FedEx Corp. agreed to buy 19 Boeing Co. 767 cargo jets, the first freighters the planemaker has sold this year as shippers curbed purchases amid a slowing global economy.
The Boeing 767s will be delivered from fiscal 2015 to 2019, replacing Boeing MD-10 and A310 models from Airbus SAS, FedEx said in a statement yesterday. The order has a catalog value of $3.3 billion, though customers typically negotiate discounts.
New jets will help profitability at FedEx, the world’s largest cargo airline, by paring fuel costs as the economy crimps express shipments of goods from cell phones to pharmaceuticals. Air cargo fell 2.3 percent in the first four months of the year from 2011, the International Air Transport Association said.
“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,” said David J. Bronczek, head of FedEx Express.
The 767s will be about 30 percent more fuel-efficient than the MD10 jets they’re replacing, helping to reduce unit operating costs more than 20 percent, FedEx said.
FedEx also agreed to convert four orders for 777 freighters, with a list value of $1.1 billion, to an equivalent purchase order for 767s. The Memphis, Tennessee-based company’s large planes now include Airbus A300s and A310s that are more than 25 years old.
The shipping company retired 24 jets earlier this month to cut capacity in its domestic Express division. Taking them out of service added to five jets grounded last quarter and planned retirements of 21 more in FedEx’s 2013 fiscal year.
FedEx on June 19 predicted profit of $6.90 to $7.40 a share in the fiscal year through May, compared with an average estimate of $7.38 from analysts.
Revenue and earnings growth will be impacted by “weaker economic conditions” such as the European debt crisis, and slowing growth in Asia, executives said on an earnings call at the time. Customers are shifting from premium to deferred products as they seek to reduce shipping expenses, a trend expected to continue in 2013, executives said.