FedEx permanently grounds 15 older planes

FedEx Corp. said yesterday it has permanently retired 15 freighter airframes and 21 related engines, moves designed to continue to rationalize capacity at its FedEx Express air and international unit. Memphis-based FedEx said it took a $246 million noncash impairment charge last month as a result of the moves.

Of the 15 aircraft, seven were McDonnell Douglas MD-11s, four were Airbus A-310s, three were A-300s, and one was an MD-10. FedEx also said it has adjusted the retirement schedules of an additional 23 airframes and 57 engines. It did not provide details.

As part of a major restructuring announced in 2012, FedEx implemented cost reductions at its flagship FedEx Express unit, which still generates the bulk of the company's overall revenue. The moves were aimed at aligning the unit's cost structure with relatively stagnant demand for air services within the U.S. and, to a lesser extent, overseas. It would also substitute aging planes like the MD-10 with the more modern Boeing 767 freighter, which has similar capacity to the older plane, but which the company said delivers a 30-percent increase in fuel efficiency, improved reliability, and a 20-percent reduction in unit operating costs.

As of Feb. 28, FedEx Express' fleet totaled 673 aircraft, including 383 jet aircraft, the company said.