Go Back  Airline Pilot Central Forums > Airline Pilot Forums > Cargo
FedEx to park more aircraft????? >

FedEx to park more aircraft?????

Notices
Cargo Part 121 cargo airlines

FedEx to park more aircraft?????

Old 03-20-2013, 12:20 PM
  #1  
Banned
Thread Starter
 
Joined APC: Oct 2012
Posts: 404
Default FedEx to park more aircraft?????

Maybe buying 777s wasn't so smart after all....




FedEx Misses Estimates as Asia Air Freight Slows - TheStreet


"We expect these international revenue trends to continue," Graf said. "We have other actions under way beyond those already included in our profit improvement program. Some of these additional actions may involve temporarily or permanently grounding aircraft, which could result in asset impairment or other charges in future periods."




03/20/13 - 08:04 AM EDT
Stock quotes in this article: FDX


MEMPHIS (TheStreet) -- FedEx (FDX_) said Wednesday it will cut air capacity to Asia after a disappointing quarter where it missed estimates as net income fell 31%.

The company said it sees continued weakness in international air freight markets and offered guidance that is below estimates for the fiscal fourth quarter and full year. In premarket trading, FedEx shares were down $3.66 to $102.80.

Excluding items, the overnight package shipper said it earned $1.23 a share in the fiscal third quarter ended Feb. 28. Analysts surveyed by Thomson Reuters had estimated $1.39. Revenue rose 4% to $11 billion. Analysts had estimated $10.9 billion. In the same period a year earlier, excluding items, FedEx earned $1.55 a share.

Including costs of $47 million related to a voluntary buyout program, FedEx earned $361 million, or $1.13 a share, compared with $1.65 in the same period a year earlier. Operating income fell 28% to $589 million and operating margin fell to 5.4% from 7.7%.

"The third quarter was very challenging due to continued weakness in international air freight markets, pressure on yields due to industry overcapacity and customers selecting less expensive and slower-transit services," CEO Fred Smith, in a prepared statement. "In response, beginning April 1, FedEx Express will decrease capacity to and from Asia and will aggressively manage traffic flows to place low yielding traffic in lower-cost networks."

Smith said the company is "assessing how these actions may allow FedEx Express to retire more of its older, less-efficient aircraft."

Results were also negatively impacted by buyout costs and by fewer operating days during the quarter, FedEx said.

Looking ahead, FedEx projects earnings of $1.90 to $2.10 a share in the fiscal fourth quarter and $6 to $6.20 a share for the full fiscal year. Both figures are below analysts' estimates of $2.07 for the quarter and $6.31 for the full year. The guidance excludes an estimated cost of $450 million to $550 million, or 89 cents to $1.09 a share, for voluntary employee buyout programs, with some additional costs expected in fiscal 2014. FedEx cut its capital spending forecast for fiscal 2013 to $3.6 billion from its previous forecast of $3.9 billion.

"Our lower-than-expected results for the quarter and reduced full-year earnings outlook were driven by third quarter international revenues declining approximately $100 million versus our guidance primarily due to accelerating customer preference for lower-yielding international services, lower rate per pound and weight per shipment," said Chief Financial Officer Alan Graf, in a prepared statement.

"We expect these international revenue trends to continue," Graf said. "We have other actions under way beyond those already included in our profit improvement program. Some of these additional actions may involve temporarily or permanently grounding aircraft, which could result in asset impairment or other charges in future periods."
MEMbrain is offline  
Old 03-20-2013, 02:09 PM
  #2  
Gets Weekends Off
 
HazCan's Avatar
 
Joined APC: Feb 2007
Position: headbanging
Posts: 954
Default

Why is the 777 a bad idea? It's more efficient and can be redeployed into Euro/Domestic markets as needed. It doesn't always have to go 14+ hours.
HazCan is offline  
Old 03-20-2013, 02:49 PM
  #3  
Gets Weekends Off
 
MacGuy2's Avatar
 
Joined APC: Jun 2007
Position: Couch Potato
Posts: 470
Default

Smith said the company is "assessing how these actions may allow FedEx Express to retire more of its older, less-efficient aircraft."

Would you call a 777 an "older, less-efficient aircraft?"

MG2
MacGuy2 is offline  
Old 03-20-2013, 03:22 PM
  #4  
Gets Weekends Off
 
trashhauler's Avatar
 
Joined APC: Jul 2006
Position: B-777
Posts: 455
Default

Looks like the 727 maybe leaving a little earlier then planned?
trashhauler is offline  
Old 03-20-2013, 03:30 PM
  #5  
Gets Weekends Off
 
Gunter's Avatar
 
Joined APC: Aug 2006
Posts: 3,931
Default

When the lift is needed, aircraft retirements are delayed.

When a slowdown occurs and seats in newer aircraft are well staffed, retirement plans are finally executed or accelerated.

So while I don't think the sky is falling, the 727 may actually be going away this time.

We all know some MD-10s are on the chopping block, as are some A310s. We'll see about that.
Gunter is offline  
Old 03-20-2013, 03:43 PM
  #6  
Gets Weekends Off
 
DiamondZ's Avatar
 
Joined APC: Feb 2005
Posts: 489
Default

727 parked in July
DiamondZ is offline  
Old 03-20-2013, 03:57 PM
  #7  
Line Holder
 
Joined APC: Aug 2006
Position: Between a rock and a hard place
Posts: 92
Default

Expect a 727 excess bid to retire the airplane in the near future.....? Should make the 767 bid even more interesting.
XprsFr8r is offline  
Old 03-20-2013, 04:00 PM
  #8  
Gets Weekends Off
 
JetJocF14's Avatar
 
Joined APC: Sep 2006
Position: B-777 Captain
Posts: 943
Default

Big trip tonight. All the way out to OAK, layover 24, then fly back. Whew intense.
JetJocF14 is offline  
Old 03-20-2013, 04:05 PM
  #9  
Part Time Employee
 
MaxKts's Avatar
 
Joined APC: Jul 2006
Position: Dispersing Green House Gasses on a Global Basis
Posts: 1,918
Default

Originally Posted by JetJocF14 View Post
Big trip tonight. All the way out to OAK, layover 24, then fly back. Whew intense.
Yeah and I bet you didn't have an RFO
MaxKts is offline  
Old 03-20-2013, 04:07 PM
  #10  
Gets Weekends Off
 
Joined APC: Jul 2007
Posts: 270
Default

Originally Posted by DiamondZ View Post
727 parked in July
I've heard that and believe it to be true, but then why did they just announce another 727 SIBA bid?
1st overnite is offline  
Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
CAL EWR
United
67
11-25-2012 03:46 PM
Kayco
United
38
11-13-2012 02:18 PM
Bill Lumberg
Major
71
06-02-2012 07:28 AM
Lambo
Cargo
5
07-12-2007 04:55 PM
vagabond
Cargo
15
03-18-2007 03:50 PM

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Thread Tools
Search this Thread
Your Privacy Choices