UPS, FedEx invest in Airbus freighters

By Staff -- Logistics Management, 2/1/2001

UPS Airlines of Louisville, Ky., will spend $6 billion on 60 A300-600 freighters from France's Airbus Industrie to handle projected long-term growth in its airfreight business. Its rival, FedEx Express, is buying 10 A380-800F freighters from the same company in order to service its overseas hubs at a lower cost.

The UPS purchase is driven by an expected need for more wide-body, shorter-haul jet freighters that can operate economically on varied routes outside the United States. The company's growth in Europe, Asia, and Latin America is creating the need to place a dedicated air fleet in each region, in addition to the aircraft now flying between the United States and global destinations, according to a statement from UPS.

During the third quarter of 2000, UPS's international export volume climbed 23 percent over figures for the same period last year. The A300-600 can carry 22 containers on its upper deck and seven containers on the lower. It has a maximum structural payload of 109,600 pounds and a range of 2,500 nautical miles. The acquisition will be spread over nine years.

The new aircraft will be added to a fleet of 238 jets that include Boeing 727, 747, 757, and 767 aircraft and McDonnell Douglas DC-8s. In November, UPS announced that it would acquire 13 converted MD-11 aircraft from Boeing.

In contrast, FedEx decided to buy the A380-800F freighters following a two-year study of its need for very large, long-range aircraft. Experts in aviation and international trade forecast an average of 7-percent growth in international trade each year over the next 20 years, the company says.

FedEx expects to take delivery of the aircraft in 2008, replacing its current freighter model, the MD-11. The A380 can fly directly between Asia, Europe, and the United States with nearly twice the payload of the MD-11, according to Frederick W. Smith, chairman, president, and CEO of FedEx Corp., the parent of FedEx Express.