WASHINGTON — The introduction of Airbus A330 freighters in Amazon’s air logistics operation opens the door for Hawaiian Airlines to capture more business from the retail giant if it proves a reliable partner under a brand new arrangement to fly parcels that starts next month, the corporate’s chief executive said.
Hawaiian Airlines (NASDAQ: HA) received its first A330-300 freighter in July and is able to begin flights for Amazon Air in October while air and maintenance crews finish familiarizing themselves with the aircraft and airport ground procedures for cargo. The Honolulu-based carrier will eventually operate 10 package freighters on Amazon’s behalf under a 10-year contract struck last fall.
Amazon (NASDAQ: AMZN) appears to have identified the A330, a midsize widebody aircraft, as the subsequent platform for its air logistics activity. Older Boeing 767s it primarily deploys are starting to achieve the top of their service life and passenger planes available to convert to a cargo configuration will soon be scarce.
Hawaiian CEO Peter Ingram told FreightWaves that presents a chance for the airline to grow its Amazon business, noting that Hawaiian faced an identical decision 13 years ago when it began taking A330-200s for its passenger fleet after having flown 767s as much as that time.
“I feel in case you take a look at the Amazon fleet, you possibly can speculate that they’re fascinated by the A330-300 of their fleet as a mix of growth and likewise substitute of the 767s that they’ve been operating with various carriers throughout their network. We see the chance for growth. It’s going to be as much as us to operate efficiently and well,” Ingram said in an interview last week on the sidelines of the U.S. Chamber of Commerce’s Global Aerospace Summit here.
“We’re very on-time focused in our passenger business and I do know Amazon could be very on- time focused of their business. So one of the simplest ways we are able to put ourselves able for growth in the long run is by operating well, with a high completion factor and with great on-time performance. That’s something our team has been aware of on the passenger side and we intend to do the identical on the freighter side,” Ingram said.
Amazon has informed Hawaiian Airlines what routes the primary two planes will fly, but Ingram declined to reveal them.
A search of flight activity on Flightradar24 shows the primary A330 freighter conducting short practice flights at San Bernardino Airport in California, where Amazon has its West Coast regional air hub, in the primary week of September. On Tuesday, the plane arrived at Cincinnati/Northern Kentucky International Airport (CVG), where Amazon’s national superhub is positioned and where Hawaiian Airlines has established its pilot base.
A trunk route between CVG and a key secondary hub like San Bernardino is a logical alternative for a big cargo jet just like the A330.
Hawaiian will operate the A330 cargo jets in Amazon’s air network across the U.S. mainland, helping to expedite delivery of online orders, but could be open to discussing the opportunity of flying trans-Pacific or other international routes to deliver imported goods if Amazon had such a necessity, Ingram said.
Latest kid on the block
Amazon has two incumbent air partners that operate 767s on its behalf. Air Transport Services Group (NASDAQ: ATSG), which leases cargo aircraft and likewise flies them for purchasers that need that service, operates 47 Boeing 767s for Amazon. Atlas Air has 18 767s within the Amazon system.
Amazon this 12 months returned to ATSG five 767-200s which can be older and had reached the top of their lease term. The Amazon fleet outsourced to ATSG mostly consists of larger 767-300s. Amazon officials have said the ten Airbus A330s being placed with Hawaiian are to switch 767-200s, not for growth.
Ingram said Amazon approached Hawaiian to bid for the transport service contract after it decided to take a position within the A330 fleet due to the airline’s experience operating the A330 for passengers.
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ATSG Chief Executive Wealthy Corrado said Hawaiian from the start had the within track for the job.
Amazon “tends to pick out carriers that have already got the aircraft on certificate. It takes an airline about 10 months to a 12 months to place an aircraft on certificate [with the Federal Aviation Administration] and it also costs quite a lot of money, somewhere between $6 million and $8 million, to do this style of work. In order that puts us at an obstacle in bidding where we didn’t have it [the A330] on certificate,” Corrado said on the corporate’s third-quarter 2022 earnings call with analysts.
Mike Berger, ATSG’s chief strategy officer and then-chief industrial officer, didn’t rule out ATSG becoming an A330 operator in the long run. The corporate two years ago made a strategic decision to diversify its leasing program by investing in used A330 passenger jets and paying to have them overhauled to hold large pallets. It has secured the appropriate to convert 29 of the medium widebodies with Airbus affiliate Elbe Flugzeugwerke (EFW). It already has 20 commitments from international customers. The primary one is scheduled to reach on the production facility in October.
“We see Amazon historically search for multiple providers of aircraft as they develop their network so we stand able to support Amazon as our largest customer and shareholder in the long run. The Amazon decision really does validate … that the 330 is the subsequent aircraft that we would like to get ourselves into” as 767 feedstock becomes harder to search out, Berger said.
Amazon is leasing the Airbus jets from Seattle-based Altavair, which can be sending the post-passenger planes to EFW for ruggedizing the cabin interior and installing a big cargo door. Ingram said Hawaiian will receive the second A330 in December and that it’s going to enter service early next 12 months. The airline may have nine freighters by the top of 2024, with the tenth one following in early 2025. The initial converted freighter is lower than 5 years old and never entered service with original customer Hong Kong Airlines.
The Amazon deal, which incorporates an option for the retailer to eventually acquire a minority stake, represents the primary time Hawaiian Airlines has ever operated dedicated cargo jets. It’s in the ultimate stage of implementing an in depth project plan for launching what is actually a startup airline inside an airline.
Preparation includes hiring about 160 pilots for the freighter operations, training them and establishing work rules that differ from those for A330 passenger aircraft. Pilots will even be based on the mainland, as a substitute of Hawaii. Ingram said the airline will probably perform line maintenance in several locations based on the flight schedule Amazon determines.
In April, Hawaiian accomplished the transition of A330 maintenance from Delta TechOps to its own personnel. It operates 24 A330-200 passenger jets. Executives said that self-managing maintenance will allow it to exercise greater control over day-to-day operations and get monetary savings, especially because the A330 freighters are introduced into the fleet and lower per-unit costs.
Meanwhile, Hawaiian Airlines expects to receive its first Boeing 787 passenger jets early next 12 months, a few of which can replace early model A330s. Ingram said the planes, that are barely larger than the A330, will provide extra space for cargo.
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