Alaska Airlines dissatisfied with Amazon cargo contract, executive says
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Alaska Airlines wants to renegotiate the cargo flying contract with Amazon it inherited after acquiring Hawaiian Airlines 16 months ago because the venture isn’t very economical, a top executive strongly suggested last month.
Industry experts familiar with both companies say Alaska Airlines’ dissatisfaction with the Amazon (NASDAQ: AMZN) business likely stems from difficulties aligning passenger and cargo pilot schedules for better efficiency, and contract terms with razor-thin profit margins.
Hawaiian Airlines began supporting Amazon’s air logistics network in October 2023 and currently operates 10 Airbus A330-300 converted freighter aircraft on behalf of the retail giant. Under the contract, Amazon supplies the leased widebody aircraft and Hawaiian provides crews and maintenance. Alaska Air Group acquired Hawaiian in September 2024.
“We’re excited about the cargo side of the business, but there is optimization that has to happen. [The dedicated charter arrangement] with Amazon is a tough business. It’s only 10 aircraft. It’s a whole different operation than the passenger side of the business. And we’ve got to make that work long-term,” Alaska Air Group’s Chief Financial Officer Shane Tackett said during a session at the Goldman Sachs Industrial and Materials Conference on Dec. 4.
“So there are parts of the business that are going to require focus to optimize. It’s now clear where we have to go and sort of fix pieces that were a little bit broken when we closed the transaction,” he added, without providing specifics.
Alaska Air declined to provide an additional comment. Media representatives from Amazon did not respond to queries. Amazon and Alaska Air are both based in Seattle.
(READ MORE - freightwaves.com)
Alaska Airlines dissatisfied with Amazon cargo contract, executive says
Alaska Airlines wants to renegotiate the cargo flying contract with Amazon it inherited after acquiring Hawaiian Airlines 16 months ago because the venture isn’t very economical, a top executive strongly suggested last month.
Industry experts familiar with both companies say Alaska Airlines’ dissatisfaction with the Amazon (NASDAQ: AMZN) business likely stems from difficulties aligning passenger and cargo pilot schedules for better efficiency, and contract terms with razor-thin profit margins.
Hawaiian Airlines began supporting Amazon’s air logistics network in October 2023 and currently operates 10 Airbus A330-300 converted freighter aircraft on behalf of the retail giant. Under the contract, Amazon supplies the leased widebody aircraft and Hawaiian provides crews and maintenance. Alaska Air Group acquired Hawaiian in September 2024.
“We’re excited about the cargo side of the business, but there is optimization that has to happen. [The dedicated charter arrangement] with Amazon is a tough business. It’s only 10 aircraft. It’s a whole different operation than the passenger side of the business. And we’ve got to make that work long-term,” Alaska Air Group’s Chief Financial Officer Shane Tackett said during a session at the Goldman Sachs Industrial and Materials Conference on Dec. 4.
(READ MORE - freightwaves.com)