Subscribe to our free, weekly email newsletter!


FedEx Express set to upgrade aircraft assets

By Jeff Berman, Group News Editor
December 15, 2011

During its fiscal second quarter earnings announcement today, FedEx announced it has inked a deal with The Boeing Company to modernize its FedEx Express aircraft fleet.

Under the terms of the agreement FedEx Express said it will purchase 27 new 767-300F aircraft, with three arriving in fiscal 2014 and six per year in fiscal 2015-2018. FedEx officials said that the 767s will replace the company’s MD10 aircraft, many of which are more than 40 years old.

They added that these 767s provide similar capacity as the MD10s and are more reliable, are 30 percent more fuel efficient and offer a 20 percent reduction in unit operating costs.

FedEx also said that FedEx Express is delaying the delivery of 11 777F aircraft, with:
-two deferred from fiscal 2013;
- five from fiscal 2014; and
- and one per year in fiscal 2015-2018 to better balance air network capacity to demand.

With these deferrals, FedEx said FedEx Express will place into service four 777s in fiscal 2013 and two in fiscal 2014, as well as exercise two 777 options for aircraft to be delivered at the end of the delivery schedule.

“FedEx Express took action during the quarter to adjust its network, particularly in Asia, as recent inventory destocking trends have impacted demand for our FedEx Express services,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer, in a statement. “The deferral of our 777 aircraft deliveries is a continuation of those efforts, enabling us to make appropriately-timed international 777 capacity additions over the next decade. With these actions, we expect fiscal 2013 capital expenditures to moderate to approximately $3.8 billion.”

On today’s earnings call, Dave Bronczek, president and CEO of FedEx Express said the modernization of its aircraft fleet is of FedEx’ most important decisions for the future, explaining that FedEx has been aggressive in its fleet modernization efforts, beginning with the replacement of its aging 727s with 757s and continuing the acquisitions of 777s to support its international growth.

Today’s announcement to continue its modernization efforts will provide FedEx Express, he said, will reduce the structural costs of its operations into the future while maintaining a high level of service reliability shippers have come to expect.

“This is an excellent decision for FedEx in meeting our future operational requirements and lower costs and lower overall investments,” he said.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The “good news story” of the season appears to be generated by officials at The Port of Oakland, who report that it has taken additional steps in an ongoing effort to manage a surge of inbound container vessel calls.

The PMA, which represents employers at America’s 29 West Coast ports, has finally asked for federal mediation in its contract negotiations with the ILWU.

Seasonally-adjusted (SA) for-hire truck tonnage in November was up 3.5 percent compared to October, which was up 0.5 percent over September at 136.8 (2000=100), marking the highest SA on record.

UPS said that through this acquisition it will augment its healthcare expertise and network in Europe, specifically in the fast growing healthcare markets in Central and Eastern Europe.

Carloads were up 12.1 percent at 312,271, and intermodal at 280,337 containers and trailers saw a 4.5 percent annual gain.

Article Topics

News · Air Cargo · Air Freight · FedEx · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA