Frieghter Converted Boeing 737 PEMCO
Frieghter Converted Boeing 737

Amazon’s Link to Pemco Purchase

Airborne Maintenance and Engineering Services (AMES) has become a significant player in aircraft cargo conversions via the purchase of Pemco World Air Services.

Tampa, Florida-based Pemco offers passenger-to-freighter conversions of Boeing 737 Classic aircraft as well as heavy maintenance services for the 767.

AMES, meanwhile, is a subsidiary of Air Transport Services Group, the cargo lift provider that in 2016 signed a five-year deal to wet lease 20 767 freighters to Amazon.

Based in Wilmington, Ohio, AMES offers heavy and line maintenance, parts provision, component repair and engineering services such as winglet retrofits.

“Based on Pemco’s existing domestic and international scale, this acquisition will expand access to maintenance service for customers of ATSG’s expanding fleet of Boeing 767 cargo aircraft,” says ATSG president and CEO Joe Hete.

While there is clearly a nod to Amazon in that statement, it is unclear how much influence the e-commerce giant had on the deal. Also, undoubtedly attractive were PEMCO’s ties to modification specialist Taikoo (Shandong) Aircraft Engineering Co. (STAECO) in China, where ATSG is pursuing a joint venture. (STAECO is a joint venture between HAECO, Shandong Aviation Group, HAECO Xiamen and Beijing Huakai Investment.)

For now, ATSG is placing greater emphasis on additional maintenance capabilities for both Boeing and Airbus aircraft than on freighter conversions, so there is little reason to speculate that Amazon is seeking to widen its cargo contract to narrowbody lift as well.

However, the deal does mark another horizontal step into aviation services for Amazon, which can acquire up to one-fifth of ATSG shares over the next five years.

ATSG’s consideration for Pemco was not disclosed, though Hete described it as “an investment in the same price range as our planned and completed stakes in cargo airlines in China and Europe”.

ATSG will not assume any of Pemco’s debt through the acquisition and expects the deal to boost its group profit for 2017.

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