FedEx looks at less capex through 767F order and 777F deferrals

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Federal Express (FedEx) is keeping an eye on its cash reserves through the deferral of 11 Boeing 777F deliveries and the purchase of 27 new 767-300F aircraft.

The carrier ended the first half of its 2012 fiscal year with $1.89 billion in cash and cash equivalents, some $20 million more than in last year's corresponding period.

For the first six months to 30 November 2011, FedEx generated $2.17 billion net cash flows from operations. It used $2.3 billion cash flow in investing activities, of which capital expenditure amounted to more than $2.2 billion, some 8% more than in last years' first half. Cash flow used in financing activities totalled $260 million during the period, up from $59 million at 30 November 2010.

The capital spending forecast for fiscal 2012 remains $4.2 billion but the freight company plans to reduce its capital expenditure to $3.8 billion in fiscal 2013.

Since June 2011, the carrier has taken delivery of five new 777Fs. FedEx operates 17 777Fs and is due to receive two more aircraft for the reminder of fiscal 2012. Another two 777F are scheduled for July and September 2012.

In fiscal 2013, FedEx Express will place into service four 777s while two new 777F are expected to join in fiscal 2014. The company is also exercising two 777 options for aircraft to be delivered at the end of the delivery schedule.

Fedex announced the deferral of 11 Boeing 777F, two of which will be deferred from fiscal 2013, five from fiscal 2014 and one per year in fiscal 2015-18 in an effort to balance air network capacity with demand. At the same time it signed an agreement to acquire 27 new 767-300F aircraft, with three arriving in fiscal 2014 and six per year in fiscal 2015-18.