December 18, 2019: Minneapolis-based Sun Country Airlines, a low-cost passenger airline will start flying a fleet of 10 converted B737-800Fs in Q2 2020 for Amazon. These cargo planes for Amazon will be in addition to Sun Country's existing growth plans. The airline has about 30 airplanes with plans to add four to eight aircraft every year for the next several years.
The deal was announced earlier this year to expand Amazon Air with the leased single-aisle planes.
The Seattle-based ecommerce major has been growing its air cargo fleet for the last three years, with the goal of having 70 leased airplanes by 2021. Amazon currently contracts with cargo carriers, Atlas Air, Southern Air and Air Transport Services Group. But it has expressed frustrations over protracted labor issues at those companies and threatened to pull its business.
Owned by private equity firm Apollo Global Management, Sun Country will use the business to help level out the seasonality of leisure flying, which surges in the first quarter when vacationers head south, CEO Jude Bricker informed CNBC.
Those seasonal fluctuations are among “the core challenges we have with growing our business,” said Bricker, adding that Amazon’s demand peaks in the fourth quarter, before the airline’s period of peak demand.
Even though the six-year deal deal was struck last week, Bricker noted that they first approached Amazon to sell a used plane, which did not work out. Earlier this year, Amazon came back to the airline informing about a cargo deal.
Cargo flying “wasn’t part of our plan,” he said.
Sun Country will add 150 pilot jobs over the next 18 months, bringing its total to 500, to keep up with the extra flying Amazon will require.
From the first flights next spring, the new cargo service for Amazon Air will quickly grow to represent 20 percent of all of Sun Country's flying. It is the first time Amazon has hired a commercial passenger airline for flying its packages.
Sun Country has a history of running charter flights for sports teams, casinos and the military. In the 1990s, the airline had a few short-term contracts with the department of defense and the now-defunct Gemini Air Cargo. For Amazon, the airline is responsible for maintenance support, the flight crew, the FAA certificate and support security and dispatch, but won't be loading and unloading the cargo. Once the contract begins, Sun Country's flying schedule will break down 20 percent for Amazon, 20 percent for charter flights and 60 percent for its scheduled passenger service.
Amazon Air is currently building a $1.5 billion cargo hub at Cincinnati/Northern Kentucky International Airport where it hopes to house the fleet.
Meanwhile, FedEx ended its air-cargo partnership with the e-commerce giant in June and later suspended its ground-shipping contract.