In a nod to sluggish global economic activity, FedEx Express will accelerate the retirement of 66 older aircraft and 308 related engines that are less fuel efficient and less reliable than newer planes, the company said Monday.
During the previous year ended Feb. 28, the FedEx airline spent $3.8 billion on fuel for its 660 aircraft. Last October, FedEx announced a $1.7 billion cost-cutting initiative.
The express carrier will take a $100 million impairment charge on its balance sheet to reflect the planes' drop in value since their purchase. Moving up the schedule for taking planes out of service will also result in a $74 million depreciation expense in fiscal year 2014.
FedEx said it will move up the retirement date by several years for the planes, which include 47 MD10-10s, 13 MD-10-30s and 16 Airbus A310-200s.
Two Airbus A310-200, three A310-300 and five MD10-10 aircraft will be immediately retired.
FedEx is replacing the MD10s with Boeing 767 freighters, which offer similar capacity and a 30-percent increase in fuel efficiency with a minimum 20-percent reduction in unit operating costs, it said.
Also, the Memphis, Tenn.-based overnight delivery company will complete the retirement of its Boeing 727-200 fleet. The Boeing 757 is more fuel efficient and has 20-percent more payload capacity than the 727.
"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," FedEx Express CEO David Bronczek said in a statement.
Last July, FedEx ordered 19 767 freighters from Boeing to be delivered between 2015 and 2019 to replace the MD10 and A310 aircraft. - Eric Kulisch