FedEx Corp. said Tuesday that it permanently retired 12 aircraft and took a $21 million impairment charge during the fourth quarter as part of an effort to streamline the air network in line with anticipated demand and modernize the fleet.
The Memphis, Tennessee-based express logistics giant said it removed seven Airbus A300-600 aircraft, three large MD-11 tri-engine freighters and two Boeing 757-200 (large narrowbody) freighter aircraft from the fleet. It also got rid of eight engines. During the fourth quarter in 2024, FedEx decommissioned 22 Boeing 757 cargo jets.
FedEx (NYSE: FDX) said in its previous earnings report on March 20 that it had exercised options to buy eight Boeing 777 freighters and pushed back retirement of the MD-11 fleet from 2028 until 2032 because of strong international parcel demand. It also announced plans to acquire 10 additional ATR 72-600 turboprop freighter aircraft, with deliveries scheduled for the tail end of the decade.
Over the last three years, FedEx has removed a net 31 jet aircraft from its fleet, which is a 7% reduction versus fiscal year 2022. Chief Financial Officer John Dietrich said FedEx plans to reduce aircraft investment to $1 billion in the current fiscal year and maintain that level for several years.
The aircraft retirements reduce FedEx’s fleet to 698 aircraft, comprising 382 mainline jets and 316 feeder planes operated by partner airlines. FedEx’s fleet size has ranged from 670 to 710 aircraft since 2018. FedEx still has 90 757s, 34 MD-11s and 58 A300-600s in service.
FedEx is flying less in the United States after its contract with the U.S. Postal Service expired in September, its strategy to pursue premium international air cargo that is traditionally consolidated and booked on airlines by freight forwarders has increased the need for widebody freighters.
FedEx reported revenues for the quarter ended May 31 inched up less than 1% to $22.2 billion and that operating margin increased 8% due to structural cost reductions in its multi-year Drive initiative and higher volumes at FedEx Express.
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