FedEx Corp. Accelerates Aircraft Retirements
$276 Million Impairment and Related Charges in FY15
MEMPHIS, Tenn., June 1, 2015 … FedEx Corp. (NYSE: FDX) announced today it has permanently retired 15 aircraft and 21 related engines as it continues to rationalize capacity and modernize its aircraft fleet to more effectively serve FedEx Express customers.
The permanent retirement of aircraft and related engines includes:
- Seven MD11 airframes and 12 related engines;
- Three A300 airframes and three related engines;
- Four A310-300 airframes and three related engines; and
- One MD10-10 airframe and three related engines.
The impact of retiring these aircraft, engines and related parts resulted in a non-cash impairment charge of $246 million recorded in May 2015.
FedEx has also adjusted the retirement schedule of an additional 23 airframes and 57 engines. FedEx also recognized in May 2015 $30 million in cash charges associated with these actions. These combined retirement changes will not have a material impact on near-term depreciation expense.
FedEx Express Aircraft Fleet Facts
- As of Feb. 28, 2015, FedEx Express’s fleet totaled 673 aircraft, including 383 jet aircraft. For reference, see the Q3 FY15 statistical book at http://investors.fedex.com.
- During the four quarters ended Feb. 28, 2015, FedEx Express spent $3.15 billion on 1.14 billion gallons of jet fuel.
- The B767 provides similar capacity as the MD10, with improved reliability, an approximate 30% increase in fuel efficiency and a minimum of a 20% reduction in unit operating costs.