(AMZN) Inks Commercial Deals with Atlas Air Worldwide (NASDAQ:AMZN) signed a long-term commercial agreements with Atlas Air Worldwide Holdings (NASDAQ:AAWW) to provide air cargo services to support the e-commerce giant’s package deliveries to customers.

The stock price of Air Worldwide increased more than 28% to $49.10 per share around 1:05 in the afternoon in New York.

This is the second deal struck by Amazon this year as it seeks to expand its delivery network and reduce its dependence on United Parcel Service (NYSE:UPS) and FedEx Corporation (NYSE:FDX).  In March, Amazon signed a commercial agreement with Air Transport Services Group (NASDAQ:ATSG) to lease 20 Boeing 767 freighters.

Amazon may acquire up to 30% stake in Atlas Air Worldwide

The agreements include the operation of 20 B767-300 converted freighters for Amazon on a CMI (crew, maintenance and insurance) basis by Atlas Air and dry leasing by its unit, Titan Aviation.  The CMI operations and dry leases will have a term of ten years and seven years, respectively.

Atlas Air Worldwide also granted warrants to Amazon to acquire 20% of its common stock for $37.50 per share over a period of five years, with vesting tied in part to the start of the operations of 20 b767-300 freighter aircraft and other conditions. The e-commerce giant was also given the option to acquire additional 10% of its shares at the same price over a period of seven years.

In a statement, William J. Flynn, President and CEO of Atlas Air Worldwide, said, “We are excited to begin a strategic long-term relationship with Amazon to support the continuing expansion of its e-commerce business and to enhance its customer delivery capabilities. “He also appreciate its confidence in the capabilities, global scale and operating excellence of his company.

On the other hand, the e-commerce giant’s Senior Vice president for Worldwide Operations, Dave Clark said, “We are excited to welcome a great provider, Atlas Air, to support package delivery to the rapidly growing number of Prime members who love ultra-fast delivery, great prices and vast selection from Amazon.”

Amazon aims to control more if its logistics

In a note to investors, Colin Sebastian, an analyst at Robert Baird & Co. commented, “The natural step for Amazon is controlling more of its own transportation and logistics, including additional air cargo and other transportation/operations, as these are almost a necessity to continue the rapid expansion of Prime and Prime Now.”

He added that the e-commerce giant wants to “alleviate some of the stresses” on its internal fulfillment/logistics network since its partners particularly UPS and FedEx fail to accommodate Amazon’s rapid growth.