Why is FedEx Junking Boeing Jets?
FedEx Corp (NYSE:FDX) announced the retirement of 18 Airbus and six Boeing (NYSE:BA) aircraft with their related engines as a part of its overall plan to replace aging aircraft to improve fuel efficiency. The company, which is globally the No. 2 package delivery company, will take a related 26 cent charge per share during the current quarter.
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The aircraft to be retired are not in active service and have mostly been parked for some time now. The company has already mothballed five aircraft in this quarter, and has plans to retire 21 more in the following fiscal quarter, bringing the total to 50 aircraft.
“Along with the decisions to retire these 50 aircraft, we are also developing detailed operating and cost structure plans to further improve our efficiency,” FedEx Express Chief Executive David Bronczek said in a statement.
FedEx had a fleet size of 688 aircraft as of the end of February.
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