Tags: FedEx | Charge | Jet | Cutbacks

FedEx Sees $100 Million Charge on Jet Cutbacks as Economy Slows

Monday, 03 Jun 2013 05:16 PM

FedEx Corp., operator of the world's largest cargo airline, will "aggressively" park older, less fuel-efficient planes to cut spending as the economy grows more slowly than forecast.

The moves will mean a $100 million impairment charge in the quarter that ends May 31 as the first of 86 aircraft and 308 engines are taken out of service, FedEx said in a statement Monday. Ten planes are being retired immediately, while Memphis, Tennessee-based FedEx speeds plans to permanently ground others.

FedEx's aircraft retirements follow a $1.7 billion restructuring announced last year as customers shift to less-expensive shipping methods, and are in addition to 24 planes grounded a year ago. FedEx is seen as an economic bellwether because of the variety of goods it moves around the world.

"With the planned acquisition of new aircraft and projected slower economic growth than previously forecast, FedEx Express is lowering maintenance costs by aggressively parking and retiring aircraft," David Bronczek, chief executive officer of FedEx Express, said in the statement.

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FedEx Corp., operator of the world's largest cargo airline, will park older, less fuel-efficient planes to cut spending as the economy grows more slowly than forecast.
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2013-16-03
Monday, 03 Jun 2013 05:16 PM
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