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American Shipper

FedEx dumps A380s for Boeing 777s

FedEx dumps A380s for Boeing 777s

   In a major blow to European aircraft manufacturer Airbus, FedEx Express said Tuesday it has cancelled its order for 10 A380 superjumbo freighters in the wake of a two-year production delay, and placed an order with rival Boeing for 15 777 freighters.

   As part of the deal, FedEx has an option to buy 15 additional 777 jets.

   FedEx said it needed a more dependable supplier that could deliver planes faster in order for it to keep up with growing demand for international shipping services.

   'The availability and delivery timing of this aircraft, coupled with its attractive payload range and economics, make this choice the best decision for FedEx, its customers, shareowners and employees,' said Fred Smith, FedEx Corp.'s chairman and chief executive officer, in a statement.

   FedEx said it would continue to purchase other widebody models from Airbus. The Memphis, Tenn.-based express package and freight carrier is scheduled to receive six new A300-600 aircraft in 2007.

   The 777 has a cargo payload capacity of 171,000 pounds and a range of 6,600 nautical miles. The 777 can carry 8,500 more pounds and fly 2,200 miles farther than the MD-11F, FedEx's primary long-haul aircraft.

   The A380 freighter can carry 150 tons of cargo with a range of 5,600 nautical miles. It can accommodate 71 large cargo pallets. The standard Boeing 747-400 freighter, by comparison, can carry 124 tons and has a range of 2,600 miles. The A380 has nearly twice the payload of the MD-11.

   FedEx was the original launch customer for the Airbus A380 freighter, and UPS followed its competitor by ordering 10 A380s of its own. Airlines have said they are exploring their options with regard to their A380 orders, with many hinting that they expect substantial compensation from Airbus to cover the production delays announced in June and September. But FedEx is the first customer to actually cancel an order. Most of the orders so far have come from passenger airlines.

   'Nothing has changed with our order right now. We continue to explore all of our options,' said Mark Giuffre, UPS Airlines spokesman. UPS is seeking more detailed information from Airbus about the cause of the production delays — which have primarily hinged so far on wiring problems — and the likelihood that Airbus will be able to stick to its revised delivery schedule, he said.

   FedEx and UPS are seeking long-haul aircraft that can carry more cargo and make fewer stops to speed up delivery times. The A380 was projected to help FedEx meet its growth projections in China, where exports to the United States and Europe are booming.

   Now the 777 will have to fill that role.

   'The Boeing 777F will allow FedEx Express to fly directly between major markets and hubs in Asia, Europe and the U.S. with more freight and in less time than it takes today, improving fuel efficiency and lowering total operating costs,' said David J. Bronczek, president and CEO, FedEx Express.

   FedEx is expected to take delivery of four of the 777 aircraft in 2009, eight in 2010 and the remaining three in 2011.

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