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ILNFlyer
Topic Author
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Will Amazon eventually own ASTG?

Thu Jun 04, 2020 4:31 pm

With todays announcement, it makes one wonder.....they hold so many stock warrants on ATSG already, and with this new lease agreement they hold even more. Here is the press release:

Latest leasing commitments would bring the number of Boeing 767 aircraft that ATSG leases to Amazon to 31 by the end of 2020, and 42 aircraft by the end of 2021

WILMINGTON, Ohio--(BUSINESS WIRE)--Air Transport Services Group, Inc. (Nasdaq: ATSG), the leading provider of medium wide-body aircraft leasing, air transportation and related services, today announced an agreement to lease twelve additional Boeing 767-300 converted freighter aircraft to Amazon.com Services LLC. One of the twelve aircraft was delivered on May 29, 2020 and the remaining eleven will be delivered in 2021. All twelve will be leased to Amazon for ten years, with options for Amazon to extend the leases for three additional years.

Pursuant to the terms of the parties’ December 2018 deal, Amazon will be granted approximately seven million warrants to purchase ATSG common shares in exchange for its commitment to these twelve additional leases. The cash exercise price for these warrants will be $20.40 per share, based upon the volume-weighted average price of ATSG’s stock for the 30 trading days concluded prior to the contractual commitment for the leases.


https://www.atsginc.com/investors/news- ... ers-amazon
 
MIflyer12
Posts: 8068
Joined: Mon Feb 18, 2013 11:58 pm

Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 4:39 pm

Well, they will if they want to. Amazon has more money (stock value) than God.

You need to ask yourself why they'd want to own ASTG, however. Observe that Amazon uses a lot of contractors for ground deliveries. Can you say whipsaw? I don't see Amazon having a lot of patience for laborious negotiations with a pilots' union. 'Boom - you're replaced.'
 
flyby519
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Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 4:50 pm

It benefits Amazon if they own minority stakes in a bunch of carriers. Basically play the whipsaw game with their own providers. Same thing with their delivery scheme. Everyone loses, except Amazon.
 
DiamondFlyer
Posts: 3381
Joined: Wed Oct 29, 2008 11:50 pm

Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 4:54 pm

flyby519 wrote:
It benefits Amazon if they own minority stakes in a bunch of carriers. Basically play the whipsaw game with their own providers. Same thing with their delivery scheme. Everyone loses, except Amazon.


Until the FAA steps in and says that Amazon is exercising operaitonal control and forces them to have their own certificate.
From my cold, dead hands
 
flyby519
Posts: 1570
Joined: Tue Jul 24, 2007 3:31 am

Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 5:01 pm

DiamondFlyer wrote:
flyby519 wrote:
It benefits Amazon if they own minority stakes in a bunch of carriers. Basically play the whipsaw game with their own providers. Same thing with their delivery scheme. Everyone loses, except Amazon.


Until the FAA steps in and says that Amazon is exercising operaitonal control and forces them to have their own certificate.


No way, the first stop will be AA, UA, DL and their regional setup. Which would never happen.
 
DiamondFlyer
Posts: 3381
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Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 5:28 pm

flyby519 wrote:
DiamondFlyer wrote:
flyby519 wrote:
It benefits Amazon if they own minority stakes in a bunch of carriers. Basically play the whipsaw game with their own providers. Same thing with their delivery scheme. Everyone loses, except Amazon.


Until the FAA steps in and says that Amazon is exercising operaitonal control and forces them to have their own certificate.


No way, the first stop will be AA, UA, DL and their regional setup. Which would never happen.


Go look up how UPS was forced into having their own certificate. Hint, it's very similar to the path Amazon is headed in.
From my cold, dead hands
 
bhill
Posts: 1835
Joined: Thu Sep 13, 2001 8:28 am

Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 5:49 pm

Why on Earth would Amazon want to own an airline?? That is not there business model. They are just an efficient warehousing company. It is a hell of alot easier to get rid of excess capacity...if you do not own it...
Carpe Pices
 
enplaned
Posts: 112
Joined: Mon Aug 29, 2016 9:49 pm

Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 6:05 pm

ILNFlyer wrote:
With todays announcement, it makes one wonder.....they hold so many stock warrants on ATSG already, and with this new lease agreement they hold even more. Here is the press release:

[i]Latest leasing commitments would bring the number of Boeing 767 aircraft that ATSG leases to Amazon to 31 by the end of 2020, and 42 aircraft by the end of 2021

WILMINGTON, Ohio--(BUSINESS WIRE)--Air Transport Services Group, Inc. (Nasdaq: ATSG), the leading provider of medium wide-body aircraft leasing, air transportation and related services, today announced an agreement to lease twelve additional Boeing 767-300 converted freighter aircraft to Amazon.com Services LLC. One of the twelve aircraft was delivered on May 29, 2020 and the remaining eleven will be delivered in 2021. All twelve will be leased to Amazon for ten years, with options for Amazon to extend the leases for three additional years.

Pursuant to the terms of the parties’ December 2018 deal, ...


As it says, Amazon is still taking aircraft under the terms of the Dec 2018 agreement. Under that agreement, the total maximum implied ownership of ATSG from the warrants was 39.9%. My guesstimate is that the warrants associated with the latest 12 aircraft will take Amazon's maximum ownership of ATSG to 37-38%, assuming all the warrants are exercised.
 
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Polot
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Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 6:21 pm

flyby519 wrote:
DiamondFlyer wrote:
flyby519 wrote:
It benefits Amazon if they own minority stakes in a bunch of carriers. Basically play the whipsaw game with their own providers. Same thing with their delivery scheme. Everyone loses, except Amazon.


Until the FAA steps in and says that Amazon is exercising operaitonal control and forces them to have their own certificate.


No way, the first stop will be AA, UA, DL and their regional setup. Which would never happen.

AA, UA, DL, and their regionals all have separate air certificates. Amazon does not have one- Amazon Air/Primeair is a virtual cargo airline.
 
flyby519
Posts: 1570
Joined: Tue Jul 24, 2007 3:31 am

Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 6:49 pm

Polot wrote:
flyby519 wrote:
DiamondFlyer wrote:

Until the FAA steps in and says that Amazon is exercising operaitonal control and forces them to have their own certificate.


No way, the first stop will be AA, UA, DL and their regional setup. Which would never happen.

AA, UA, DL, and their regionals all have separate air certificates. Amazon does not have one- Amazon Air/Primeair is a virtual cargo airline.


Ok, so Amazon gets a certificate of their own with 1 Cessna Caravan on it and they can continue the charade.
 
DiamondFlyer
Posts: 3381
Joined: Wed Oct 29, 2008 11:50 pm

Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 6:50 pm

flyby519 wrote:
Polot wrote:
flyby519 wrote:

No way, the first stop will be AA, UA, DL and their regional setup. Which would never happen.

AA, UA, DL, and their regionals all have separate air certificates. Amazon does not have one- Amazon Air/Primeair is a virtual cargo airline.


Ok, so Amazon gets a certificate of their own with 1 Cessna Caravan on it and they can continue the charade.


That would be hillarious. I'd love to see Amazon get a 121 certificate with a C208...
From my cold, dead hands
 
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Polot
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Re: Will Amazon eventually own ASTG?

Thu Jun 04, 2020 7:05 pm

flyby519 wrote:
Polot wrote:
flyby519 wrote:

No way, the first stop will be AA, UA, DL and their regional setup. Which would never happen.

AA, UA, DL, and their regionals all have separate air certificates. Amazon does not have one- Amazon Air/Primeair is a virtual cargo airline.


Ok, so Amazon gets a certificate of their own with 1 Cessna Caravan on it and they can continue the charade.

Getting and maintaining a certificate is not cheap or easy-hence why Amazon is trying to avoid it as much as possible.
 
OB1504
Posts: 3962
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Re: Will Amazon eventually own ASTG?

Fri Jun 05, 2020 12:44 pm

Polot wrote:
flyby519 wrote:
Polot wrote:
AA, UA, DL, and their regionals all have separate air certificates. Amazon does not have one- Amazon Air/Primeair is a virtual cargo airline.


Ok, so Amazon gets a certificate of their own with 1 Cessna Caravan on it and they can continue the charade.

Getting and maintaining a certificate is not cheap or easy-hence why Amazon is trying to avoid it as much as possible.


Could they buy one from a failing airline?
 
wjcandee
Posts: 8980
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Re: Will Amazon eventually own ASTG?

Fri Jun 05, 2020 12:53 pm

Forcing Amazon to get a certificate is a Teamsters wet dream. It's not going to happen, the UPS story is not what they say it is, and DHL would have to go first.
 
wjcandee
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Re: Will Amazon eventually own ASTG?

Fri Jun 05, 2020 1:27 pm

Also, with respect to the beneficial ownership of shares reported because that's what the SEC requires, I believe that the option agreements have been amended so that the exercise price of the warrants is adjusted so that Amazon never has "beneficial ownership" of more than 4.9 percent of ATSG, Atlas, etc. Something like that; it's in the more-recent reports.

My understanding is that Amazon has never exercised any of the options at any of the carriers. Every time a required SEC report is filed, some media outlet trumpets that Amazon has exercised warrants or that it "owns" X shares of these airlines, only to have it explained to them, again.
 
jjbiv
Posts: 1247
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Re: Will Amazon eventually own ASTG?

Fri Jun 05, 2020 8:58 pm

Does anyone have a link or a source regarding the FAA forcing UPS to become a certificated air carrier? I keep hearing this mentioned but have never seen a reliable printed source describing how this occurred.
 
strfyr51
Posts: 4989
Joined: Tue Apr 10, 2012 5:04 pm

Re: Will Amazon eventually own ASTG?

Sat Jun 06, 2020 12:40 am

DiamondFlyer wrote:
flyby519 wrote:
It benefits Amazon if they own minority stakes in a bunch of carriers. Basically play the whipsaw game with their own providers. Same thing with their delivery scheme. Everyone loses, except Amazon.


Until the FAA steps in and says that Amazon is exercising operaitonal control and forces them to have their own certificate.

this is right out of the UPS playbook where they affiliated with a bunch of smaller freight carriers then strangled them into becoming UPS Air, (they didn't have to strangle too hard or too long though) even right now? The UPS pilots still bring their OWN lunches to work. and they have ONE pay structure. look at www.airlinepilotcentral.com under Cargo airlines, And? they're paid pretty damn good too! Amazon would do well to imitate their model,
 
strfyr51
Posts: 4989
Joined: Tue Apr 10, 2012 5:04 pm

Re: Will Amazon eventually own ASTG?

Sat Jun 06, 2020 4:18 am

flyby519 wrote:
DiamondFlyer wrote:
flyby519 wrote:
It benefits Amazon if they own minority stakes in a bunch of carriers. Basically play the whipsaw game with their own providers. Same thing with their delivery scheme. Everyone loses, except Amazon.
, and
Until the FAA steps in and says that Amazon is exercising operaitonal control and forces them to have their own certificate.


No way, the first stop will be AA, UA, DL and their regional setup. Which would never happen.


So? While they're playing whipsaw with the Pilots? What are they doing for the Maintenance of their fleet? Do they plan on playing whipsaw with that as well?
And what are the Majors doing with the regionals? They all fly on their OWN certificates have their OWN ops and do their OWN maintenance, They're flying under contracted flight numbers for United American and Delta under their OWN call signs. And it's been that way for close to 40 years now. Will the FAA make them change?
Hell I doubt it unless the DOT forces hem to. But? United American and Delta don't run their operations either. They have their OWN Delays and Cancellations. and they Bid on the routes the run, . The only way for Amazon to run afoul of the FAA? Is to demand they do something Illegal. and even Amazon knows better than that.
I worked night freight for Purolator Courier years ago. It was to as a ballet when it worked well and a Kluge when it didn't. My company had an airplane in Teterboro NJ MSP, LAX, SFO and OMA. We converged on Columbus OH in front of the Lane Aviation Hangars .. And every night there were 15 different Airlines on the ground at CMH with all kinds of airplans. My company flew DC9-15F's, HFB-320 Hansa Jets, and Aerospatiale SN-601 Corvettes. we had bases all over the country. Emory then was at Dayton, Airborne was at Wilmington, OH, Federal Express was at MEM (Flying Falcon 20's no less) Airborne was Flying SUD Caravelle-12's there were CV-580's and CV-640's and even YS-11's on the ramps. in the morning upon arrival at SFO, MSP TET When someone had an ? You had No Idea what might come rolling up. when someone had a problem? We all might be out working on it if anyone needed Help. I did my first 727 Engine change on an Emory 727. UPS had contract crews flying DC8-54's DC8-61. 62, and 63F's I got to United in 1984 and we later sold our DC8-71's to UPS on 2 for 1 swaps for B757-222's and Our DC10-10's to FEDEX, Working Night Freight was a blast. It prepared me to work Line maintenance for United and I worked 33 years of line Maintenance because that's where the action was.
 
CoThG
Posts: 21
Joined: Sun Feb 24, 2019 3:24 pm

Re: Will Amazon eventually own ASTG?

Sat Jun 06, 2020 1:50 pm

strfyr51 wrote:
DiamondFlyer wrote:
flyby519 wrote:
It benefits Amazon if they own minority stakes in a bunch of carriers. Basically play the whipsaw game with their own providers. Same thing with their delivery scheme. Everyone loses, except Amazon.


Until the FAA steps in and says that Amazon is exercising operaitonal control and forces them to have their own certificate.

this is right out of the UPS playbook where they affiliated with a bunch of smaller freight carriers then strangled them into becoming UPS Air, (they didn't have to strangle too hard or too long though) even right now? The UPS pilots still bring their OWN lunches to work. and they have ONE pay structure. look at http://www.airlinepilotcentral.com under Cargo airlines, And? they're paid pretty damn good too! Amazon would do well to imitate their model,


Only if they choose to. They have catering on flights as needed.
 
CoThG
Posts: 21
Joined: Sun Feb 24, 2019 3:24 pm

Re: Will Amazon eventually own ASTG?

Sat Jun 06, 2020 2:01 pm

strfyr51 wrote:
DiamondFlyer wrote:
flyby519 wrote:
It benefits Amazon if they own minority stakes in a bunch of carriers. Basically play the whipsaw game with their own providers. Same thing with their delivery scheme. Everyone loses, except Amazon.


Until the FAA steps in and says that Amazon is exercising operaitonal control and forces them to have their own certificate.

this is right out of the UPS playbook where they affiliated with a bunch of smaller freight carriers then strangled them into becoming UPS Air, (they didn't have to strangle too hard or too long though) even right now? The UPS pilots still bring their OWN lunches to work. and they have ONE pay structure. look at http://www.airlinepilotcentral.com under Cargo airlines, And? they're paid pretty damn good too! Amazon would do well to imitate their model,


And they just got a contract extension with a 7% raise and improved pension!
 
tphuang
Posts: 5212
Joined: Tue Mar 14, 2017 2:04 pm

Re: Will Amazon eventually own ASTG?

Sat Jun 06, 2020 2:11 pm

Amazon likes to outsource this kind of stuff to keep labor cost down and not be liable to problems. They won’t need to buy.
 
wjcandee
Posts: 8980
Joined: Mon Jun 05, 2000 12:50 am

Re: Will Amazon eventually own ASTG?

Sat Jun 06, 2020 6:08 pm

jjbiv wrote:
Does anyone have a link or a source regarding the FAA forcing UPS to become a certificated air carrier? I keep hearing this mentioned but have never seen a reliable printed source describing how this occurred.


That's because it never happened. It's a myth propagated by, and dream of, certain unions. The situation actually evolved somewhat differently.
 
raylee67
Posts: 890
Joined: Mon Oct 24, 2011 11:06 pm

Re: Will Amazon eventually own ASTG?

Sat Jun 06, 2020 6:45 pm

Would Amazon Air eventually expand internationally? Amazon has its own version in Europe, Japan and Canada, etc. and each are quite successful. But Amazon at each location seems to be operating locally and does not really work with each other now. Having Amazon Air fly between international hubs will lower the cost of delivery across different Amazon international sites.
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