Faster freighter cull at FedEx

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FedEx says it is to accelerate its aircraft retirements by retiring 15 freighters and 21 related engines.

The integrator will retire seven McDonnell Douglas MD-11s and 12 related engines, one McDonnell Douglas MD-10 and three related engines, three Airbus A300s and three related engines, and four Airbus A310-300s and another three powerplants. FedEx announced the move on 1 June and says it is part of its strategy to rationalise capacity and modernise its fleet. FedEx says it has made the decision to, “more effectively serve FedEx customers”.

The integrator adds that the impact of retiring these aircraft, engines and related parts has resulted in a non-cash impairment charge of $246 million, which it has recorded in its financial figures for May 2015.

FedEx also adds that it has adjusted the retirement schedule of an additional 23 aircraft and 57 engines. This was recognised in its May 2015 financial figures along with the $30 million in cash charges associated with these actions. These combined retirement changes it claims will not have a material impact on near-term depreciation expense.As of 28 February, the FedEx fleet totaled 673 aircraft.

In April, FedEx had a takeover bid of 4.4 billion euros ($4.8 billion) for Dutch courier firm TNT Express accepted by TNT. The deal is subject to European regulatory approval.

FedEx explained at the time that buying TNT will help it transform its European capabilities. FedEx intends to finance the offer by using available cash resources and through existing and new debt arrangements. Both companies say they anticipate the offer will close sometime in the first half of the 2016 calendar year.