Amazon to lease planes for delivery

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Amazon.com Inc (AMZN.O) will lease 20 Boeing (BA.N) 767 freighter aircraft, lessor Air Transport Services Group Inc (ATSG.O) said on Wednesday, as the online retailer moves closer to setting up its own air delivery network.

The deal comes at a time when Amazon, which offers fast and increasingly free deliveries for millions of online orders, has been trying to make shipments even faster as well as assume more control over its business and costs.

EXPLORE MORE: Amazon may be trying to push customers into prime memberships

The e-commerce giant has been testing deliveries by drones, but has not said when it expects to have them in service.

The duration of the leases will be five to seven years, ATSG said.

As part of the agreement, Amazon also has the right to buy up to 19.9 percent of ATSG's stock over five years at $9.73 per share. The price is at a 17.3 percent discount to ATSG's Tuesday closing price of $11.77.

ATSG's shares jumped 21 percent to $14.25 in premarket trading.

RELATED: The best selling products on Amazon in February

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Most popular items on Amazon (November)
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Amazon to lease planes for delivery

No. 1 best seller in Albums:

Joanne by Lady Gaga, $14.99

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No. 1 best seller in Toys and Games: 

Cards Against Humanity, $25

No. 2 best seller in Toys and Games:

Hasbro Pie Face Game, $17.77

No. 1 best seller in Beauty:

Dead Sea Mud Mask, $14.95

No. 2 best seller in Beauty:

Gillette Fusion ProGlide Manual Men's Razor Blade Refills, $24.22

No. 1 best seller in Books: 

Cooking for Jeffrey by Ina Garten, $21

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No. 3 best seller in Books:

First 100 Words, $3.36

No. 1 best seller in Electronics: 

Fire, 7" Display, Wi-Fi, 8 GB, $49.99

No. 2 best seller in Electronics:

Amazon Fire TV Stick, $39.99

No. 3 best seller in Electronics: 

Amazon Echo, $179.99

No. 1 best seller in Make Up:

Wunderbrow Eyebrow Make Up, $22.00

No. 1 best seller in Appliances:

 GE RPWFE Refrigerator Water Filter, $46.34

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(Reporting by Sai Sachin R in Bengaluru; Editing by Anil D'Silva)

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