Two former airline employees recall items flying from Seattle to central Cincinnati, then back west to Portland, a two-and-a-half hour drive from its northern neighbor. While Amazon says it uses planes for items that are too far away to drive, former employees say the company often uses planes for widely available items, such as toothbrushes. and iPhone chargers.
“At UPS, they say ‘Don’t love planes,’” said one former airline employee. “At Amazon Air, they seem to have fallen into that trap.”
Connors writes that the company is constantly optimizing to make the network as sustainable and efficient as possible. “This includes aircraft load factors, which are dependent on weight, mass, routing, staff, facilities, and complex combinations of other network planning factors. Ground transportation will be prioritized to meet our customer promise.” When asked about Amazon’s use of planes for regular items as part of a series of additional fact-checking questions, Connors stopped short of answering and said the company “has nothing to add.”
One way to offset the cost of unfilled planes is to sell excess capacity to other companies. “The general model at Amazon is that you create a big internal customer for whatever service you’re building, and then you make that service available to the rest of the world. That’s the model for Amazon Web Services,” said a former Amazon Air employee, referring to the cloud computing division that powers Amazon’s logistics. “It makes sense, if you’re going to build this massive internal transport network, go back and make it available to a third party.”
But beyond the deal to ship packages for the US Postal Service, which began in 2017, former employees say selling spare air capacity proved more difficult than selling cloud space. When employees questioned that potential, management would say, “Let’s focus on getting our house in order,” recalls one former employee.
When asked about plans to sell Amazon Air’s services to others, Rhoads declined. “The capacity we are planning right now is for Amazon customer shipments. Could that change over time? I never said never, to Amazon.”
Recently, the company has begun to face a reckoning with its “get up fast” mentality. Plunging stock prices, slowing revenue growth and economic uncertainty ushered in a period of austerity when new CEO Andy Jassy took over from Bezos this past summer. (Bezos is currently executive chairman.) Jassy admit that the company was over-building to meet the needs of the pandemic, and that he closed, canceled or delayed plans to open more than 80 facilities in the US, according to MWPVL International, a supply chain consultant that tracks Amazon networks. June saw the resignation of Dave Clark, the chief executive who oversaw the construction of Amazon’s logistics giant, followed by Dave Bozeman, the boss of Rhoads, who oversaw Amazon’s Transportation Services. In November, The New York Times report that the company planned to lay off 10,000 employees, the largest cut in the company’s history.
While Amazon Air continues to add flights, its growth rate has slowed from 30% in 2021 to about 5% in the first half of 2022, according to data from Cargo Facts Consulting. The consulting firm also found that Amazon’s shipping and fulfillment costs have outstripped revenue growth over the past five years. However, investment in air continues. In October, Amazon announced a partnership with Hawaiian Airlines, which will operate Airbus A330s, an aircraft not yet used by Amazon, on behalf of the retailer.
Meanwhile, the company remains entertained with one of the earliest unrealized paths. Many former employees say Amazon has held meetings for years about the possibility of acquiring one of its airlines and launching its own — preferably with non-union pilots. .
Amazon Air was born out of the company’s desire to free itself from the constraints of its shipping partners, master its destiny, and better serve its customers. By sheer strength and perhaps part luck, the retailer hasn’t faced another Christmas crisis since 2013. And despite the headwinds, it continues to quality. filled with giant 767s with their signature boxes every day. Amazon is even working on the next, slightly smaller area: Corporate speak it will start making drone deliveries in two towns later this year.
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