Dive Brief:
- Atlas Air Worldwide Holdings announced Aug. 24 it had entered into a five-year agreement with FedEx Express to provide it with five 747-400 freighter aircraft for peak season flying from 2017 to 2021.
- An agreement for 2016 was already in place, but this it the first time the air cargo carrier signed a long-term contract with the express delivery company.
- Atlas stated last month it would target contracts with express delivery services and e-commerce companies in order to offset losses from a slowing traditional freight market.
Dive Insight:
The traditional airfreight market grew by 2.4% in 2015, while the express market grew by 4.9% and e-commerce increased by 20.4% during the same period, Air Cargo News reports. As a result, the air freight carrier is looking to adapt to a shifting market presence.
Long-term contracts are one way to do this. Atlas recently signed a seven-year deal with Amazon to provide the e-commerce giant with 20 B767-300 aircraft, and it also has deals in place with UPS, DHL, and China Post among others. Establishing long term agreements will provide the air freight carrier a reliable revenue stream as it modifies its business model to cater for a new supply chain.
