FedEx says reducing aircraft investment

[Gumbydammit]

FedEx to nearly double ground volume capacity;
capital investments in aircraft 'should be reduced'

Oct. 2, 2002--FedEx Corp. said it will nearly double its daily package volume capacity by the end of fiscal year 2009, adding 10 distribution hubs while expanding throughout the company's system. The expansion will cost the company about $1.8 billion.

Memphis, Tenn.-based FedEx said the recent explosive growth in FedEx Ground operating unit--a 50-percent increase in business during the past three years--and anticipated future demand allowed the company to undertake the expansion.

"Customer demand remains strong for our ground service and research clearly shows that customers are increasingly satisfied with the value it brings to their businesses," said Michael Glenn, FedEx's executive vice president.

FedEx will open new hubs in Memphis, Dallas, Cincinnati and Hagerstown, Md., over the next four years. Between 2006 and May 31, 2009, FedEx will add six more hubs, which will be "strategically located."

In addition to the hub additions, FedEx plans to expand or relocate more than 300 local delivery facilities. FedEx Ground CEO Daniel J. Sullivan said the expansion will enhance the company's competitive advantage "by providing customers with more information faster while enhancing the productivity and efficiency of our sorting operations.

FedEx said capital investments in other operating companies will be "dictated by growth opportunities," and that capital investments for additional aircraft "should be reduced for the remainder of the decade while investments will continue in the company's operating infrastructure and information systems."

The company pointed out that it has made "substantial investments" in its FedEx Express unit during the past decade, and now its air/ground network is essentially complete and prepared to handle growth.

**Anybody know what this will mean for future growth/need for pilots?
...doesn't sound too good to me...

 

[profile]

This is nothing new, the reduction was off of the very rapid growth of a few years ago, not off current projections. We still anticipate a lot of hiring in the next few years, although attrition will probably account for a larger share of it, as opposed to just pure growth in previous years. All the hiring this past year was after the "reduction" was in place, it just changes the numbers for those that track the stock. Essentially, the company is telling them not to use the previous years investment dollars to guage future expenses.

 

[Gumbydammit]

Thanks, profile...
Any idea how the DC-10 to MD-10 conversion will affect hiring and when? Less crews required can only mean fewer jobs...not that I'm dying to be a FE!
Also, I heard the Greensboro hub could be a MD-11 base in a few years kind of like LAX on the west coast...any truth?

 

[profile]

As has been said multiple times, the net increase in airframes from the MD-10 program will result in more hiring, not less, over the near term.

I imagine the MD-11 will operate into GSO, I doubt it will ever be a crew base.