DALLAS – The world’s largest cargo airline FedEx (FX), has announced that it will cut its fleet by 29 aircraft after revenues in the fourth quarter to May 31 fell by 13% to US$10.4bn.
The freight operator said this was due to yield pressures and demand dynamics that have shifted since the end of the pandemic. According to Erik Kulisch from Freight Waves, “domestic aircraft utilization at FedEx Express fell 10% sequentially in April, following a March rebound, and is down 17% year over year.” as per a new Morgan Stanley research.
In the recently completed fiscal year, FX has already retired 18 aircraft, including 12 MD-11s, four Boeing 757-200s, and a pair of Airbus A300-600s. It also permanently retired its remaining MD-10-30s in December.
It will now park an additional 20 airframes and permanently retire nine MD-11s from service. The remaining examples will be removed by 2028. FedEx currently has a fleet of some 700 aircraft, including Boeing 757-200SFs, 767-300Fs, and 777Fs. It also has numerous aircraft on order, including 27 all-new Cessna 408 SkyCourier aircraft, and 16 ATR72-600Fs, the latter of which it was the launch customer.
The move forms part of the carrier’s cost-saving program to reduce annual costs by US$4bn by June 2024. Operating incomes fell by 51.5% from the previous year to US$430bn. Meanwhile, fourth-quarter adjusted operating income dropped 20% to US$1.77bn.
Not only has the fleet been slashed, but FX has also cut its workforce by some 29,000 members and closed several of its facilities. It also plans to utilize its partner airlines more to help improve cash flow. Dozens of flights have also been removed from the schedule, reducing its global flight hours by 12% yearly.
Featured Image: N114FE, FedEx Express Boeing 767-300F @KSLC. Photo: Michael Rodeback/Airways