Dive Brief:

• Amazon on Friday will reveal its first Prime Air-branded cargo aircraft in an inaugural flight during Seattle’s annual Seafair Air Show, the company announced hours ahead of the event.

• The Boeing 767-300, dubbed Amazon One, is one of 11 planes flying for Amazon through air cargo partners Atlas Air and ATSG in conjunction with the e-retail giant’s ambitious logistics and fulfillment efforts. In an ode to its Prime members, Amazon One features a tail number made up of a Prime number.

• Amazon added that the Prime Air transportation network will expand to 40 leased planes over the coming months.

Dive Insight:

Retail delivery, a phenomenon ignited and reinvented by Amazon, is increasingly expected to be fast and cheap.

At least to the consumer, that is. Amazon’s shipping and fulfillment costs are growing faster than its revenue, but so far the company has focused on making moves to make those operations more efficient, rather than scaling back on its fulfillment and delivery offerings to its Prime members. In addition to air cargo leases, Amazon’s efforts include an Uber-like crowd-sourced ground delivery network it calls Amazon Flex, the purchase of thousands of semitrailers and, of course, drones. 

“Creating an air transportation network is expanding our capacity to ensure great delivery speeds for our Prime members for years to come,” Dave Clark, Amazon’s SVP of worldwide operations, said in a statement. “I cannot imagine a better way to celebrate the inaugural flight than in our hometown at Seafair alongside Amazon employees and Seattle residents.”

But the question remains: Is Amazon ultimately planning to become a shipper in and of itself, or is it simply taking steps to drive down fulfillment costs? Financial research firm Cowen & Co. questions the viability of a full-fledged Amazon shipping service. In a note this spring, Cowen analyst Helane Becker argued that Amazon lacks the density and reach of shipping incumbents UPS and FedEx, and contended that rival retailers would be unlikely to support a delivery service owned and operated by any competitor, especially Amazon.

"By delivering for other customers, Amazon would be able to tap into sales data and could undercut shippers using their service,” Becker wrote. “Most retailers view Amazon as their largest competition and probably won't want to share this data.”