Amazon establishes a specialized air cargo service in India for faster deliveries 2023

Amazon establishes a specialized air cargo service in India for faster deliveries

The world’s largest online retailer Amazon started its air cargo service, Amazon Air, on Monday in India in order to expand the services available to its Prime subscribers and speed up delivery.

According to regulatory records obtained from Tofler, the debut occurs just days after Amazon Transportation Services got 400 crores in new funding from Amazon.  For the time being, Quikjet, a cargo aircraft operator that is a part of the ASL Aviation Group, has leased two Boeing 737-800 aircraft to the company.

Each flight will operate between Bengaluru, Hyderabad, Mumbai, and Delhi at first; a large portion of Amazon’s customers currently come from these four regions. Each flight is outfitted to undertake 20,000 shipments per day, exclusively for Amazon. The business declared that while it keeps focusing on the more effective Tier 2 and beyond regions, it will gradually expand its services.

Amazon CEO Andy Jassy is currently doing a thorough review of the company’s spending as it opposes a deteriorating economic outlook and declining retail sales while Amazon Air launches in India. The most recent round of Amazon’s 28-year-long greatest layoffs, which are likely to result in the termination of 18,000 workers, started last week.

Jassy has tried to reduce costs in various ways, such as by implementing a hiring freeze for the corporate personnel at Amazon, canceling some projects, and halting warehouse expansion. Jassy has previously stated that the company expects to maintain chasing long-term prospects and keep investing in its shops, advertising, and cloud-computing operations, among other things, even as he works to cut costs.

The corporation aspires to undertake more control over its services.”Now that we are not dependent on commercial aircraft, we can schedule when the planes will depart. Since everything is in our control when it comes to air, we have more freedom and insight over the whereabouts of our goods. Additionally, we are better able to manage delays”, according to Akhil Saxena, vice president of customer fulfillment for Amazon’s APAC, MENA, LATAM, and global customer care regions.

As a result, we will be able to accept orders later in the evening and still be able to deliver the following day. All Indian pin codes, according to Amazon, are delivered roughly 97% of the time within the following two days.

The company launched just days after receiving $400 million in new funding from Amazon for Amazon Transportation Services, according to regulatory papers obtained by Tofler.

According to Abhinav Singh, director of customer fulfillment, supply chain, and ATS at Amazon India, many people in Tier 3 and Tier 4 zones are becoming more accustomed to making online payments. The debut of the air services is focused on making it possible to provide customers more quickly, he said.

“We don’t look at initiatives to have an immediate quantifiable result,” Singh said in reference to the effect of the air service on Prime subscriptions. The intent with Air is to increase the benefits we provide to Prime users, which will have an effect and lead to a rise in the number of Prime subscriptions.

He did not say whether or not customers will have to pay greater Prime membership costs, but he did say that the array of services provided by Prime “much transcends the Prime fee itself, in terms of advantages. This also delivers free and quick deliveries, music, and other things.

The e-commerce giant has funded hundreds of millions of dollars and created tens of thousands of new jobs worldwide in air logistics since the inception of Amazon Air. According to Sarah Rhoads, vice president of Amazon Global Air, “We’re excited to debut Amazon Air in India to ensure we can give our increasing customer base a great assortment, cheap costs, and speedier deliveries.”

In 2016, Amazon introduced Air in the United States using more than 30 Boeing freighter aircraft. The program was also briefly tried in the UK. The third market where Amazon has introduced its shipping service in India. In other words, India becomes the first country outside of the US and other parts of Europe where Amazon has established air services, where it is the only e-commerce operator.

The Indian market is one of Amazon’s most important worldwide. In the present day, Amazon has a fleet of 110 planes that it uses to deliver packages to 70 countries.

About 80–85% of orders are delivered by Amazon India using its own services, and it has made its delivery division available to other vendors. The delivery industry in India has tremendous potential for growth. Therefore, it makes sense for them to launch this in India, according to Satish Meena, an independent reviewer who monitors the nation’s e-commerce market.

The Telangana minister for industry, commerce, and information technology, Kalvakuntla Taraka Rama Rao, spoke at the event on Monday and said that since 2014, “Amazon’s love story with Hyderabad has gone from strength to strength.” He asserted that Amazon regularly picks Hyderabad for its big initiatives.

Amazon’s largest campus, its Asia-based fulfillment center, and the $4.4 billion Amazon Web Services region are all located in Hyderabad. The minister also asserted that in 2020–21, aviation cargo traffic rose by 35% and that by 2028, the RGIA will see 40 million passengers. Even though two aircraft are being introduced today, he highlighted the necessity to expand the fleet.

Tofler statistics indicate that Amazon Seller Services lost less money in India in FY22 than they did in FY21—3,649.2 billion rupees instead of 4,748.1 billion. For the fiscal year ending in March 2022, the store’s operational deficit was Rs. 1,285.9 crores, down from Rs. 2,970.6 crores the previous year. A total of ‘21,462 crores was earned in operating revenue during the period, an increase of 32.4% compared to the previous year.

In FY22, Amazon Transportation, the company’s local logistics division, registered total revenue of ‘4,581 crores, up 12.6% from the same time in the earlier year. The unit’s losses increased 38% from 68.7 crores in FY21 to 95 crores in FY22.

In contrast, even while revenues increased 34% year over year to $10,477 crore, Flipkart’s net loss increased by 51% to ‘4,362 crores in FY22. Amazon’s domestic gross merchandise value (GMV) is between $18 and $20 billion, somewhat less than Flipkart, which is owned by Walmart and had a GMV of $23 billion but was having trouble turning a profit, according to Bernstein.

Last year, the business also closed down at least three Indian business units, including the learning platform Academy, food delivery service Amazon Food, and wholesale distribution Amazon Distribution.

edited and proofread by nikita sharma