FedEx Sees $175M Hit From Prolonged MD-11 Grounding

‍DALLAS — FedEx (FX) expects to incur US$175 million in additional costs as it works around the mandatory grounding of its MD-11 freighter fleet during the peak shipping season, with the aircraft now unlikely to return to service until spring, the company said Thursday.

The grounding of 28 MD-11 aircraft, including three spares, began on Nov. 8 following the crash of a UPS MD-11, after investigators identified potential structural fatigue cracks in engine pylons across the fleet. Regulators have yet to issue final inspection and return-to-service guidance.

FedEx Chief Financial Officer John Dietrich said the loss of MD-11 capacity reduced adjusted operating income by US$25 million during the fiscal second quarter and cut roughly 4% of FX’s global air cargo capacity during the industry’s busiest period. Most of the financial impact is expected to fall in December, when demand and outsourcing costs are highest.

To mitigate disruptions, FX redeployed larger aircraft, consolidated flights, shifted maintenance schedules, increased trucking capacity, and engaged third-party airlift. While the measures strained operations and crews, the company said shipment flows have largely been maintained.

Despite the disruption, FX reported strong quarterly results, driven by higher yields, solid package volumes, and continued cost savings from its multiyear efficiency program. Dietrich indicated the company currently expects the MD-11s to return to service in the fiscal fourth quarter, which runs from March through May.

Why it matters: The prolonged MD-11 grounding underscores the vulnerability of global cargo networks to fleet-wide technical findings, especially during peak season, and highlights how legacy freighter types can quickly become operational chokepoints when regulatory action intervenes.