Amazon.com’s Prime Air carrier could be a potential customer for Cessna manufacturer Textron, Inc., the head of the company’s aviation business told CNBC yesterday. “We see the whole freight industry as something that is going to double in the next 15 years, so we are investing in that market,” said Scott Ernest, Textron’s aviation chief executive.
When Amazon got into the aviation side of logistics with Prime Air in 2016, observers worried that it would cut into earnings for FedEx and UPS. Owning the retail platform and logistics side of the business meant that Amazon could undercut pretty much anyone in the market, if it chose to.
If the e-commerce giant adds smaller feeder aircraft to its airfreight operations – currently 767 freighters flying between its hubs – that shaves even more time from its deliveries.
Yesterday, FedEx Express agreed to purchase 50 clean-sheet-designed Cessna SkyCourier 408 aircraft, with options to purchase up to 50 additional aircraft. Delivery of the first aircraft is expected in mid-2020, with subsequent deliveries on a schedule of one aircraft per month, over a four-year period.
This means that FedEx could tie up production lines well past that date, if it opts for the additional 50 aircraft. So, when other operators can get their hands on these airplanes is still not clear.
It’s also worth noting that these new 408s represent a new size of aircraft for FedEx. They currently have all the Cessna 208s (basically Cessna Caravans, that would carry 10 or 12 passengers in passenger configuration). Then, the next size up is their ATR 42s, which would carry 42 passengers. These new aircraft are the equivalent of 19-passenger airplanes – although they do have a large enough cargo door to handle an LD3 container.
Regardless of whether these new aircraft will replace older Caravans, or if they are an addition, the deal signals a commitment by FedEx to hold onto its primacy on feeder routes, where it owns most of the planes plying the skies between smaller regional airports and its hubs.
This level of connectivity, in theory, gives it a leg-up over Amazon, so if the latter is considering investing in the new Cessna SkyCourier 408 aircraft, that opens up a whole new turf war between the integrators and the Seattle-based e-commerce giant.