FedEx accelerates more aircraft retirements

Washington DC
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FedEx Express is accelerating retirements of additional aircraft as it continues a programme to modernise its fleet with more efficient aircraft.

By 1 July, the carrier will have retired all of its Boeing 727-200 freighter aircraft. It is now flying 14 of 37 727-200s in its fleet, Flightglobal's Ascend Online database shows. The rest are in storage.

The carrier is also retiring two Airbus A310-200s and four related engines, three Airbus A310-300s and two engines, and five Boeing MD-10-10 aircraft and 15 engines.

The Memphis-based logistics company will record impairment charges of $100 million in May tied to these retirements.

The carrier will also accelerate by "several years" the retirements of 47 MD-10-10 aircraft and 172 related engines, 13 MD10-30 aircraft and 16 A310-200 aircraft with 60 related engines.

FedEx will see an additional $74 million depreciation expense year-over-year in 2014 from accelerating these retirements.

"We are modernizing our aircraft fleet by retiring older, less-efficient, and less-reliable aircraft and replacing them with modern aircraft to build a fleet with higher reliability and better cost efficiency," said David Bronczek, president and chief executive of FedEx Express. "With the planned acquisition of new aircraft and projected slower economic growth than previously forecast, FedEx Express is lowering maintenance costs by aggressively parking and retiring aircraft."

FedEx did not comment on the specific timeline for retiring the aircraft or the engine types that will be retired.

Flightglobal's Ascend database shows that its Airbus A310 fleet is powered by General Electric CF6, Pratt & Whitney JT9D or PW4000 engines. The MD10-10 aircraft have GE CF6 engines.

The aircraft are in addition to a separate announcement the carrier made a year ago to retire aircraft more quickly. In June 2012, FedEx said it would retire 18 Airbus A310-200 freighters and 26 engines, as well as six MD-10-10 cargo aircraft with 17 engines.

As part of a fleet modernisation programme, FedEx is replacing ageing aircraft with Boeing 767-300, 757 and 777 freighters. The carrier has pending orders for 46 additional 767-300ER freighters for delivery between 2014 and 2019 and nine 777-200 freighters scheduled for delivery between 2014 and 2017, Ascend data shows. The carrier also has an agreement with United Airlines to acquire up to 30 Boeing 757s from United Airlines between 2013 and 2015. These aircraft will be converted into freighters from passenger configurations.

FedEx operated 660 aircraft as of 28 February, including 368 jets.