FedEx cuts capacity by retiring 24 freighters

FedEx has cut capacity by retiring 24 freighters from the US domestic Express division as the slowing economy dents shipping volumes for the express carrier. The 18 A310-200 and six MD-10 freighters taken out of service added to five aircraft grounded last quarter and a planned retirement of 21 more in FedEx’s 2013 fiscal year.


FedEx cuts capacity by retiring 24 freighters


FedEx has cut capacity by retiring 24 freighters from the US domestic Express division as the slowing economy dents shipping volumes for the express carrier. The 18 A310-200 and six MD-10
freighters taken out of service added to five aircraft grounded last quarter and a planned retirement of 21 more in FedEx’s 2013 fiscal year.

“Along with the decisions to retire these 50 aircraft, we are also developing detailed operating and cost structure plans to further improve our efficiency,” Express CEO David Bronczek said. “We
expect to provide additional information on these plans in the fall.”

Average daily package volume in FedEx’s domestic Express business dropped four per cent in the fiscal third quarter. Operating margins in the Express unit have failed to recover to pre-recession
levels even as revenue in the last fiscal year reached the highest in at least a decade. Ross said he doesn’t expect growth in domestic volumes for “the next several years.”

Orders to US factories unexpectedly fell in April for a second month, pointing to a deceleration in manufacturing, the US Commerce Department said. That followed a report in end-May that US gross domestic product grew at a 1.9 per cent annual rate in the first quarter, down from a prior 2.2 per cent estimate.