FedEx, UPS to Retire MD-11 Freighters
The two largest remaining users of the MD-11 freighter, FedEx and UPS have both announced plans to retire their 20+-year-old trijet fleets.
The two largest remaining users of the MD-11 freighter, FedEx and UPS have both announced plans to retire their 20+-year-old trijet fleets.
DALLAS — The two largest remaining users of the McDonnell Douglas MD-11 freighter, pioneers in the express package delivery industry FedEx (FX) and UPS (5X), have both announced plans to retire their 20+-year-old trijet fleets. The MD-11s are referred to as Mega-Dogs by some flight deck crew in the US.
94 MD-11s are used by FX and 5X. While the latter started retiring its first MD-11 in January of this year, FX, which was the factory-built MD-11's launch client, has announced plans to phase out the trijet as part of an extensive cost-saving and modernization drive.
FedEx President and Chief Operating Officer Raj Subramaniam stated that restructuring the fleet is a key component of this modernization drive during the company's fiscal 2023 third quarter financial results meeting. "This requires many steps, including plans currently being developed to phase out our fleet of MD-11s. Our aircraft modernization program and use of Boeing 777s and Boeing 767s affords us the ability to flex our plans,” he continued.
According to Subramaniam, the choice also shows a less optimistic market outlook. "Our fleet modernization strategy that we’ve been underway has allowed us to build a more agile and flexible fleet. And so, we come to a fork in the road here, are we going to see a high-demand environment or a low-demand environment? And the MD-11 was that flex fleet. And as we now look at the demand environment, we don’t see that high demand coming through.”
54 MD-11s are currently in use by FedEx. They will be replaced by a mix of Boeing 767-300F and 777F aircraft, of which the carrier has 27 and eight on order, respectively. With 125 presently in use and 27 more on order, the Boeing 767 will soon become the single largest fleet type for FedEx. The 53-strong Triple Seven freighter fleet is expected to grow to 61 aircraft by 2025.
The first six trijets from the initial batch—which UPS accepted in 2001—will be retired this year, and there are currently 40 still in operation. As cargo loads decrease, FedEx is also cutting expenses and replacing the older planes with more fuel-efficient Boeing 767-300Fs. The operator now runs 80 Boeing 767s and has 27 more on order between now and 2025, albeit this caused its operating profit for the fourth quarter of 2022 to drop by 3.3%.
With 15 aircraft, Florida-based Western Global Airlines (KD) is the third-largest MD-11 operator behind FedEx and UPS, with 10 of those possibly being in storage at various locations.
When passenger flights were halted due to the COVID-19 pandemic, there was less room in the belly hold for cargo, which led to a surge in demand for the industry. Airbus and Boeing have introduced the A350F and Boeing 777-8F, respectively, to capitalize on the robust freight market. Yet lately, the need for cargo has decreased.
In January, the International Air Transport Association (IATA) published the results regarding air cargo demand for November 2022 and its outlook for 2023.
According to IATA, the demand in air cargo markets had softened as economic headwinds persist. Measured in cargo tonne-kilometers (CTKs), the global demand fell a considerable 13.7% compared to November 2021 and 14.2% if we only consider international operations.
Additionally, capacity was 1.9% below November 2021, being 2022 the second year-on-year in contraction since the start of the pandemic. Compared to pre-COVID-19, however, there was a 10.1% contraction in overall demand, though this one is smaller compared to post-pandemic years.
This year, the freight sector had a sluggish start with demand down 14.9% year over year in January and capacity up 3.9%, according to IATA.
https://airwaysmag.com/air-cargo-demand-softens/
Aviationweek.com cites the head of IATA, Director General Willie Walsh saying there are still reasons for cautious optimism, adding that "2023 began under some challenging business conditions. That was accompanied by persistent uncertainties, including the war in Ukraine, inflation, and labor shortages"
“But there is solid ground for some cautious optimism about air cargo yields remaining higher than pre-pandemic. And China’s much faster-than-expected shift from its zero-COVID policy is stabilizing production conditions in air cargo’s largest source market. That will give a much-needed demand boost as companies increase their engagement with China.”
In November 2022, Boeing stated that it anticipated that demand for freighters would remain strong even as the air cargo market returned to normal after COVID-19, with demand for nearly 2,800 freighters anticipated between 2021 and 2041, with the Asia-Pacific region and the e-commerce industry driving demand in particular.
Featured image: FedEx MD11. Photo: Chris Goulet/Airways
https://airwaysmag.com/product/april-2015/
