Atlas Air Signs Deal With Amazon For Air Transport Service, To Sell Stake

(RTTNews) - Atlas Air Worldwide Holdings, Inc. (AAWW) announced today that it will provide air cargo services to support Amazon's (AMZN) package deliveries to its customers.

As part of the inherent value creation and to align interests and strengthen the long-term relationship, Atlas Air Worldwide granted Amazon warrants to acquire up to 20 percent of its common shares at a price of $37.50 per share over a period of five years.

The new agreements are expected to be meaningfully accretive to Atlas Air Worldwide's earnings and cash flows over time.

The company said the long-term commercial agreements will include the operation of 20 B767-300 converted freighters for Amazon on a CMI basis by Atlas Air Worldwide's airline subsidiary, Atlas Air, Inc., as well as dry leasing by its Titan Aviation leasing unit.

The dry leases will have a term of 10 years, while the CMI operations will be for seven years, with extension provisions for a total term of 10 years. Operations under the agreements are expected to begin in the second half of 2016 and ramp up to full service through 2018.

The agreements also provide for future growth of the relationship as Amazon may increase its business with Atlas.

Atlas Air Worldwide granted Amazon warrants to acquire up to an additional 10 percent of AAWW's common shares at the same exercise price, over a period of seven years.