UPS, the world's No. 1 package delivery firm, operates 240 large planes
The leased planes will start to go into operation on April 1
Amazon has signed a deal to lease 20 Boeing767 widebody freighter aircraft to handle more of its own deliveries in the United States.
The deal comes at a time when the world's biggest online retailer is offering ever-faster, and increasingly free, deliveries for millions of online orders.
Amazon, which relies on carriers like UPS and FedEx to deliver most of its packages, spent $ 11.5 billion on shipping last year.
In a bid to assume more control over its supply chain and reduce costs, Amazon has rolled out thousands of trailers and launched a program that uses contract drivers to deliver fast orders.
But analysts said the long-rumored plan to build its own air fleet posed little threat to the leading delivery companies.
'This is an incremental negative for FDX and UPS as it will likely remove some higher yielding express freight and parcel volume from each of the respective networks,' RBC Capital Markets analyst John Barnes wrote in a client note.
UPS, the world's No. 1 package delivery company, operates about 240 large planes while FedEx has a fleet of about 370 Barnes noted.
FedEx and UPS shares were down about 1.5 percent.
FedEx said on Wednesday the announcement was not a surprise and called Amazon a valuable customer.
'We work closely with Amazon and have been aware for some time about their need for supplemental air capacity related to inventory management,' said Patrick Fitzgerald, senior vice president of integrated marketing and communications at FedEx.
The leased planes will start to go into operation on April 1 Amazon spokeswoman Kelly Cheeseman said in an email.
The duration of the leases will be five to seven years, lessor Air Transport Services Group said.
As part of the agreement, Amazon has the right to buy up to 19.9 percent of ATSG's stock over five years at $ 973 per share.
ATSG's stock soared almost 27 percent to a record high of $ 1490 before paring gains to about 16 percent.
Amazon also wants a section of airspace above our cities to be dedicated to hundreds of thousands of high-speed delivery drones.
Its vision, which is in line with that of Google's, is for tracked drones to communicate their positions to a centralised computer system available to all operators, similar to aviation airspace.
The move toward a 'drone superhighway' is the next step in Amazon's ambition plans to deliver packages via drone within 30 minutes.
Google is also hoping drones could eventually be used for disaster relief by delivering aid to isolated areas - and for package delivery.
A Nasa team is currently leading the effort to create a drone air-traffic system, named Unmanned Aerial System Traffic Management.
So far, 14 companies have signed agreements to work with the agency, Google, Amazon, Verizon Communications Inc. and Harris Corp.
In recent years there have been a growing number of close calls, including with other aircraft near airports, and close to helicopters.
The latest recommendations, put forward by Amazon, are a bid to speed approval of unmanned aerial vehicles in large portions our skies.
The proposals were unveiled today at a Nasa UTM Convention at Nasa Ames in California.
Gur Kimchi, a vice president who heads the Amazon's drone-delivery division, told Bloomberg Newsthat drones should remain within 400 feet (120 metres) of the ground.
There would be a slow lane for local traffic below 200 feet (60 metres) and a fast lane for long-distance transport between 200 (60 metres) and 400 feet (120 metres).
Altitudes between 400 (120 metres) and 500 feet (152 metres) would become a no-fly zone, and anything above that is already against FAA regulations.
In cases when aircraft would enter drone flyways, drones would automatically give way, he said. The vehicles much also be capable of communicating with each other.
A centralised computer system of known flight hazards, such as towers and high ground, would be developed and shared with drone users, allowing them to automatically avoid these areas.Bloomberg News.
'The idea being that it's not' Google is going to go out and build a solution and everyone else has to subscribe to it. ' The idea really is anyone should be free to build a solution. 'Read more:
Amazon Envisions Distinct Drone Zones for Future Delivery Fleet - Bloomberg Business
Google Wants a Piece of Air-Traffic Control for Drones - Bloomberg Business
When drones fall from the sky | The Washington Post