In a press announcement Wednesday morning, Air Transport Services Group Inc. (NASDAQ: ATSG) said it has agreed to operate a U.S. air cargo network for Amazon.com Inc. (NASDAQ: AMZN). The possibility that Amazon was testing its own delivery service was reported last December.
According to Air Transport Services, it will lease 20 Boeing 767 freighters to Amazon’s fulfillment arm on what is known as a “wet lease.” Air Transport Services will provide crews and all other services for Amazon. The length of the leases vary from five to seven years and the agreement between the two companies has a five-year term.
Amazon also has been granted warrants to acquire up to 19.9% of Air Transport Services stock for a period of five years at an exercise price of $9.73 per share, a discount of about 17% to the stock’s Tuesday closing price of $11.77.
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