FedEx hastens fleet upgrade with 19 new Boeings
06/29/2012| 05:25pm US/Eastern
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(Reuters) - FedEx Corp (>> FedEx Corporation) is advancing its FedEx Express unit's fleet upgrade to more fuel-efficient aircraft by buying 19 additional Boeing Co (>> The Boeing Company) 767-300 aircraft.
(Reuters) - FedEx Corp (>> FedEx Corporation) is advancing its FedEx Express unit's fleet upgrade to more fuel-efficient aircraft by buying 19 additional Boeing Co (>> The Boeing Company) 767-300 aircraft.
This order is in addition to FedEx Express' agreement with Boeing announced in December 2011 to buy 27 new 767s for delivery between fiscal 2014 and 2018 and to delay delivery of 11 of the 777 aircraft to save on fuel and cut costs.
The company said on June 19 it was focused on cost cuts to boost profit margins during a prolonged period of slow global economic growth.
The latest purchase announced on Friday is for planes that will be delivered from fiscal 2015 to 2019 and will replace current MD-10 and A310-200 aircraft, FedEx said.
The new planes provide similar capacity as the MD-10s, but are about 30 percent more fuel-efficient and reduce unit operating costs by more than 20 percent, the company said.
FedEx, the world's No. 2 package delivery company, said the 19 new aircraft on order include four that used money previously applied to orders for four 777 aircraft.
Financial terms were not disclosed.
"FedEx Express is positioning itself for more profitable growth by modernizing its aircraft fleet and better aligning its U.S. domestic air network to match current and anticipated shipment volumes," FedEx Express Chief Executive Officer David Bronczek said in a statement.
Earlier this month, FedEx said it was permanently retiring various aircraft and engines, bringing the total to 50 aircraft being retired by the end of fiscal 2013.
FedEx shares closed 3.2 percent higher at $91.61 on the New York Stock Exchange on Friday.
FedEx has estimated its capital spending at $3.9 billion in fiscal 2013, and said on Friday the impact of the new aircraft order "is immaterial" to capital spending in fiscal 2013 and 2014.
FedEx Express now operates 19 long-range 777 freighters and said it is now committed to buying an additional 24 of them.
(Reporting by Lynn Adler in New York; Editing by Leslie Gevirtz and Matthew Lewis)
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