Amazon Acquires Land To Build An Air Cargo Hub

Reports indicate that Amazon has acquired land measuring approximately 210 acres for an air cargo hub that the online retail giant is putting up at Cincinnati-Northern Kentucky International Airport. The Seattle, Washington-based e-commerce giant already has an agreement with Cincinnati-Northern Kentucky International Airport and the purchased land will be in addition to acreage already leased.

The long-term lease was signed last year in January for the development of a Prime Air hub and is understood to run for a minimum of 50 years. After the long-term lease, local and state tax incentives that Amazon received totaled approximately $40 million. Amazon also received from the airport approximately $5 million. About 2,700 jobs are expected to be created at the hub with 600 of the positions being permanent ones.

Additional jets

Unconfirmed reports indicate that Amazon is also likely to order another 100 jets. This is based on the fact that the new hub possesses space that can hold that number of aircraft. At the moment Amazon Prime Air has leasing deals with two air cargo firms – Air Transport Services Group and Atlas Air Worldwide Holdings.

This comes amidst a report showing that after Amazon acquired Whole Foods Market, online grocery deliveries for the e-commerce giant rose by 35% to reach a figure of $135 million between September and December last year compared to the period between May and August. Some of the best-selling items included smokehouse bacon, unsalted butter, organic riced cauliflower, shredded parmesan cheese and organic baby spinach. The report was prepared by One Click Retail, a data analytics firm. According to food analysts, products from Whole Foods as assisting AmazonFresh in its competition with online grocery firms.

“It…may be bringing new people into AmazonFresh. That would be a real positive,” the senior vice president of Inmar Willard Bishop Analytics, a food retail consultancy, Jim Hertel, said.

Investor interest

The One Click Retail report has coincided with a note from Morgan Stanley indicating that investors will continue to be drawn to Amazon owing to the growth of the online retail giant’s high margin income streams. This includes advertising, Prime subscriptions as well as Amazon Web Services. With increased gross profit, Amazon will be in a better position to invest in new venture such as video, Alexa and international expansion.

Morgan Stanley also indicated that the strong top-line growth of Amazon in recent years will continue to be attractive to investors. The double-digit revenue growth has largely been driven by Echo device sales, increase in Prime membership numbers and the increasing popularity of online shopping.

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