FedEx Express agreed to purchase 50 additional Boeing 767-300F aircraft with an option for 50 more as part of the company’s fleet modernization effort.
FedEx Express, a wholly owned subsidiary of FedEx Corp., has agreed to purchase 50 additional 767-300F jet freighter aircraft from The Boeing Company as part of the company’s fleet modernization effort, according to a statement from the express carrier.
The announcement comes shortly after Taipei, Taiwan-based EVA Air finalized an order with the aircraft manufacturer for five Boeing 777 freighters, worth more than $1.5 billion at list prices.
In addition to the 50 confirmed orders, FedEx also has options to purchase another 50 Boeing 767F aircraft, the company said in a statement. The twin-engine 767Fs will replace older freighters, including Boeing MD10s and MD11s as well as Airbus Group A300-600 and A310 aircraft, which FedEx plans to retire in the coming years.
Reuters estimates the total value of the 100-aircraft order at $9.97 billion at list prices. The initial order of 50 planes, which brings FedEx Express’ total to 106 firm orders for 767Fs from Boeing through fiscal 2023, are expected to be delivered from 2018 through 2023.
As such, FedEx said its total capital spending for fiscal 2016 will remain at $4.6 billion and that the impact of the new order on its fiscal 2017 spending is immaterial.
“Acquiring additional 767F aircraft is a continuation of our very successful air fleet modernization program and will enable us to reduce structural costs, improve our fuel efficiency and enhance the reliability of our global network,” David J. Bronczek, president and CEO of FedEx Express, said in a statement.
Meanwhile, The Boeing Company reported an 11 percent increase in revenues to $24.5 billion in the second quarter of 2015 compared to the second quarter of 2014, thanks to record commercial deliveries. Despite the strong growth in revenues, however, net income at the company fell 33 percent to $1.11 billion for the quarter.
Boeing’s earnings per share fell 29 percent, from $2.24 per share in Q2 2014 to $1.59 per share in Q2 2015. The company attributed the decline to a previously announced $536 million after-tax charge – equal to $0.77 per share – on its KC-46 Tanker program.
Boeing adjusted its earnings per share guidance for 2015 from $8.10 to $8.30 per share to between $7.60 and $7.80 per share to reflect the second quarter KC-46 Tanker charge. The company’s revenue expectations remained the same at $94.5 billion to $96.5 billion for the full year.
“Record commercial airplane deliveries to customers worldwide drove solid revenue growth, and the strength of our overall portfolio and diligent focus produced significant operating cash flow during the quarter,” Boeing President and CEO Officer Dennis Muilenburg said of the results. “Strong operating performance across our commercial and defense production programs partially offset the tanker charge and enabled us to maintain our commitments to return cash to our shareholders and invest in innovation and our people.”
FedEx places $10b freighter order with Boeing
