Amazon launches freight service Air in India

Amazon has launched Amazon Air, its dedicated air cargo fleet, in India as the e-commerce giant bulks up its logistics infrastructure in the key overseas market where it has deployed over $6.5 billion.

The retailer has partnered with the Bengaluru-based cargo airline Quikjet to launch its maiden air freight service in the country, which it said will enable the firm to speed up its delivery. Amazon, which is utilizing the Boeing 737-800 for the service, said it will initially use Amazon Air to deliver goods in Delhi, Mumbai, Hyderabad and Bengaluru. An Amazon executive described the launch of Amazon Air as a “huge step forward for the aviation industry” without explaining how.

Amazon launched Air in the U.S. in 2016 with over three dozen Boeing freighter aircrafts. It also briefly tested the program in the U.K. India is the third market where Amazon has launched its freight service. The company said Air fleet includes over 110 flights across 70 destinations worldwide and it has invested “hundreds of millions of dollars” in its air logistics capabilities.

(Amazon calls its air freight service Amazon Air, but confusingly still uses the Prime Air moniker on the plane even as the latter unit now looks at drone deliveries.)

The move follows Amazon opening up its transportation and logistics network to third-party merchants, businesses and direct-to-consumer brands in the country late last year.

“Amazon India uses its own services for delivery of around 80-85% of orders and has opened up its delivery arm to others sellers. Delivery itself is a business which can achieve massive scale in India. So it makes sense for them to start this in India,” said Satish Meena, an independent analyst who tracks e-commerce sector in the country.

India is one of the key overseas markets for Amazon. But the company is lagging behind its chief rival, Walmart-backed Flipkart, in the country. Amazon has struggled to make inroads in smaller cities and towns in India, analysts at Sanford C. Bernstein said last year.

The company also shut down at least three business units – wholesale distribution Amazon Distribution, food delivery Amazon Food and learning platform Academy — in India last year.