Amazon plans to buy a stake in a Canadian air freight company as it seeks to expand its delivery network in the country.
The retailer and marketplace will be able to buy 9.9% of Cargojet’s variable voting shares over 6.5 years, depending on it delivering C$400 million in business.
It will be able to buy a further 5% of Cargojet’s shares based on delivering up to an additional C$200 million in business.
The ecommerce giant already makes use of Cargojet’s overnight air network and charter aircraft services to move packages to last mile locations.
Cargojet plans to add more non-stop flights, allowing later departures and earlier arrivals to the 15 cities it already serves, as well as add further cities to the network.
The firm said these improvements would “further improve fleet utilisation, create additional opportunities, and continue to help Cargojet enhance its customer-neutral, cost effective network for all its customers.”
Adam Baker, VP of global transportation at Amazon, said: “Cargojet has been a key player in our Canadian middle mile operations for several years.
“We’re thrilled to build a longer-term relationship that will allow us to provide even faster service to Amazon customers in Canada.”
Cargojet CEO Ajay Virmani said: “The commercial relationship the Cargojet team continues to build with Amazon has now allowed us to further strengthen and align our long-term strategic commercial interests.
“Our continuous commitment to provide value added services enables us to earn all of our customers’ trust as the leading overnight air-network operator.”