June 19, 2024
Hawaiian Airlines sees benefits in switch to Amazon’s Airbus freighter aircraft


Amazon’s newly acquired Airbus A330 freighter is shown for the final time at Incheon Airport in Seoul, South Korea, on July 1 after completing conversion work in China. The plane took off for Hawaiian Airlines’ main base in Honolulu the next day. (Photo: Shutterstock/parkdolly)

WASHINGTON — The introduction of Airbus A330 freighter planes into Amazon’s air logistics operation opens the door for Hawaiian Airlines to win more business from the retail giant if it proves to be a reliable partner under a new parcel flight arrangement that begins next month. , said the company’s chief executive. ,

Hawaiian Airlines (NASDAQ: HA) received its first A330-300 freighter aircraft in July and is set to begin flights for Amazon Air in October, while airlift and maintenance crews service the aircraft for cargo and airport ground processes. Have become acquainted. The Honolulu-based carrier would eventually operate 10 package freighters on behalf of Amazon under a 10-year contract signed last autumn.

Amazon (NASDAQ: AMZN ) appears to have identified the A330, a midsize widebody aircraft, as the next platform for its air logistics activity. The older Boeing 767s primarily deployed are beginning to reach the end of their service life and passenger aircraft available to convert to cargo configuration will soon become scarce.

Hawaiian CEO Peter Ingram told FreightWaves that this presents an opportunity for the airline to grow its Amazon business, noting that Hawaiian faced a similar decision 13 years ago when it grounded the 767 up to that point. After filling it started taking A330-200 for its passenger fleet.

“I think if you look at the Amazon fleet, you can guess that they are thinking about the A330-300 in their fleet as a combination of growth as well as a replacement for the 767 , which they are operating with various carriers throughout their network. We see opportunity for growth. “It’s up to us to do the job efficiently and well,” Ingram said in an interview on the sidelines of the U.S. Chamber of Commerce’s Global Aerospace Summit here last week.

“We focus very much on timing in our passenger business and I know Amazon focuses very much on timing in its business. So the best way we can position ourselves for future growth is to have good operations with a high completion factor and great on-time performance. This is something our team is familiar with on the passenger side and we intend to do the same on the freighter side, Ingram said.

Amazon has informed Hawaiian Airlines which routes the first two planes will fly, but Ingram declined to disclose them.

A search of flight activity on Flightradar24 shows the first A330 freighter is conducting short practice flights in the first week of September at San Bernardino Airport in California, where Amazon has its West Coast regional air hub. On Tuesday, the plane arrived at Cincinnati/Northern Kentucky International Airport (CVG), where Amazon’s national superhub is located and where Hawaiian Airlines has established its pilot base.

A trunk route between CVG and a major secondary hub like San Bernardino is a logical choice for a large cargo jet like the A330.

Hawaiian will operate A330 cargo jets into Amazon’s Hawaii network around the U.S. mainland, helping to speed up delivery of online orders, but also to deliver imported goods trans-Pacific or elsewhere if Amazon has the time to do so. Would be open to discussing the possibility of flying on international routes. There is a need, Ingram said.

new kid on the block

Amazon has two existing airline partners that operate the 767 on its behalf. Air Transport Services Group (NASDAQ: ATSG), which leases cargo planes and flies them to customers who need that service, operates 47 Boeing 767s for Amazon. Atlas Air has 18 767s in its Amazon system.

Amazon returned five 767-200s to ATSG this year that are older and had reached the end of their lease term. The Amazon fleet outsourced to ATSG consists mostly of the larger 767-300s. Amazon officials have said the 10 Airbus A330s being placed with Hawaiian are to replace the 767-200, not for growth.

Ingram said Amazon approached Hawaiian to bid for the transportation services contract after deciding to invest in the A330 fleet because of the airline’s experience operating the A330 for passengers.

Hawaiian Airlines CEO Peter Ingram speaks about the future of commercial aviation on a panel at the U.S. Chamber of Commerce's Global Aerospace Summit on Sept. 12, 2023.  (Photo: US Chamber)

Hawaiian Airlines CEO Peter Ingram speaks about the future of commercial aviation on a panel at the U.S. Chamber of Commerce’s Global Aerospace Summit on Sept. 12, 2023. (Photo: US Chamber)

ATSG Chief Executive Rich Corrado said Hawaiian had insider knowledge of the work from the beginning.

Amazon “selects carriers that already have aircraft on certificate. It takes about 10 months to a year for an airline to place an aircraft on certificate [with the Federal Aviation Administration] And it also costs a lot of money to do that kind of work, somewhere between $6 million and $8 million. So that puts us at a disadvantage in bidding where we didn’t have it [the A330] on the certificate,” Corrado said on the company’s third quarter 2022 earnings call with analysts.

ATSG’s chief strategy officer and then chief commercial officer, Mike Berger, did not rule out ATSG becoming an A330 operator in the future. The company made a strategic decision two years ago to diversify its lease program by investing in used A330 passenger jets and paying for overhauling them to carry larger pallets. It has secured the rights to convert 29 medium widebodies with Airbus affiliate Elbe Flugzeugwerke (EFW). It already has 20 commitments from international customers. The first is scheduled to arrive at the production facility in October.

“We see Amazon historically looking to multiple providers of aircraft as they grow their network so we look forward to supporting Amazon as our largest customer and shareholder in the future. Amazon’s decision really confirms … that the 330 is the next aircraft we want to involve ourselves in” as 767 feedstock becomes more difficult to find, Berger said.

Amazon is leasing the Airbus jet from Seattle-based Altair, which is also sending the passenger-carrier plane to EFW to strengthen the cabin interior and install a larger cargo door. Ingram said Hawaiian will receive a second A330 in December and it will enter service early next year. The airline will have nine cargo ships by the end of 2024, with a 10th cargo ship due in early 2025. The initial converted freighter is less than 5 years old and has never entered service with original customer Hong Kong Airlines.

The Amazon deal, which includes an option for the retailer to eventually acquire a minority stake, marks the first time Hawaiian Airlines has operated dedicated cargo jets. It is in the final stages of implementing a detailed project plan to essentially launch a startup airline within an airline.

Preparations include hiring about 160 pilots for cargo operations, training them and establishing work rules that differ from those on the A330 passenger aircraft. Pilots will also be based on the mainland rather than in Hawaii. Ingram said the airline will likely perform line maintenance at multiple locations depending on the flight schedule set by Amazon.

In April, Hawaiian completed the transition of A330 maintenance from Delta TechOps to its own personnel. It operates 24 A330-200 passenger jets. Executives said self-management maintenance will allow it to have greater control over day-to-day operations and save money, especially as A330 freighter aircraft have been introduced into the fleet and per unit costs have gone down.

Hawaiian Airlines, meanwhile, expects to receive its first Boeing 787 passenger jets early next year, some of which will replace the early model A330. Ingram said the planes, which are slightly larger than the A330, will offer more space for cargo.

Click here for more FreightWaves stories from Eric Kulish.

Contact reporter: [email protected]

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Source: finance.yahoo.com

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