Amazon will build $1.5 billion air hub in Northern Kentucky - WDRB 41 Louisville News

Amazon will build $1.5 billion air hub in Northern Kentucky

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Amazon unveiled its air cargo fleet in 2016 Amazon unveiled its air cargo fleet in 2016
One of Amazon's many warehouses One of Amazon's many warehouses

LOUISVILLE, Ky, (WDRB) -- Online retail giant Amazon will build a $1.5 billion hub for its budding Prime Air shipping service at Cincinnati/Northern Kentucky International Airport in Hebron, Kentucky.

Kentucky officials on Tuesday approved an offer of $40 million in state and local economic development incentives to entice Amazon to go through with the project, which could create up to 2,700 jobs, according to state documents.

In a press release, Amazon said the project would create "more than 2,000 jobs."

The jobs would pay an average hourly wage of $26, according to details provided to the Kentucky Economic Development Finance Authority, which approved the incentive offer. But the $26-per-hour figure includes the value of employee benefits in addition to cash compensation.

The $40 million in incentives would be paid out at $4 million a year over a decade, assuming Amazon follows through with the investment and job creation.

“As we considered places for the long-term home for our air hub operations, Hebron quickly rose to the top of the list with a large, skilled workforce, centralized location with great connectivity to our nearby fulfillment locations, and an excellent quality of living for employees. We feel strongly that with these qualities as a place to do business, our investments will support Amazon and customers well into the future,” said Dave Clark, Amazon Senior Vice President of Worldwide Operations.

Last year, Amazon said it would lease 40 cargo planes to serve as its Prime Air fleet, an effort to build out the company's own air transportation network. The new hub at CVG will load, unload and sort packages for that fleet of planes.

"As the company's capacity demand continues to grow, the need to invest in infrastructure is necessary in order to meet and exceed the needs of its customers," according to the KEDFA staff's description of the project. "The company is considering developing a centralized air hub at the CVG Airport to serve the growing fleet of Prime Air cargo planes."

Amazon primarily relies on FedEx and UPS -- whose own global air hub is at Louisville International Airport -- to get its packages to customers. Prime is Amazon's $99-per-year service that provides two-day shipping on many items it sells.

In October, stock analysts asked UPS executives about the shipping giant's own plan to order 14 new cargo planes given Amazon's ambition to build its own delivery network.

UPS CEO David Abney called Amazon a “good customer” with a “strong, mutually beneficial relationship” with UPS.

“Amazon and all of the other shippers will get the benefit” of UPS’ increased capacity for air cargo, he said.

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