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Air Transport Services Group agrees deal with Amazon to operate air transport network 09 March 2016

Amazon granted rights to purchase ATSG equity

Air Transport Services Group, Inc. has reached agreements with Amazon Fulfillment Services, Inc., an affiliate of Amazon.com, Inc., to operate an air cargo network to serve Amazon customers in the US, to ensure air cargo capacity to support one and two-day delivery for Amazon’s customers.

Since last summer, ATSG has been working closely with Amazon to demonstrate that a dedicated, fully customised air cargo network can be a strong supplement to existing transportation and distribution resources.

The commercial agreements will include the leasing of 20 Boeing 767 freighter aircraft to Amazon Fulfillment Services, Inc. by ATSG’s Cargo Aircraft Management (CAM), the operation of the aircraft by ATSG’s airlines, ABX Air and Air Transport International, and gateway and logistics services provided by ATSG’s LGSTX Services. The duration of the 20 leases will be five to seven years; the agreement covering operation of the aircraft will be for five years.

In conjunction with the commercial agreements, ATSG also has agreed to grant Amazon warrants to acquire over a five-year period up to 19.9% of ATSG’s common shares at US$9.73 per share, based on the closing price of ATSG common shares on February 9, 2016.