Amazon.com Inc. (NASDAQ:AMZN) is planning to buy used long-range Boeing Co. (NYSE:BA) and Airbus SE (OTC:EADSY) cargo planes that can fly directly from China to the U.S., Bloomberg reported Wednesday.
What Happened: Amazon is shopping for refurbished cargo versions of 10 Airbus A330-300 aircraft as well as an unspecified number of 777-300ER aircraft, as per the report that cited people familiar with the matter.
The planes represent a step up from the mid-size Boeing 767 aircraft that have served as the backbone of Amazon’s fleet for five years, the report added.
Why It Matters: Amazon’s dedicated air network, Amazon Air, was founded in 2016 as part of the e-commerce giant’s efforts to reduce its dependence on third-party carriers and also deliver products faster to consumers.
The purchase of long-range cargo planes would enable Amazon to fly goods directly from China to the U.S. and help avoid shipment delays at major U.S. ports.
It was reported in July, citing the Wall Street Journal, that Chinese e-commerce giant Alibaba Group Holding Ltd. (NYSE:BABA) is intensifying its rivalry with Amazon by aiming to deliver goods from China to anywhere in the world in 72 hours.
Price Action: Amazon.com shares closed 1.1% higher in Wednesday’s regular trading session at $3284.28 and further rose 0.2% in the after-hours session to $3291.11.