Jeff Bezos Has An Airline Called Amazon Air – And It Just Bought 15% Of Hawaiian Airlines

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key takeaways

  • Amazon has agreed to buy up to 15% of Hawaiian Airlines in exchange for operating 10 Airbus A330-300’s.
  • It is the latest addition to Amazon Air, which now has 97 aircraft and flies to 64 different destinations.
  • Amazon Air has several similar arrangements with other airlines, although it plans to purchase its own aircraft in the near future.
  • It is the latest in a long list of Amazon acquisitions or major stakes, which includes Whole Foods, Twitch and One Medical.
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Late last week it was announced that Amazon would take a 15% stake in Hawaiian Airlines. In return they will crew and operate ten Airbus jumbo jets for Amazon, which will allow them to expand their distribution network.

It’s Amazon Air, the latest extension to Amazon’s own personal cargo airline that makes sure you and I get wool slippers and cheap USB cables to our front doors in record time.

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You may not have heard of Amazon Air, which flies under the callsign Prime Air, but it’s been around seven years now. As of 2015, Amazon Air has had a fleet of 97 cargo planes, all of which are leased from other airlines.

The deal with Hawaiian Airlines is one of these arrangements and allows Amazon to add ten more planes to its haul.

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how amazon air works

As you’d expect, Amazon has a lot of air cargo to ship. They ship an estimated 1.6 million packages every day, and that’s a lot of miles that need to be covered.

After trial runs in late 2015, Amazon Air (then known as Amazon Prime Air) took a 19.9% ​​stake in the Air Transport Service Group, which would provide them with access to 20 Airbus 767s.

Since then, like almost every project of Jeff Bezos and his team, it has expanded dramatically. Amazon Air now partnered with Silver Airways, Atlas
ATCO
Air, Sun Country Airlines, ASL Airlines Ireland, Air Transport International, ABX Air, CargoJet Airways and now, Hawaiian Airlines.

With a total of 97 aircraft at its disposal, Amazon Air now flies to 63 destinations in the US and Europe.

There are some possible plans for Amazon Air to buy its own aircraft, but for now their fleet is owned and operated by their partner airlines. This arrangement employs and manages pilots and related crew through their airline partners. This allows Amazon to focus on what they do best, without fully committing to the volatile airline business.

Amazon Air was originally called Amazon Prime Air when it first launched the service in 2015. With the advent of their new drone delivery service, also known as Amazon Prime Air, the cargo plane business dropped ‘Prime’ from the name.

Hawaiian Airlines deal explained

Like many businesses in the travel and leisure sector, Hawaiian Airlines is struggling to bounce back from the depths of the pandemic. Offering cargo services to blue chip clients like Amazon was likely to be an easy decision.

Markets responded positively to the announcement, with Hawaiian Airlines stock up 10% shortly after the announcement.

amazon investment Includes 9.4 million warrants to buy Hawaiian Airlines stock and if fully exercised would represent a $110 million investment in the company. Aircraft to be operated by Hawaiian Airlines for Amazon will be leased through aviation leasing specialist Altawire, with Hawaiian providing staff and support to keep them in the air.

Notable Acquisitions of Amazon

This deal is by no means Amazon’s first major stake or acquisition. They have taken over dozens of other companies over the past 25 years, with the pace seeming to be accelerating in recent years.

Some of his most important deals include:

whole Foods

Upscale grocery chain Whole Foods is Amazon’s largest acquisition to date, valued at $13.7 billion in 2017. It became Amazon’s actual first foray into bricks-and-mortar retail, though a key part of the strategy has been bringing Whole Foods products into grocery delivery. Service Amazon Fresh.

Metro Goldwyn Mayer

As one of the oldest Hollywood film studios, MGM made more immediate sense as an addition to Amazon Prime Video. The company was bought in 2021 for $8.45 billion and saw Jeff Bezos take control of some of the big name franchises like James Bond, The Handmaid’s Tale, Rocky, Vikings and Stargate.

Twitch

Live streaming service Twitch was bought back in 2014 for $970 million. While the service offers streaming in a wide range of different genres, it is best known as a hub for live streaming of esports and video games.

The acquisition allowed Amazon to be a big ticket to a niche they saw had a big future, gaming. It is a condition that has been paid.

One Medical And Pillpack

The acquisition of primary care provider One Medical happened this summer and saw Amazon take control of a $3.9 billion price tag. The purchase represents another push into healthcare after it bought PillPack in 2018 for $750 million.

It works with Amazon Care, Amazon’s telehealth service, and signals a clear intention from Amazon to become a bigger player in the healthcare space.

i robot

Out of all the names on this list, and dozens more on the full list of Amazon’s past acquisitions, you’d think that robot vacuum cleaner purchases would be less in point of controversy.

However, in a world that is becoming more and more concerned about privacy, the $1.7 billion acquisition of iRobot has raised many concerns. The main issue centers around the fact that the iRobot Roomba vacuum cleaner generates a schematic of the user’s home. Some people don’t like the idea of ​​Jeff Bezos having floor plans for millions of homes.

The tech sector still matters to investors

This latest announcement shows that Amazon and the wider tech sector is going nowhere. Despite plummeting stock prices, Silicon Valley’s finest is still generating massive revenue with big growth plans.

In some ways it’s surprising to see how much the stocks of some of these companies have fallen. For example, take Amazon. The share price is down about 30% this year. This is despite continued growth, increased revenue and major acquisitions.

In our view, this presents an opportunity for investors. Forward expectations for the tech and communications sectors are more favorable than those of more traditional companies that are found Dow Jones, Still, those companies in the Dow have outperformed.

This means that the technology has not been evaluated as potential in comparison.

Keeping this in mind, we have created tech rally kit, This technique takes a long position while simultaneously taking a short position in the Dow. This means that investors can benefit from relative changes between the technology and the Dow. Regardless of whether the overall market trend is sideways or down, investors can win if the technology improves.

This type of pair trading is usually only for sophisticated hedge fund clients, but we have made it available to everyone.

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Credit: www.forbes.com /

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