Good Bye Amazon
06-08-2024, 05:42 PM
#71
In a land of unicorns
Joined APC: Apr 2014
Position: Whale FO
Posts: 6,633
Rapid turnover? Pennies and headaches?
Amazon went full bore on this project in 2016 (maybe late 2015). That's a solid eight years using the services of three airlines (and really only two companies, Atlas and ATSG) to fly their widebodies. Atlas is the first to exit that business. (Technically, I suppose ABX got exited first, but only because leases expired. But now we're back, baby!) For the last few years, Amazon has been using Atlas and Sun Country to fly its 737s, and Sun Country is looking to do more to keep their pilots busy while their passenger business is slack. I'm not seeing a lot of rapid turnover there, and clearly, somebody thinks it's business worth having. ATSG is a company that doesn't spend a penny without the promise of a return on that money, and here we are more than two years before our amendable date with a CBA that has been extended through the length of the new CMI agreement with Amazon. The additional business must be worth the expenditure.
Apparently, your new overlords at Atlas have decided that the Amazon business is not sufficiently profitable for them to keep it. I can imagine any number of other airlines for which that would also be true. We can be sure that Amazon is not paying top dollar to anyone, and I'm sure that includes Hawaiian. I think it's also possible that given the current state of the industry, where hiring and retaining pilots in the ACMI segment is a difficult prospect, your overlords have also determined that long-haul in the larger airframes is where the money is at, and so it's better to focus your limited pilot resources on the segment of the business that has larger margins. That is, after all, what Kalitta did not long ago when they exited the medium widebody business.
Maybe if ATSG was in the long-haul business, they would not think that the Amazon business is worth it. But as it happens, medium widebodies are the bulk of ATSG's business, and so they are structured in such a way that they are able to make enough money to be worth the effort. The fact that Atlas management doesn't consider the business to be profitable enough should not be taken as an indication that no other company can be profitable with it.
Amazon went full bore on this project in 2016 (maybe late 2015). That's a solid eight years using the services of three airlines (and really only two companies, Atlas and ATSG) to fly their widebodies. Atlas is the first to exit that business. (Technically, I suppose ABX got exited first, but only because leases expired. But now we're back, baby!) For the last few years, Amazon has been using Atlas and Sun Country to fly its 737s, and Sun Country is looking to do more to keep their pilots busy while their passenger business is slack. I'm not seeing a lot of rapid turnover there, and clearly, somebody thinks it's business worth having. ATSG is a company that doesn't spend a penny without the promise of a return on that money, and here we are more than two years before our amendable date with a CBA that has been extended through the length of the new CMI agreement with Amazon. The additional business must be worth the expenditure.
Apparently, your new overlords at Atlas have decided that the Amazon business is not sufficiently profitable for them to keep it. I can imagine any number of other airlines for which that would also be true. We can be sure that Amazon is not paying top dollar to anyone, and I'm sure that includes Hawaiian. I think it's also possible that given the current state of the industry, where hiring and retaining pilots in the ACMI segment is a difficult prospect, your overlords have also determined that long-haul in the larger airframes is where the money is at, and so it's better to focus your limited pilot resources on the segment of the business that has larger margins. That is, after all, what Kalitta did not long ago when they exited the medium widebody business.
Maybe if ATSG was in the long-haul business, they would not think that the Amazon business is worth it. But as it happens, medium widebodies are the bulk of ATSG's business, and so they are structured in such a way that they are able to make enough money to be worth the effort. The fact that Atlas management doesn't consider the business to be profitable enough should not be taken as an indication that no other company can be profitable with it.
I bet you guys negotiated a more sensible deal. 30 pilots per 767 that fly 10 hours a day ain't gonna make anyone any money. Oh, and with 2 hot spares ready to go at any given time.
The 737 was even worse, if I did my quick math right, we had 215 pilots for 7 airplanes.
06-09-2024, 02:35 AM
#72
Gets Weekends Off
Joined APC: Jul 2017
Posts: 1,409
Ultimately, without access to the financials, we're all just repeating what we see in the press releases or, worse, repeating some rumor we heard. Our company is returning to an international, long-haul model. That's what we know. It looks like significant displacements and downgrades have been put off at least until August, but there will be some degree of change coming.
I'd caution against reading too deeply into details of rumors, actions of other airlines regarding one customer or another, etc. Instead look at industry-wide trends, macro factors, etc.
I'd caution against reading too deeply into details of rumors, actions of other airlines regarding one customer or another, etc. Instead look at industry-wide trends, macro factors, etc.
06-09-2024, 08:54 AM
#73
Gets Weekends Off
Joined APC: Sep 2014
Posts: 737
Now that all of the juice has been squeezed out through stock price appreciations and bonuses earned, the executives aren't as interested anymore. Plus, the American consumer has spent their last stimulus dollars and finally maxed out their credit cards.
Originally Posted by Reactivity
(Technically, I suppose ABX got exited first, but only because leases expired.
https://www.vox.com/2016/12/2/138149...abx-air-strike
And, in point of fact, so too did Atlas once suffer the wrath of an angry Amazon as they transferred two Atlas planes to ATI.
https://www.aircargonews.net/airline...sg-from-atlas/
What's the point I'm trying to make? Yes, Atlas will have some adjusting to do in the short term, but in the longer term, I think giving Amazon the boot is good for long term stability. DHL and Amazon by now, are both notorious for their classic whipsawing of assets from one organization to the next.
Adios!
06-09-2024, 10:15 AM
#74
Gets Weekends Off
Joined APC: Jun 2006
Position: Left, right & center
Posts: 861
The six tails that ABX was flying for Amazon were yanked with the intention that ABX would do no more Amazon flying whatsoever. Whatever the reason, somebody relented and ABX resumed the Amazon flying. We never got any more (until now), but we continued flying those six until the leases expired and as far as we knew at the time, we were out of the Amazon business.
And, in point of fact, so too did Atlas once suffer the wrath of an angry Amazon as they transferred two Atlas planes to ATI.
The original assertion was that there was "rapid turnover" among the Amazon contractors. I figured the temporary strike-related cessation of Amazon flying and the transfer of two tails between contractors once in eight years didn't really count as turnover that was partiularly rapid. Mainline passenger carriers change out their regional carriers on a much larger scale and more frequently than that.
DHL and Amazon by now, are both notorious for their classic whipsawing of assets from one organization to the next.[size=33px]
If Atlas was losing money on the Amazon flying then yes, by all means, they should stop doing it and focus on their more profitable business. Domestic express delivery is what built ABX Air, going all the way back to Airborne Express. We're happy to have the business. This move likely benefits both of us.
06-09-2024, 01:37 PM
#75
Gets Weekends Off
Joined APC: Sep 2014
Posts: 737
And I'm curious if those two are included in the option for 10 more that was part of the announcement that kicked this whole thing off.
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I don't remember when DHL moved the old TWA -200s around, whether that was in the same time frame as Amazon moving the -300s to ATI.
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If Atlas was losing money on the Amazon flying then yes, by all means, they should stop doing it and focus on their more profitable business.
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I don't remember when DHL moved the old TWA -200s around, whether that was in the same time frame as Amazon moving the -300s to ATI.
------------------
If Atlas was losing money on the Amazon flying then yes, by all means, they should stop doing it and focus on their more profitable business.
Those TWA -200s were previously operated by ABX until they got shifted over to Atlas in the early 2010s--so before Amazon came on the scene. We've since lost them to Amerijet (???) I believe? I finally lost track.
I'm not sure it's accurate to say Atlas was losing money on Amazon. They are simply a very difficult customer who don't pay very well and I believe the Apollo managers realize there are much juicier contracts out there to be had.
Amen and Adios!
06-09-2024, 02:36 PM
#76
Gets Weekends Off
Joined APC: Jun 2006
Position: Left, right & center
Posts: 861
They were owned by ABX in the Airborne Express days and sold to DHL as part of the divorce settlement. Two of them are at ABX now as DHL dedicated spares, and at least one is at 21Air. The rest went to Amerijet and have since been parked in the desert over the course of the last year or so as Amerijet exited DHL flying.
06-10-2024, 09:04 AM
#77
Gets Weekends Off
Joined APC: Sep 2014
Posts: 737
They were owned by ABX in the Airborne Express days and sold to DHL as part of the divorce settlement. Two of them are at ABX now as DHL dedicated spares, and at least one is at 21Air. The rest went to Amerijet and have since been parked in the desert over the course of the last year or so as Amerijet exited DHL flying.
RIP.
Those things were tired and worn out 10 years ago.
06-10-2024, 10:09 AM
#78
Gets Weekends Off
Joined APC: Jun 2008
Posts: 216
If you recall, the original contract with Atlas was for 20 767 aircraft. The 2 that were moved to ATI (Atlas never received them if memory is correct) were in response to performance and contractual/labor issues. You might say it was the preverbal 'shot across the bow'. Subsequently Atlas lost a aircraft (IAH), which then left their agreement at 17, the position they have sat in until today-ish. ABX now has the daunting task of putting those first 10 on with the possibility of the remaining 7 and 3 from an un-named source. ABX must focus on the immediate task at hand of the first committed 10and hope that we don't screw it up too badly.
All in all, the move by Atlas is probably in their best interest. Oddly, if you search around there are competing article(s) stating that AMZ dropped Atlas, and the more accepted view that Atlas dropped AMZ. Go figure.
All in all, the move by Atlas is probably in their best interest. Oddly, if you search around there are competing article(s) stating that AMZ dropped Atlas, and the more accepted view that Atlas dropped AMZ. Go figure.
06-10-2024, 08:32 PM
#79
Gets Weekends Off
Joined APC: Jun 2017
Position: 777 Left window seat
Posts: 685
If you recall, the original contract with Atlas was for 20 767 aircraft. The 2 that were moved to ATI (Atlas never received them if memory is correct) were in response to performance and contractual/labor issues. You might say it was the preverbal 'shot across the bow'. Subsequently Atlas lost a aircraft (IAH), which then left their agreement at 17, the position they have sat in until today-ish. ABX now has the daunting task of putting those first 10 on with the possibility of the remaining 7 and 3 from an un-named source. ABX must focus on the immediate task at hand of the first committed 10and hope that we don't screw it up too badly.
All in all, the move by Atlas is probably in their best interest. Oddly, if you search around there are competing article(s) stating that AMZ dropped Atlas, and the more accepted view that Atlas dropped AMZ. Go figure.
All in all, the move by Atlas is probably in their best interest. Oddly, if you search around there are competing article(s) stating that AMZ dropped Atlas, and the more accepted view that Atlas dropped AMZ. Go figure.
06-11-2024, 06:35 AM
#80
Gets Weekends Off
Joined APC: Apr 2015
Posts: 2,579
Rapid turnover? Pennies and headaches?
Amazon went full bore on this project in 2016 (maybe late 2015). That's a solid eight years using the services of three airlines (and really only two companies, Atlas and ATSG) to fly their widebodies. Atlas is the first to exit that business. (Technically, I suppose ABX got exited first, but only because leases expired. But now we're back, baby!) For the last few years, Amazon has been using Atlas and Sun Country to fly its 737s, and Sun Country is looking to do more to keep their pilots busy while their passenger business is slack. I'm not seeing a lot of rapid turnover there, and clearly, somebody thinks it's business worth having. ATSG is a company that doesn't spend a penny without the promise of a return on that money, and here we are more than two years before our amendable date with a CBA that has been extended through the length of the new CMI agreement with Amazon. The additional business must be worth the expenditure.
Apparently, your new overlords at Atlas have decided that the Amazon business is not sufficiently profitable for them to keep it. I can imagine any number of other airlines for which that would also be true. We can be sure that Amazon is not paying top dollar to anyone, and I'm sure that includes Hawaiian. I think it's also possible that given the current state of the industry, where hiring and retaining pilots in the ACMI segment is a difficult prospect, your overlords have also determined that long-haul in the larger airframes is where the money is at, and so it's better to focus your limited pilot resources on the segment of the business that has larger margins. That is, after all, what Kalitta did not long ago when they exited the medium widebody business.
Maybe if ATSG was in the long-haul business, they would not think that the Amazon business is worth it. But as it happens, medium widebodies are the bulk of ATSG's business, and so they are structured in such a way that they are able to make enough money to be worth the effort. The fact that Atlas management doesn't consider the business to be profitable enough should not be taken as an indication that no other company can be profitable with it.
Amazon went full bore on this project in 2016 (maybe late 2015). That's a solid eight years using the services of three airlines (and really only two companies, Atlas and ATSG) to fly their widebodies. Atlas is the first to exit that business. (Technically, I suppose ABX got exited first, but only because leases expired. But now we're back, baby!) For the last few years, Amazon has been using Atlas and Sun Country to fly its 737s, and Sun Country is looking to do more to keep their pilots busy while their passenger business is slack. I'm not seeing a lot of rapid turnover there, and clearly, somebody thinks it's business worth having. ATSG is a company that doesn't spend a penny without the promise of a return on that money, and here we are more than two years before our amendable date with a CBA that has been extended through the length of the new CMI agreement with Amazon. The additional business must be worth the expenditure.
Apparently, your new overlords at Atlas have decided that the Amazon business is not sufficiently profitable for them to keep it. I can imagine any number of other airlines for which that would also be true. We can be sure that Amazon is not paying top dollar to anyone, and I'm sure that includes Hawaiian. I think it's also possible that given the current state of the industry, where hiring and retaining pilots in the ACMI segment is a difficult prospect, your overlords have also determined that long-haul in the larger airframes is where the money is at, and so it's better to focus your limited pilot resources on the segment of the business that has larger margins. That is, after all, what Kalitta did not long ago when they exited the medium widebody business.
Maybe if ATSG was in the long-haul business, they would not think that the Amazon business is worth it. But as it happens, medium widebodies are the bulk of ATSG's business, and so they are structured in such a way that they are able to make enough money to be worth the effort. The fact that Atlas management doesn't consider the business to be profitable enough should not be taken as an indication that no other company can be profitable with it.
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