It is, indeed, a good time for The Boeing Company as FedEx Express, a wholly owned subsidiary of FedEx Corporation, has just announced that it has agreed to purchase 50 more 767-300F aircraft from Boeing to add to their fleet. Moreover, the company says it also has a standing option to purchase an additional of 50 767F.
FedEx Express President and Chief Executive Officer David J. Bronczek explained the reason behind his company’s need to buy more planes. He said, “Acquiring additional 767F aircraft is a continuation of our very successful air fleet modernization program and will enable us to reduce structural costs, improve our fuel efficiency and enhance the reliability of our global network.”
FedEx’s firm order of 50 767-300F aircraft is expected to be delivered by Boeing from fiscal year 2018 to fiscal year 2023. Nonetheless, FedEx maintains that the company’s total capital spending for 2016 will stay at $4.6 billion. Moreover, the newest firm order brings FedEx’s firm order total with Boeing to 106 aircrafts until fiscal year 2023.
Last month, FedEx release its fourth quarter earnings result for fiscal year 2015. The company’s revenue for fiscal year 2015 actually dropped by 4% to $6.70 billion, compared to fiscal year 2014’s revenue of $7 billion. This was said to be due to “lower fuel surcharges and unfavorable currency exchange rates.”
Meanwhile, the same fourth quarter also saw the retirement of as much as 15 FedEx aircraft along with 21 related engines. Moreover, the company had also adjusted the retirement schedule of 23 other aircraft as well as 57 engines. This brought about impairment and related charges amounting to $276 million. However, $246 million of the charges were non-cash. In the midst of all this, FedEx looks positively toward the near future as it continues with the FedEx Express fleet modernization program.
As Frederick Smith, FedEx Corp. chairman, president and chief executive officer, explained, “Significant acquisitions announced in the year promise to strengthen our portfolio of services and change what’s possible for customers. I am very proud of the FedEx team for its accomplishments and look forward to a successful fiscal 2016.”
Boeing’s first ever delivery of its 767 freighter to FedEx Express was back in September 2013. FedEx Express Executive Vice President of Air Operations James R. Packer could not be happier with their new aircraft back then. He remarked, “The 767 is approximately 30 percent more fuel efficient and has unit operating costs that are more than 20 percent lower than the aircraft they will replace. The net effect is an aircraft that is more affordable to operate and has lower carbon emissions because of better fuel efficiency.”
The freighter model is actually based on Boeing’s 767-300ER (extended range) passenger aircraft. It is capable of carrying as much as 58 tons of cargo. Moreover, it can also carry as much as 23,980 gallons of fuel and only requires a mere 28 minutes to get filled up.
Earlier this year, Boeing delivered its 100th 767-300 freighter to FedEx. Boeing Vice President and General Manager of the 767 program Brad Zaback said, “This 100th delivery is a great achievement for the entire 767 team. Everyone on the 767 works hard to successfully build and deliver on time for all our customers, helping them deliver goods and packages around the world every day.”