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FedEx Continues To Downsize In Face Of Economic Challenges

by John M. White |

FedEx is the world's largest all-cargo carrier with a fleet of some 670 aircraft, but as the economy has slowed is reducing its operating budget by $ 1B dollars.  In order to accomplish this goal the company is retiring some of its older aircraft like the Airbus A310-200s and Douglas MD10s. The company plans to reduce the fleet between now and the end of the second quarter by some 14 aircraft.Click on image to enlarge At the same time a small number of the company's aircraft remain grounded because of the over capacity available versus the amount of business available today.  Most analysts feel that the environment for FedEx is neither improving or worsening, and the company anticipates it will resume its growth when the economy begins to recover. Meanwhile, an article in Barron's suggest that getting rid of the corporate jet in order to improve the balance sheet and removing a symbol of corporate excess may actually hurt a business.  The reason: many small competitors under the radar can eke out an advantage using their business jets to service customers and work with suppliers in a more timely manner, creating an economic opportunity for those companies at the expense of the larger ones who are dumping their aircraft fleets. The bottom line is that business jets, when used properly, make a great deal of sense.  Even President Obama knows the value of this type of travel - just see how much he is using Air Force One!  Of course, if I had access to Air Force One I think I would get out a lot too! Until next time keep your wings straight and level Hersch! JetAviator7

Unseen Fire

This is a damned unnatural sort of war; The pilot sits among the clouds, quite sure About the values he is fighting for; He cannot hear beyond his veil of sound, He cannot see the people on the ground; he only knows that on the sloping map Of sea-fringed town and country people creep Like ants — and who cares if ants laugh or weep?

— R. N. Currey

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