide service to Amazon. DHL might very well be the anticipated growth source, or something else. ABX has been doing a fine job on the DHL international routes. With the absence of international belly space now projected to last for a while, and the new contract, there's no reason to believe that DHL wouldn't be looking to ABX for additional service, particularly if ATSG could provide some metal. That said -- and particularly if Amazon wants to put even more planes in the air this year -- there's no structural reason for Amazon not to consider ABX as a provider.


Third, as to the 767-200s. The December 2018 agreement with Amazon extends the leases on all 12 until 2023, with an option of another 3-year extension, which would push it to 2026. Given the Amazon usage level of about 700 cycles per year, all but two should be able to fly to 2026 and many years beyond then. The two that are questionable are both at ABX, but easily could be replaced with other CAM 767-200s. N795AX will make 2 years no sweat, but will have to tap out before 2026 (47561 cycles as of Aug 2020). The other one is N768AX, which should just make it to 2026, but won't fly beyond that (45237 cycles as of May 2020). [The LOV is 50K cycles.] Unless Amazon's growth slows suddenly, I can't see them taking 12 aircraft out of service in 2023, so I would expect most of those options to be exercised. Add the fact that ATI is planning to repaint most of their 762s (and probably all of them, ultimately), I would bet on repaints for both fleets and continued 762 usage. They're a good interim fit where the 737-800 isn't big enough and the 767-300 is too much airplane.

All this musing and $5 will get you a beverage at Starbucks, of course, but I offer it for what it is.