Here are some highlights from his presentation and Q & A:But more broadly for the year, the main -- the bulk of the savings will come from the Express division where we'll be reducing flight frequencies.

—————————————————————————————————————

We've already made great progress in that regard. We've eliminated roughly 8 or 9 international frequencies, about 23 domestic frequencies thus far that were -- came into the schedule change we did in October. We've got another 8 or 9 domestic frequencies that will go in, in November. So we're rigorously looking at that and evaluating our plans for post peak here as we come into the beginning of the calendar year after the holiday season.

—————————————————————————————————————

So besides reducing the flight frequencies, we'll be parking aircraft temporarily as we don't need as much lift as we anticipated going into the year…

—————————————————————————————————————

So we identified $4 billion, which is an increase relative to where we were back in June. Express is the biggest piece of that. The air network, again, further opportunity there.

—————————————————————————————————————

And after a period of rapid growth, we are very much focused on continuing to lower our liability costs and the cost of risk that's associated with that.

—————————————————————————————————————

Network 2.0... set[s] the stage for furthering the integration and alignment and leveraging our combined networks so that we can improve asset efficiency with pickup and delivery as well as line haul optimization between networks rather than singularly within networks.

—————————————————————————————————————

And our CapEx spend on aircraft, we were about $2.4 billion the last few years. It will be more in the $1.5 billion to $1.7 billion here over the next couple of years and then line of sight to reduce that further after that.

—————————————————————————————————————

We'll complete the modernization of our major Express hubs in Memphis and Indianapolis largely by '25.

—————————————————————————————————————

So that's the overview of where we're focused under our Deliver Today, Innovate for Tomorrow strategy with a relentless recognition by the management team that our first quarter results were not satisfactory, were disappointing to all of us. But we are relentlessly going after what we need to do to both react to the changed circumstances before us now and, equally important, implement the structural change to create long-term value and leverage the capabilities we've built over nearly 50 years.

—————————————————————————————————————

We absolutely will realize more of the structural cost savings in the second half of the year. That's where you get more of the benefits start to roll in principally from -- at Express, the flight reductions. When you park the aircraft, particularly the older airplanes that we're parking, you're deferring a maintenance event, which is a significant expense while at the same time, you have relatively low ownership costs on those. So it's an operationally and financially flexible way to manage capacity there.

—————————————————————————————————————

Question:
And what's the right framework for investors to think about the permanent savings there, $2.2 billion, $2.7 billion, another $4 billion by '25. What degree of those are permanent and can push beyond that $1 billion [to get it to everybody]?

Mike Lenz, CFO
Answer:
Yes. So look, to frame that, that $2.2 billion to $2.7 billion is actions we took specifically, some of which were not something I want to be permanent. For example, we eliminated any assumption of accruals for our variable compensation plans, which is a broad-based plan. So that -- I don't put that in the permanent bucket, but the aspects like less flying, that's -- we will not fly as much.

We're up to -- I think we're up to 16 flights over the Pacific was the plan. And so we -- there's no scenario where we envision coming back to that level of transpacific flying even if you were to see a shift in the -- every downturn begets an upturn, but even in that fortunate circumstances, we wouldn't go back to those level of flying. So that's why I put that in that category there.
…
Well, when the pandemic came along, we quickly had to reverse course on that, but now we're fully focused on what we got to do to rightsize the air network at Express. And certainly, we'll -- we will retire our oldest 3-engine wide-bodies at the end of this calendar year. We call them the MD-10s. And then the 3-engine MD-11 is the next fleet that we'll look to retire.