FedEx accelerates the retirement of 30% of its jet freighter fleet

  • David Harris
  • June 4, 2013
  • 1

Three days after the end of its 2013 fiscal year, FedEx said it would accelerate the retirement of a significant percentage of its jet freighter fleet. In a brief statement on its website on 3 June, the company disclosed that:

  • It had permanently retired ten freighters from the FedEx Express fleet in May -– five MD-10-10Fs and five A310-200Fs/-300Fs
  • It would “accelerate by several years” the retirement of seventy-six more freighters –- forty-seven MD-10-10Fs, thirteen MD-10-30Fs, and sixteen A310-200Fs
  • It would complete the retirement of its remaining 727-200Fs by 1 July 2013 (it had twenty-three of this type in its fleet on 1 March)

 

FedEx Express had a total of 368 jet freighters at the end of its third fiscal quarter (28 February 2013), and the announcement means that 30% of that fleet – 109 freighters – will be retired on an accelerated  basis over the next few years. Of course, FedEx will also be adding new freighters during that time, so its total fleet will not drop by 109 units.

 

So what will the FedEx jet freighter fleet look like in five years, at the end of FY2018? The chart at right shows our best guess. Based on the company’s previously announced schedule for delivery of new aircraft, and on the assumption that all the accelerated retirements will have been completed by 2018, we expect the FedEx fleet at that time to consist of 296 freighters. Regarding the additions, FedEx has fifty 767-300Fs and twenty 777Fs on order with Boeing. It has also agreed to buy fourteen more 757-200s, which it will presumably have converted to freighter configuration in the next two or three years. But while we believe all of the 757s and almost all of the 767s will join the fleet before the end of FY2018, FedEx has worked with Boeing to defer over half of its remaining 777 orders until after that time.

 

As shown in the chart, this revised estimate for the fleet at the end of FY2018 is 63 fewer than were in the fleet at the end of the 2013 fiscal year, and, perhaps more significantly, 50 fewer than projected in FedEx’s plans just three months ago, at the end of the third fiscal quarter.  Also of interest is that the number of different freighter types in the fleet will have been reduced from the current eight to just five, which means a considerable reduction in both maintenance and training costs. Combine these savings with the reduced fuel, crew, and maintenance requirements of a smaller fleet composed of newer and more efficient aircraft, and the savings to FedEx will be considerable.

 

In conclusion, we note that these changes will leave FedEx with a fleet remarkably similar to that of its US competitor, UPS. The UPS fleet, while a bit smaller, is also made up of five types, all but one of which correspond with the FedEx fleet. UPS currently operates 234 jet freighters, including 757-200Fs (75), A300-600Fs (53), 767-300Fs (55), MD-11Fs (38), and 747-400Fs (13). Presumably UPS will make some changes over the next five years, but unless those changes are radical, the two fleets will be remarkably similar.

 

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One thought on “FedEx accelerates the retirement of 30% of its jet freighter fleet

  1. 777F vs. (waiting for) the A380F … was a good decision

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