Fedex set to retire older aircraft

Darren Wood
By Darren Wood September 18, 2019 11:29

Fedex set to retire older aircraft

Fedex (FDX) has said in its latest financial results that it is expecting to reduce capacity in its Express network by retiring older, less-efficient aircraft.

The company retired two MD10-10s earlier in the summer and will retire another nine in the current fiscal year.

By the end of its 2021 fiscal year, FDX will have removed the remaining nine, eliminating the MD10-10 fleet.

In addition, the company intends to remove its 13 MD10-30s by the end of its fiscal year 2022.

These are three engine aircraft that will be replaced by the two-engine 767Fs they have in the fleet and that will be delivered over the next four years. FDX operates 77 767Fs now and is scheduled to take delivery of 13 this fiscal year and 42 between FY21 and FY23.

As of August 31 2019, FDX had $611 million in deposits and progress payments on aircraft purchases and other planned aircraft-related transactions.

Helane Becker and Conor Cunningham at Cowen and Co, said: “The company is also looking into retiring its 10 remaining A310-300s, which are relatively small and are getting old. FedEx has 119 757-200Fs that could easily handle the volume of the A310s (although the 757s are about 3/4 of the size of the A310s).

“Management has outlined a number of steps they are taking to get back to the 13% to 15% earnings growth target. A reduction in air capacity after the peak should help costs, especially as the company retires its older three engine aircraft. This should also help improve the company’s sustainability index.”

Darren Wood
By Darren Wood September 18, 2019 11:29