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I feel with all the payments and aircraft orders FDX has, Fred is going to under Bid and lose money on the contract to keep it. It still is logical to do with the orders of new airplanes arriving. Better to keep them flying and lose some money then have them sit and lose big money
You are assuming the airplanes will be leased and that cash flow without the contract can't handle the lease payments. You are using a pax carrier business model in this situation.Originally Posted by Commando
I feel with all the payments and aircraft orders FDX has, Fred is going to under Bid and lose money on the contract to keep it. It still is logical to do with the orders of new airplanes arriving. Better to keep them flying and lose some money then have them sit and lose big money
When an airplane sits FedEx hires fewer pilots, the planes don't get used up and the part timers don't get extra hours. I don't think operating them at a loss is a likely scenario.