FedEx, Looking to Expand Air Business, Buys 50 Textron Planes
November 28 2017 - 7:25AM
Dow Jones News
By Cara Lombardo
FedEx Corp.'s (FDX) shipping business could buy up to 100 planes
from Textron Aviation, Inc., a unit of Textron Inc. (TXT), as part
of the carrier's plan to expand its air freight business.
FedEx Express, which ships freight and packages in the U.S. and
abroad, has agreed to purchase 50 Cessna SkyCourier aircraft from
Textron with the option to buy up to 50 more, the company said
Tuesday. The planes have a base price of $5.5 million a piece,
making the initial order of 50 planes worth at least $275
million.
The new aircraft will help FedEx Express expand its feeder
fleet, a group of 300 cargo planes that serve smaller markets in 45
countries. FedEx has used Textron's platforms in its feeder fleet
for more than 30 years, Textron said.
FedEx Express Chief Executive David Cunningham said the new
aircraft will improve fuel efficiency, reliability and operating
costs.
"We worked closely with Textron Aviation to develop the Cessna
SkyCourier 408, which includes several key features that will help
us grow our business in small and medium-sized markets, especially
in the air freight segment," Mr. Cunningham said.
Among those features are more powerful engines and larger cargo
doors to support containers and pallets.
FedEx's investment comes as the airfreight market has picked up
in recent months after a prolonged downturn. Air-cargo growth in
September, the last month for which figures are available, grew
above 5% year-over-year for the 13th consecutive month, according
to tracking firm WorldACD.
FedEx earlier this month said would also add up to 50 ATR planes
to its feeder fleet. ATR is a joint venture between Airbus SE and
Italy's Leonardo SpA.
The first Cessna plane will be delivered in 2020 and Textron
will continue delivering one aircraft per month for about four
years, FedEx said.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
November 28, 2017 07:10 ET (12:10 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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