Amazon cuts cargo flights to slim down as demand weakens

Amazon may scale back flights this year , U.S. air transport services company Air Transport Services said on Monday, citing a continued decline in demand and slowing macroeconomic growth.

The aviation services company said Amazon may not renew its leases on five Boeing 767-200 freighters that are set to expire between May and September.

In afternoon trading , shares of American Airlines plunged, falling 9%. Amazon shares fell about 1%. Representatives of the two companies did not immediately respond to requests for comment.

It is understood that the shipping company is responsible for a large part of Amazon's air cargo volume . The company said that in the future it will mainly arrange Boeing 767 cargo planes to provide services exclusively for Amazon and DHL, but the number of flights and the flight time of each aircraft will be greatly reduced .

“ Both Amazon and DHL are actively adjusting their U.S. ground and air delivery networks to accommodate slower U.S. economic growth and lower consumer spending levels in the first half of 2023 , ” said American Air Transport Services .

Air freight rates have fallen sharply recently after soaring in recent years due to port congestion and high demand for fast shipping .

On January 30, the Baltic Air Freight Index fell more than 33% from a year earlier. The International Air Transport Association said last month that air cargo demand fell nearly 14% in November from a year earlier, and capacity fell 1.9%.

But after Amazon's weakest year of growth in its 25-year history as a public company , CEO Andy Jassy decided to take some steps to cut costs, including laying off more than 18,000 employees, suspending warehouse expansion and shutting down some projects.

Amazon frantically expanded its delivery and logistics network during the pandemic as e-commerce demand surged, but rising inflation and slowing consumer spending forced it to start scaling back.

Bloomberg reported in December that Amazon has been considering selling excess space on its cargo planes to other airlines.

In addition to Amazon and DHL , express delivery giant FedEx also announced a series of cost-cutting measures, including reducing cargo flights and cutting some jobs within the company .

In the cold winter, giants have chosen to move forward lightly. For sellers, it is not recommended to adopt overly aggressive operating strategies when the economic situation is still unclear.

Amazon

E-commerce

flight