Amazon picks low-cost airline Sun Country to expand its cargo business

Key Points
  • Amazon in June added 15 Boeing 737s to its cargo arm as the e-commerce giant brings more logistics in house.
  • Sun Country, owned by private equity firm Apollo, will fly 10 of the dedicated cargo planes, starting in the second quarter.
  • Amazon Air, the company's dedicated air service, contracts other airlines to fly the jetliners.
A Prime Air cargo plane, operated by Inc., sits on display with other passenger jets during the 53rd International Paris Air Show at Le Bourget, in Paris, France.
Jason Alden | Bloomberg | Getty Images

Amazon is turning to an unlikely partner to help expand its package-delivery business: a low-cost airline.

Sun Country Airlines, a small, Minneapolis-based leisure carrier, said late Tuesday it will start flying a fleet of 10 converted Boeing 737-800 freighters in the second quarter. It's part of a plan Amazon announced earlier this year to expand Amazon Air with the leased single-aisle planes.

Amazon has been growing its Amazon Air unit, which currently counts on cargo airlines Atlas Air and ATSG to fly its packages. Amazon owns warrants to buy minority stakes in both companies and has been bringing more logistics operations in house. In June, FedEx said it would no longer provide express shipping for Amazon.

Sun Country, which is owned by private equity firm Apollo Global Management, will use the business to help level out the seasonality of leisure flying, which surges in the first quarter when vacationers head south, CEO Jude Bricker told CNBC.

Those seasonal fluctuations are among "the core challenges we have with growing our business," said Bricker, adding that Amazon's demand peaks in the fourth quarter, before the airline's period of highest demand.

The deal came together last week, but Bricker said he first approached Amazon about a year ago to try to sell the company a used plane, which didn't pan out. Then Amazon earlier this year came back to Sun Country about a cargo deal.

Cargo flying "wasn't part of our plan," Bricker said.

Sun Country will add 150 pilot jobs over the next 18 months, bringing its total to 500, to keep up with the extra flying Amazon will require. The pilots for Sun Country who fly the Amazon routes will still be under passenger carrier rest and other rules that apply to the other pilots for the airline.

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Correction: Amazon approached Sun Country in mid-2019. An earlier version misstated the year.