Frankfurt, Germany — Analysis from a Germany-based banking group indicates that, it is only a matter of time before Amazon Air sets up shop in Europe.
The report by finance bank KFW IPEX-Bank, suggests that although the e-commerce giant has yet to go as far as launching its own airline as it has in the U.S., this will change as the company looks to drive down transportation costs in Europe by gaining more control over its air network.
Currently, Amazon’s air cargo is handled by DHL subsidiary European Air Transport.
“The frequency of flights by aircraft carrying Amazon parcels has increased considerably in recent months at the most important locations in Germany for this purpose, namely Cologne/Bonn and Leipzig/Halle airports,” the KFW report stated.
“Similar to the Cincinnati/Northern Kentucky airport in the US, the retail giant is also using DHL’s expanded distribution centre in Leipzig and is developing it into its own transport hub.
“The online retailer will continue to aggressively expand its air and land transportation network – and possibly also container line network.
“This is driven on the one hand by the online giant’s dynamic growth: sales are growing at double-digit rates in all divisions.
“On the other hand, logistics costs outside North America are too high: Amazon continues to incur operating losses in its international business because quick delivery to prime customers is too cost-intensive.
“It is therefore to be expected that the company’s own delivery and freight capacities will also be gradually expanded in Europe. It is only a matter of time when and in what form Amazon Air comes to Europe.”
The report pointed out that Amazon is now the fourth largest all-cargo operator in fleet size behind DHL, UPS and FedEx. Its fleet is expected to reach 70 aircraft by 2021.