Reports say FedEx is making major aircraft purchase from Boeing

Transportation and logistics bellwether FedEx said yesterday it has agreed to acquire 50 Boeing 767-300 freighters, according to various media reports.

This follows a June announcement from the company in which it said it planned to accelerate retirements of planes to reflect demand and modernize its fleet in retiring 15 planes and 21 related engines, while adjusting the retirement schedule for additional aircraft, according to a Wall Street Journal report.

The report said that this is the Boeing 767-300 order ever at nearly $20 billion for 50 new 767 freighter aircraft, with options for an additional 50, with each aircraft having a list price of $199.3 million.

Reuters reported that the aircraft will be delivered by Boeing for the FedEx Express segment of FedEx between fiscal years 2018-2023, while bringing the number of “firm” FedEx orders for 767 freighters to 106.

“Acquiring additional 767F aircraft…will enable us to reduce structural costs, improve our fuel efficiency and enhance the reliability of our global network,” David J. Bronczek, president and chief executive officer of FedEx Express, said in Reuters report.

Reuters also noted that this purchase comes at a time when the air cargo sector has been fairly soft since the global financial crisis in 2008 and has dealt with weak demand, overcapacity, and competition from passenger plane belly space that has reduced yields and the need for dedicated air freighters.

FedEx has several aircraft modernization programs underway, including the purchase of B767F aircraft, company spokesman Jess Bunn told LM.

“These aircraft are significantly more fuel-efficient per unit than the aircraft types previously utilized, and these purchases are necessary to achieve significant long-term operating savings and to replace older aircraft,” he noted. “The B767 provides similar capacity as the MD10 it replaces, with improved reliability, an approximate 30 percent increase in fuel efficiency and a minimum of a 20 percent reduction in unit operating costs. During the last few years, FedEx Express has retired from service and adjusted the retirement schedules of numerous aircraft.”