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Amazon Giving Old Jets New Life

Photographer: Jason Alden/Bloomberg

BLOOMBERG, OCTOBER 5, 2020

Old jets may be cheaper to purchase but are less environmentally friendly which hurts Amazon’s carbon-reduction goals.

By Siddharth Vikram Philip for Bloomberg – Not all of the old fuel-guzzling planes sidelined by commercial airlines end up in a desert boneyard during the pandemic. Many find a second life in the fleets of Amazon and other cargo carriers.

Amazon has been among the biggest lessors of converted Boeing 767s in the past five years as online shopping soared — even more so since Covid-19 struck. A limited choice of converted planes and efforts to cap costs have left the virtual retailer with some of the freight industry’s oldest aircraft, many of them pre-dating the company itself.

In June, Amazon said it was expanding its 70-strong fleet by leasing 12 converted Boeing 767-300 passenger jets, including a 29-year-old model delivered in May.

While operating used planes can save money, there’s an environmental cost. The aging planes make it harder for haulers like Amazon Air, FedEx and United Parcel Service to shrink their carbon footprint and meet climate pledges.

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“There’s certainly a trade-off between the environment and economics when it comes to freighters,” said Andreas Schafer, a professor of energy and transport at the UCL Energy Institute in London and an authority on aircraft carbon-dioxide emissions.

Amazon, which has pledged to make 50% of its shipments net zero carbon by 2030, operated 38% more flights in the U.S. in the first half of 2020, compared with the same period last year, according to Luxembourg-based Cargo Facts Consulting. Emissions from its jets rose 35% in 2019 as it shipped 1.9 billion pounds of cargo on 40,163 flights, the consulting firm estimates.

Amazon declined to comment on the numbers, saying that for the company as a whole, carbon emissions rose 15% last year.

Emissions data on the environmental impact of cargo carriers are patchy. But airlines say their newer generation jets are 20% more fuel efficient than the models they’re phasing out.

“It really is about the economics. And with fuel costs so low lately, “I can’t see anyone buying a new plane.”

Still, the economic case for buying older aircraft remains compelling. A 20-year-old 737-800 converted freighter costs $21 million to $23 million, according to London-based consultant IBA Group. That compares with more than $100 million for a new Boeing 737-800 at the 2019 list price. A 16-year-old wide-body 767 is about a third of the price of a brand new one, though that factor narrows after discounts.

Freighters fly significantly fewer hours a day than commercial airlines do, making capital-to-fuel costs a very different business than passenger jets, said Richard Aboulafia, an aerospace analyst at Teal Group. “It really is about the economics,” he said. And with fuel costs so low lately, “I can’t see anyone buying a new plane.”

Siddharth Philip in London

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