Amazon will have two additional cargo jets at its disposal in the United States this summer to move packages within its e-commerce logistics network and carry general cargo for non-Amazon sellers.
Sun Country Airlines expects to begin operating two Boeing 737-800 converted freighters on Amazon’s (NASDAQ: AMZN) behalf by the end of June, the company said in its first-quarter earnings report on Friday.
Shareholders from both companies are expected to vote Friday on Allegiant’s $1.5 billion to buy Minneapolis-based Sun Country. The U.S. Department of Transportation signed off on the deal last month and executives say it could close as soon as May 13.
Sun Country operates 20 Boeing 737-800 passenger-to-freighter aircraft under a transportation services agreement with Amazon, which supplies the leased aircraft. At the time of the merger agreement in January, the ultra-low cost leisure carriers announced that Amazon had committed to place two additional cargo jets with Sun Country this year, bringing the narrowbody freighter fleet to 22 aircraft.
Following the transaction’s close, Sun Country will continue to operate separately until Allegiant is able to obtain a single operating certificate from the Federal Aviation Administration, which could take 18 or more, an Allegiant spokesperson said. In the meantime, the freighter aircraft will remain on Sun Country’s operating certificate.
The newest freighters were previously operated in Europe by ASL Airlines Ireland before Amazon reclaimed them, according to Planespotters.net.
The earnings report provided the first timeline for the planes’ entry into service.
Sun Country said it received the two planes in March and that they are expected to begin supporting Amazon’s logistics network by the end of June.
It can take several weeks or months to integrate aircraft on an airline’s operating certificate. Airlines have to review the maintenance history, thoroughly inspect the engines, systems and airframe, and update operational manuals to align the planes with the new operator’s maintenance program and specifications before receiving the approval of aviation regulators.
Last year, Amazon transferred eight freighters under its control from Atlas Air to Sun Country.
Sun Country reported cargo revenue of $46.1 million during the first quarter, up from $28.2 million in the prior year. The eight new freighters were the primary reason for the large increase.
Amazon has warrants for the right to purchase about 10 million Sun Country shares. When the merger with Allegiant is consummated any warrants that haven’t vested will automatically become fully vested. Amazon will receive Sun Country stock and then be compensated for its shares in Allegiant stock and cash.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Write to Eric Kulisch at ekulisch@freightwaves.com.
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