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FedEx retires a dozen freighter aircraft in efficiency move

Eric Kulisch
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FedEx has removed 12 freighter aircraft from its fleet, including two Boeing 757-200s similar to the aircraft in the foreground. (Photo: FedEx)

Key Takeaways:

  • FedEx permanently retired 12 aircraft (including Airbus A300-600s, MD-11s, and Boeing 757s) and 8 engines, incurring a $21 million impairment charge.
  • This retirement is part of a fleet modernization and streamlining effort to align with anticipated demand and reduce costs; the company plans to reduce aircraft investment to $1 billion annually for several years.
  • The reduction brings FedEx's fleet to 698 aircraft, a 7% decrease from fiscal year 2022, reflecting a shift toward widebody freighters for international cargo and reduced US operations after a contract expiry.
  • Despite the fleet reduction, FedEx reported a slight revenue increase and an 8% rise in operating margin due to cost-cutting measures and higher volumes.
Key takeaways sponsored by SONAR

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.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He was runner up for News Journalist and Supply Chain Journalist of the Year in the Seahorse Freight Association's 2024 journalism award competition. In December 2022, Eric was voted runner up for Air Cargo Journalist. He won the group's Environmental Journalist of the Year award in 2014 and was the 2013 Supply Chain Journalist of the Year. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at ekulisch@freightwaves.com