FedEx has announced that it plans to reduce its aircraft fleet by 29 units, as inflation and reduced demand continue to impact the Memphis-based company’s earnings.
Based on FedEx’s fourth quarter fiscal report, results were negatively affected by continued demand weakness and cost inflation, though this was partially offset by cost-reduction actions and US domestic package yield improvement.
In order to mitigate the negative effects of ongoing demand weakness, FedEx has said that it made the decision to give certain aircraft and other assets an early retirement.
The company will also retire 18 aircraft and 34 related engines from service in order to modernize its air fleet, improve its global network and better align air network capacity with current and anticipated demand.
FedEx Express will park 20 aircraft during fiscal year 2024, and permanently retire nine additional MD-11 freighters, the company said.
However, the company is also anticipating the arrival of 10 Boeing aircraft which were ordered several years ago.
“The solid close to the fiscal year demonstrates the significant progress Team FedEx has made in advancing our global transformation while adapting to the dynamic demand environment,” Raj Subramaniam, FedEx Corp. president and chief executive officer said in a statement.
“FedEx is becoming a more flexible, efficient and data-driven organization as we significantly lower our cost structure, drive enhanced profitability, and deliver outstanding service for our customers.”