AeroLogic (Leipzig/Halle) on October 26 will add a new weekly cargo route from Frankfurt to Hong Kong via Ashgabat. The return flight will operate nonstop per Airline Route.
The company was established as a joint venture by Deutsche Lufthansa AG and Deutsche Post Beteiligungen Holding AG. The respective companies of the shareholders entrusted Lufthansa Cargo and DHL Express with the operational responsibility.
AeroLogic has its own Air Operator Certificate (AOC), its own traffic rights, and is responsible for all airline operations including aircraft, pilots and network.
The route network includes more than 20 destinations in Europe, in the Middle East, in Asia and North America. During the week, AeroLogic mainly flies to Asia within the express network of DHL Express, and on the weekend to the USA within the network of Lufthansa Cargo respectively.
Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 777-FZN D-AALC (msn 36003) taxies at Paine Field in Everett.
FedEx Corporation (FedEx Express) (Memphis) reported its earnings for its fiscal first quarter surged by 24 percent to net income of $606 million. The corporation issued this financial report:
FedEx Corporation today reported earnings of $2.10 per diluted share for the first quarter ended August 31, up 37% from last year’s $1.53 per share.
First Quarter Results
FedEx Corp. reported the following consolidated results for the first quarter:
• Revenue of $11.7 billion, up 6% from $11.0 billion the previous year
• Operating income of $987 million, up 24% from $795 million last year
• Operating margin of 8.5%, up from 7.2% the previous year
• Net income of $606 million, up 24% from last year’s $489 million
Operating income increased primarily due to higher volumes and increased yields at all three transportation segments. Results in the first quarter also include benefits from lower pension expense and the company’s profit improvement programs. These benefits were partially offset by higher aircraft maintenance expense due to the timing of certain engine maintenance events.
During the quarter, the company acquired 5.3 million shares of FedEx common stock. As of August 31, 2014, no shares remained under the existing share repurchase authorizations. Share repurchases benefited earnings in the quarter by $0.15 per diluted share.
FedEx reaffirmed its fiscal 2015 earnings forecast of $8.50 to $9.00 per diluted share. The outlook assumes no net year-over-year fuel impact and continued moderate economic growth. The capital spending forecast for fiscal 2015 remains $4.2 billion.
“FedEx reported strong first quarter results, as all three of our transportation segments drove higher revenues and improved profitability year over year,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Our profit improvement programs are progressing as planned and we continue to expect strong earnings growth this year.”
2015 Rate Increases
As previously announced, FedEx Express, FedEx Ground and FedEx Freight will increase shipping rates effective January 5, 2015.
FedEx Express will increase shipping rates by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services.
FedEx Ground and FedEx Home Delivery will increase shipping rates by an average of 4.9%. In addition, as announced in May, FedEx Ground will also begin applying dimensional weight pricing to all shipments.
FedEx Freight will increase shipping rates by an average of 4.9%. This rate change applies to eligible FedEx Freight shipments within the U.S. (including Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands), between the contiguous U.S. and Canada, within Canada, between the contiguous U.S. and Mexico, and within Mexico.
Details of all changes to rates and surcharges are available at fedex.com/us/2015rates.
Corporate Headquarters Costs
Effective this fiscal year, the company ceased allocating to its transportation segments the costs associated with the corporate headquarters division. These costs are now included in “Corporate, eliminations and other.” Prior year amounts in this release have been revised to conform to the current presentation.
FedEx Express Segment
For the first quarter, the FedEx Express segment reported:
• Revenue of $6.86 billion, up 4% from last year’s $6.61 billion
• Operating income of $369 million, up 35% from $273 million a year ago
• Operating margin of 5.4%, up from 4.1% the previous year
Revenue increased due to higher U.S. domestic package volume and international export package yields partially offset by lower freight revenue. U.S. domestic package volume grew 5%, as 8% growth in overnight and deferred box volume was partially offset by lower envelope volume. U.S. domestic yield increased 1% from higher fuel surcharges, changes in service mix and increased rates. FedEx International Priority® volume grew 1%, while FedEx International Economy® volume increased 3%. International export revenue per package increased 3% due to fuel surcharges, higher rates and weight per package.
Operating income and margin improved as higher U.S. domestic package volume, improved international export yield and benefits from profit improvement programs more than offset higher aircraft maintenance expense and lower freight revenues.
Copyright Photo: Steve Bailey/AirlinersGallery.com. Boeing 777-FHT N883FD (msn 39285) of FedEx Express climbs away from the runway at Anchorage Ted Stevens International Airport (ANC).
Qatar Airways Cargo (Qatar Airways) (Doha) is set to continue its expansion with the launch of two new freighter destinations, Brussels in Belgium and Shanghai in China.
Brussels will be served four times weekly by the Airbus A330F freighter, effective on October 1. The freighter will fly via Entebbe to Brussels on Wednesdays and Sundays and via Nairobi to Brussels on Mondays and Fridays.
A three-times weekly nonstop Boeing 777 freighter service will operate on the Doha-Shanghai-Doha route, effective October 2.
In addition, with effect from October 1, an additional Boeing 777 freighter frequency will be added on the Doha – Hong Kong route, bringing up the weekly frequencies to 14.
Qatar Airways Cargo completed the transition from a manually handled cargo environment to a fully automated cargo terminal at Hamad International Airport when it moved to the new state-of-the-art facility. The brand new cargo terminal at Hamad International Airport offers the very latest technology and five-star service to customers around the globe.
Previously Qatar Airways signed a Letter of Intent for four additional Boeing 777Fs.
Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 777-FDZ A7-BFE (msn 39644) taxies at Paine Field near Everett.
ANA-All Nippon Airways (Tokyo) and Lufthansa Cargo AG (Frankfurt) will launch a strategic air cargo joint venture on routes between Japan and Europe and vice versa. This is the first worldwide cargo joint venture of its kind. ANA has received antitrust immunity, i. e. approval for the joint venture from the Japanese Ministry of Land Infrastructure and Transport after filing for it in the spring of 2014. In addition, the joint venture has been positively assessed by external counsel for compliance with relevant EU antitrust regulations.
Now ANA and Lufthansa Cargo can jointly manage activities covered by the joint venture including network planning, pricing, sales and handling on all routes between Japan and Europe and vice versa. Based on a joint contract which shall be signed in the next weeks, the two carriers aim to introduce the joint approach on shipments originating from Japan to Europe in winter 2014/2015 and for shipments from Europe to Japan mid-2015.
The joint venture will benefit customers by generating a greater selection of routings and a wider range of service options. Customers will especially profit from a larger and faster network with more direct flights, more destinations and more frequencies. By their moving under one roof at major stations, such as the airports Tokyo Narita and Nagoya in Japan and Dusseldorf and Frankfurt in Germany, customers will enjoy the services of both airlines at a single location.
Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. ANA Cargo’s Boeing 767-381F ER JA602F (msn 33509) arrives at bthe Tokyo (Narita) base.
Bottom Copyright Photo: Rob Skinkis/AirlinersGallery.com. Boeing 777-FBT D-ALFC (msn 41676) of Lufthansa Cargo lands at Manchester.
Emirates SkyCargo (Dubai), the freight division of Emirates has added Los Angeles to its network of freighter destinations across the United States, with the start of a weekly service to the city.
Los Angeles recently joined Chicago (O’Hare), Atlanta and Houston (Bush Intercontinental) in Emirates SkyCargo’s US freighter network.
Emirates SkyCargo uses a Boeing 777 Freighter aircraft on the route, which is capable of carrying 103 tonnes of cargo, and with its main deck door being the widest of any freighter aircraft, it’s able to uplift outsized cargo and carry larger consignments. The top exports from Los Angeles are mainly perishables ranging from fresh and frozen fruits and vegetables, chilled and frozen meat and seafood, foodstuffs, as well as personal effects, construction equipment and electrical products, while top imports range from textiles, to perishables, electronics and personal effects.
In 2013, Emirates SkyCargo transported a total of 49 000 tons of cargo from the United States, equalling a 134 tons a day, while it carries more than 940 tons of cargo from the US to various points across the world each week. The top three exports from the US are machinery, construction equipment and electrical products and its three top imports are apparel, foodstuffs and pharmaceuticals.
The LAX flight is routed Dubai – Zaragoza – Mexico City – Los Angeles – Copenhagen – Dubai.
In other news, parent Emirates and Arik Air (Lagos) have signed a Memorandum of Understanding (MOU) to develop and expand their existing commercial relationship and explore further areas of co-operation.
Emirates and Arik Air currently have a one-way interline agreement, whereby Emirates passengers are connected throughout Nigeria and West Africa via Arik Air’s current domestic and regional network.
The MOU was signed by Adnan Kazim, Emirates Divisional Senior Vice President, Planning, Aeropolitical and Industry Affairs, and Chris Ndlulue, Arik Air’s Managing Director, at Emirates Group Headquarters in Dubai.
Emirates and Arik Air will also explore other areas of cooperation for the future, including frequent flier programs, passenger and cargo handling.
Arik Air is the largest airline in Western and Central Africa and has developed and successfully operates an extensive domestic route network in Nigeria, and regionally across Western Africa from its twin hubs in Lagos and Abuja, and to Johannesburg in South Africa and intercontinentally to New York and to London from its Lagos hub.
Emirates operates the world’s largest fleet of Boeing 777 aircraft and Airbus A380s.
Copyright Photo: Paul Denton/AirlinersGallery.com. Boeing 777-1F1H A6-BFI (msn 25609) approaches Dubai.
Emirates SkyCargo, the freight division of Emirates (Dubai), is set to further strengthen trade lanes between Switzerland and its worldwide network with the introduction of a weekly freighter service from Basel to Dubai starting September 21, 2014.
The new freighter flight will supplement the existing belly-hold cargo capacity in the Swiss market provided on Emirates’ double-daily passenger services to Zurich as well as on the daily Geneva flights. Emirates SkyCargo currently offers more than 380 tons of capacity each week on its routes into Switzerland. Basel, the center of the Swiss pharmaceutical and chemical industry will become the 40th European destination to join the Emirates SkyCargo network, giving a further boost to bilateral trade links already in place between the UAE and the region.
Emirates SkyCargo will use a Boeing 777 freighter aircraft on the Basel-Dubai route, which is capable of carrying over 100 tons of cargo, and with its main deck cargo door being one of the widest of any aircraft, enabling it to uplift outsized cargo and carry larger consignments. The Boeing 777F is one of the most modern and technologically advanced freighters available and has the lowest fuel burn of any comparable size aircraft. Popular commodities and goods into and from the region are expected to be pharmaceuticals, chemicals, spare parts and medical devices.
Emirates has continuously built up its presence in Europe since the launch of London-Gatwick services in 1987. Today, Emirates operates passenger and cargo services to 37 European destinations, with Oslo (effective September 22), Brussels (starting September 5) and Budapest (effective October 27) joining soon the airline’s global route network spanning six continents. In addition to the new destinations, Emirates continues to add capacity to many of its European routes through larger aircraft and added frequency.
In addition to belly-hold cargo services on Emirates’ fleet of 225 aircraft to more than 140 destinations around the world, Emirates SkyCargo has a fleet of 13 freighters, comprising of eleven Boeing 777Fs and two Boeing 747-400 ERFs that operate from their base at Dubai World Central’s Al Maktoum International Airport.
The cargo flights will be routed Dubai – Djibouti – Nairobi – Amsterdam – Basel – Dubai.
Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 777-F1H A6-EFG (msn 35613) taxies at Amsterdam.
Boeing (Chicago and Seattle) and Qatar Airways (Doha) have finalized an order for 50 777-9Xs, valued at $18.9 billion at current list prices. The 777X order, first announced as a commitment at the 2013 Dubai Airshow, was part of the largest product launch in commercial jetliner history.
In addition, the airline announced a commitment for 50 additional 777-9X purchase rights. If exercised, that would take Qatar’s 777X order tally to 100 airplanes valued at $37.7 billion at list prices.
Qatar Airways also announced their intent to order four 777 Freighters and options for four more, with a combined value of $2.4 billion at list prices.
The 777X will introduce the latest technologies including the most advanced commercial engine ever – the GE9X by GE Aviation – and an all-new high efficiency composite wing that has a longer span than today’s 777. The 777X family includes the 777-8X and the 777-9X, both designed to respond to market needs and customer preferences.
The 777-9X will be 12 percent more fuel efficient than any competing airplane, necessary in today’s competitive environment. The 777-8X is 5 percent more efficient than its competitor at all ranges while providing for new network opportunities. Design of the 777X is underway and production is set to begin in 2017, with first delivery targeted for 2020. To date, the 777X has accumulated 300 orders and commitments from six customers worldwide.
FedEx Corporation (FedEx Express) (Memphis) reported earnings of $2.46 per diluted share for the fourth quarter ended May 31. Last year’s fourth quarter earnings were $2.13 per diluted share, excluding a $0.98 per diluted share business realignment program charge and a $0.20 per diluted share noncash aircraft impairment charge at FedEx Express. Including last year’s charges, earnings were $0.95 per diluted share.
“An outstanding fourth quarter helped FedEx post solid results for fiscal 2014, and we believe we are well positioned for a strong fiscal 2015,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “I would like to extend my sincere appreciation to the entire FedEx team for their contribution to our results and their continued commitment to providing outstanding service to our customers and connecting people and possibilities around the world.”
For its entire fiscal year the cooperation reported net income (GAAP) of $1.56 billion.
Read the full report: CLICK HERE
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-FS2 N857FD (msn 37728) climbs into the sky at Anchorage International Airport (ANC).
Emirates SkyCargo opens a new cargo center today at Dubai World Central’s (DWC) Al Maktoum International Airport
Emirates SkyCargo (Dubai) starts operations today (May 1) from its new cargo terminal at Dubai World Central’s (DWC) Al Maktoum International Airport.
The official start of operations was marked by the very early morning arrival of an Emirates SkyCargo Boeing 777F Freighter from London (Heathrow), carrying a full load of more than 100 tons of cargo. The load of cargo included vehicles, ship spares, pharmaceuticals, oilfield equipment and an aircraft engine, some of which are for distribution in the U.A.E., while other cargo will be carried onward by Emirates passenger aircraft at Dubai International Airport (DXB) to various markets around Emirates’ network, such as South Africa, China, India and South Korea.
Emirates Media Player
Construction of phase one of the cargo terminal and supporting facilities began in July 2013, and with its completion operations are now in full swing with 250 staff on site. The newly opened terminal is equipped with start-of-the-art technology and will be able to handle 700 000 tons of cargo annually and have 500 staff when phase two, scheduled to be completed by September this year, comes into operation. The terminal has the potential for further expansion to reach 1 million tons.
Emirates SkyCargo currently has a fleet of 12 freighters, 10 Boeing 777Fs and two Boeing 747-400 ERFs, which operate to more than 50 destinations around the world. Cargo arriving on freighters will be transported by dedicated trucking services between DWC and Dubai International Airport along the Emirates Road (E-611) which will be the main corridor for connecting cargo between freighters and the passenger fleet. The current trucking fleet numbers 47, which will be increased relative to future growth requirements.
The newly opened terminal is equipped with state-of-the-art technology. It features a fully automated material handling system which is one of the world’s first to have an automated Quick Dolly Transfer System that enables quick transfer of 6 Unit Load Devices (ULDs) simultaneously. In addition, an automated pallet handling system, advanced storage system, offices, work station areas, modern communication and security systems and many amenities for employees, including canteens have been installed. The perishable area has been designed to handle about 140 000 tons of cargo per annum, featuring three large areas each with different temperature ranges.
The terminal infrastructure also includes 45 truck docks and 80 truck parking spaces, in addition to 12 aircraft stands directly in front of the terminal.
Copyright Photo: Keith Burton/AirlinersGallery.com. Boeing 777-F1H A6-EFJ (msn 35610) arrives at London’s Heathrow Airport (LHR).
Emirates Aircraft Slide Show: CLICK HERE
British Airways to return three GSS Boeing 747-8 freighters to Atlas Air Worldwide Holdings in April
Atlas Air Worldwide Holdings, Inc. (Atlas Air) (New York) has announced it intends to pursue new ACMI (aircraft, crew, maintenance and insurance) placement opportunities for three 747-8 Freighter aircraft currently operated for British Airways plc by Atlas Air Worldwide’s 49%-owned UK subsidiary, Global Supply Systems Limited (GSS).
The action follows notice from British Airways, a unit of International Consolidated Airlines Group, S.A., regarding British Airways’ strategic decision to exit dedicated cargo-freighter service and to return the aircraft to GSS in April 2014 pursuant to the terms of the existing ACMI agreement between the parties.
Effective with the termination of the agreement, the three 747-8Fs will be redelivered to the company by GSS. Through GSS, the company also will receive contractual early termination fees from British Airways.
Meanwhile Qatar Airways (Doha) will operate five Boeing 777F freighter flights between Hong Kong and London for IAG Cargo (British Airways) starting on May 1. IAG Cargo issued this statement:
IAG Cargo has announced it has signed a long-term commercial agreement with Qatar Airways to purchase capacity on Qatar Airways-operated air cargo freighters, effective from May 1, 2014.
Qatar Airways will operate five Boeing 777F flights a week between Hong Kong and London on behalf of IAG Cargo, providing continuity of service for IAG Cargo customers.
The agreement marks a transition for IAG Cargo and follows the company’s decision to transfer freighter operations from its current provider, Global Supply Systems.
IAG Cargo connects 350 destinations worldwide, serving the world’s economic hubs with cargo-friendly wide-bodied planes. Through its Constant Climate network, it has one of the largest networks globally for handling temperature-sensitive air cargo.
Qatar Airways is already a partner with IAG through the oneworld global alliance which it joined in October 2013. The airline is taking delivery of a further three Boeing 777F aircraft during 2014.
Top Copyright Photo: Rainer Bexten/AirlinersGallery.com. This decision will end British Airways World Cargo and Global Supply Systems. GSS operated Boeing 747-87UF G-GSSD (msn 37562) in British Airways World Cargo colors departs graceful from Cologne/Bonn.
Bottom Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 777-FDZ A7-BFA (msn 36098) of Qatar Airways Cargo taxies at Amsterdam.
Atlas Air Worldwide Holdings, Inc. (New York), the parent of Atlas Air (New York), has confirmed completion of previously announced agreements to acquire three Boeing 777 Freighters for its dry-leasing subsidiary, Titan Aviation. The 2011-vintage aircraft were acquired from affiliates of Guggenheim Aviation Partners, LLC and are currently on long-term lease to a European express carrier.
The group now has six Boeing 777s in its fleet.
FedEx misses second quarter Wall Street estimates but still reports net income of $500 million, up 14%
FedEx Corporation (FedEx Express) (Memphis) today reported earnings of $1.57 per diluted share for the second quarter ended November 30, compared to $1.39 per share last year. Last year’s second quarter results were impacted by $0.11 per diluted share due to the effects of Superstorm Sandy.
“FedEx posted solid second-quarter earnings, reflecting improved performance at FedEx Express, as the profit improvement plan introduced more than a year ago continues to gain momentum,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “The power of our broad global portfolio continues to drive our growth and I am confident we are well on our way to achieving the ambitious goals we have set.”
Second Quarter Results
FedEx Corp. reported the following consolidated results for the second quarter:
• Revenue of $11.4 billion, up 3% from $11.1 billion the previous year
• Operating income of $827 million, up 15% from $718 million last year
• Operating margin of 7.3%, up from 6.5% the previous year
• Net income of $500 million, up 14% from last year’s $438 million
Operating income and margin increased primarily due to yield and cost management at FedEx Express. Results also benefited from the favorable comparison to last year’s Sandy-impacted results, lower pension expense and a modest benefit from the voluntary employee severance program.
In October, FedEx Corporation announced the authorization of a new share repurchase program of up to 32 million shares of common stock, which augmented the 7.4 million shares then remaining under the previously authorized repurchase program. During the second quarter, the company repurchased 7.2 million shares of FedEx common stock, increasing the fiscal 2014 year-to-date purchase total to 10.0 million shares. The second quarter share repurchases had no effect on the quarter’s earnings per share, but are expected to improve full year earnings by $0.04 per share.
FedEx is increasing its forecast of full-year earnings per share growth to 8% to 14% above last year’s adjusted results, compared to its previous growth range of 7% to 13%. This outlook reflects share repurchases made to date but does not include any benefit from additional share repurchases. Share repurchases are expected to continue, but the timing will be at the company’s discretion. The outlook also assumes the market outlook for fuel prices and continued moderate economic growth. The capital spending forecast for fiscal 2014 remains $4 billion.
“We remain on track to deliver a solid increase in earnings this fiscal year,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “FedEx Express reported significant year-over-year improvement in earnings during the quarter, aided by continued execution of our profit improvement programs and by ongoing cost reduction initiatives. We continue to look for additional ways to improve efficiencies and remain committed to increasing long-term shareowner value.”
FedEx Express Segment
For the second quarter, the FedEx Express segment reported:
• Revenue of $6.84 billion, down slightly from last year’s $6.86 billion
• Operating income of $326 million, up 42% from $230 million a year ago
• Operating margin of 4.8%, up from 3.4% the previous year
Revenue decreased slightly due to lower express freight revenue and lower fuel surcharges, mostly offset by increased base package yields. U.S. domestic revenue per package increased 2%, as higher rates and weight per package were partially offset by lower fuel surcharges. U.S. domestic average daily package volume decreased slightly.
FedEx International Priority® (IP) revenue per package increased 3% while average daily volume declined 5%. Within the IP category, average daily volume for the lower-yielding distribution services declined while IP average daily volume, excluding these distribution services, increased 1%. FedEx International Economy® average daily volume grew 10%.
Operating income and margin improved year over year due to higher base package yields, lower pension expense, and lower net expenses from ongoing cost reduction activities.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. A beautiful takeoff portrait of FedEx Express’ Boeing 777-FS2 N852FD (msn 37723) after a stop at Anchorage, Alaska (click on the photo for the full-size view).
Video: How FedEx turns a Boeing 757 freighter in 55 minutes:
Video: FedEx has great TV advertisements that have won several marketing awards. Here is the latest for Christmas 2013:
LATAM Airlines Group (LAN Airlines and TAM Linhas Aereas) (Santiago and Sao Paulo) swung to the black in the third quarter with a net profit of $52 million versus a loss of $49 million a year ago for the same period.
Read the full report: CLICK HERE
Read the analysis by Reuters: CLICK HERE
Copyright Photo: Rodrigo Cozzato/AirlinersGallery/com. LAN Cargo’s (LAN Airlines Chile) Boeing 777-F16 N778LA (msn 41518) departs from Viracopos Airport near Sao Paulo.
Lufthansa Cargo takes delivery of its first Boeing 777F freighter, will enter service on November 19 to New York
Lufthansa Cargo (Frankfurt) finally accepted its first Boeing 777F freighter, the pictured 777-FBT D-ALFA (msn 41674) on November 8. D-ALFA arrived at the Frankfurt base the following day. The new freighter will enter revenue cargo service on November 19 with nonstop service to New York (JFK).
Copyright Photo: Lufthansa Cargo.
Video: Behind the scenes at Lufthansa Cargo (in German):
FedEx Corporation (FedEx Express) (Memphis) reported earnings of $1.53 per diluted share for the first quarter ended August 31, compared to $1.45 per share last year.
“Growth in overall demand for our broad global portfolio of solutions drove our improved first quarter results,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “FedEx Express remains focused on reducing costs while facing challenging global economic conditions. Meanwhile, FedEx Ground continues to generate strong profitability on growing customer demand for its services.”
First Quarter Results
FedEx Corp. reported the following consolidated results for the first quarter:
• Revenue of $11.0 billion, up 2% from $10.8 billion the previous year
• Operating income of $795 million, up 7% from $742 million last year
• Operating margin of 7.2%, up from 6.9% the previous year
• Net income of $489 million, up 7% from last year’s $459 million
Revenue and earnings increased during the quarter, driven by solid performance at each of the company’s transportation segments. Results include significant headwinds from the net year-over-year impact from the timing lag that exists between when fuel prices change and indexed fuel surcharges automatically adjust, as well as one fewer operating day.
FedEx reaffirmed its forecast of full-year earnings per share growth of 7% to 13% from last year’s adjusted results. This outlook assumes the market outlook for fuel prices, U.S. GDP growth of 2.1% and world GDP growth of 2.6%. The capital spending forecast for fiscal 2014 remains $4 billion.
“We remain confident in our full year earnings outlook despite tepid global economic growth,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “FedEx Express continued to execute on its profit improvement initiatives during our first quarter. We remain focused and are committed to FedEx Express achieving its $1.6 billion operating profit improvement target by the end of fiscal 2016.”
2014 Rate Increases
FedEx Express will increase shipping rates by an average of 3.9% for U.S. domestic, U.S. export and U.S. import services effective January 6, 2014. The FedEx Ground and FedEx SmartPost pricing changes for 2014 will be announced later this year. FedEx Freight implemented a 4.5% general rate increase on July 1, 2013.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-FS2 N852FD (msn 37723) approaches Anchorage International Airport for landing.
Qatar Airways (Doha) has officially launched the start of its three year partnership with FC Barcelona at an event held at Camp Nou.
The airline’s partnership with FCB took effect from July 1 this year.
In attendance were leading representatives of both organizations, the CEO of Qatar Airways, Akbar Al-Baker, the President of FC Barcelona, Sandro Rosell and Vice President of FC Barcelona Economic and Strategy Area, Javier Faus.
Since its beginnings, FC Barcelona has been characterized by being not just a football organization, but also a powerful force for globalization, solidarity, integration and social cohesion. Qatar Airways fully identifies with these values, which is why this partnership between both organizations is much more than just a simple economic alliance. Furthermore, Qatar Airways’ partnership with FC Barcelona will help to position the airline in the world.
Qatar Airways will work with FC Barcelona to create joint initiatives and will especially focus on connecting with the club’s fans and also with underprivileged children to spread the love of the game to all corners of the globe.
A new FC Barcelona logojet is on the horizon.
Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 777-FDZ A7-BFD (msn 41427) of the cargo division of Qatar Airways taxies at Amsterdam.
LATAM Airlines Group (LAN Airlines and TAM Linhas Aereas) (Santago and Sao Paulo) reported it lost $330 million in the second quarter. The group was created last year with the merger of the two airlines. The group is struggling in Brazil with TAM due to a weakening Brazilian economy. TAM is cutting costs and reducing flights.
Read the full report: CLICK HERE
LATAM Airlines Group Fleet Plans (excerpt from the report):
Top Copyright Photo: Rodrigo Cozzato/AirlinersGallery.com. Sporting new Sharklets, Airbus A320-214 PR-MYY (msn 5591) taxies at the Sao Paulo (Guarulhos) hub.
Bottom Copyright Photo: Alvaro Romero/ModoCharlie.com. Boeing 777-F6N N772LA (msn 37708) arrives at the Santiago hub.
Lufthansa Cargo (Frankfurt) in October will be welcoming its first new Boeing 777F freighter in Frankfurt. The cargo airline is asking for your help in naming the aircraft. The carrier is now conducting a contest to name the plane. According to the airline, “the winner will be present at the test flight of our first Boeing 777F in Frankfurt. Get involved and be creative! Perhaps our fleet will soon bear your name. Name the plane!”
Register here to submit your names: CLICK HERE
Copyright Photo: Lufthansa Cargo.
FedEx Corporation (Memphis) has announced that its FedEx Express (Memphis) subsidiary has entered into a new express air transportation contract with the United States Postal Service. The current contract ends in September 2013, and the new contract will begin in October 2013.
Under this seven-year agreement, valued at approximately $10.5 billion, FedEx Express will provide airport-to-airport transportation of USPS Express Mail and Priority Mail within the United States.
Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 777-FS2 N884FD (msn 37137) gracefully climbs away from the Boeing factory at Paine Field near Everett, Washington.
TNT Express (Hoofddorp), the parent of TNT Airways (Liege), announced today an extensive reorganization plan to go it alone after its takeover by UPS was rejected by the European Commission. The downsizing will result in a loss of 4,000 jobs as it will now concentrate on serving mainly its European routes. The struggling company needs to save approximately $286 million by 2015.
Read the analysis by Reuters: CLICK HERE
Read the official statement by the company: CLICK HERE
Copyright Photo: Ole Simon. Some of the long-range aircraft are likely to be dropped from the fleet with this downsizing. Operated by Southern Air for TNT Airways, Boeing 777-FHT N778SA (msn 39286) prepares to touch down at Dubai International Airport.
Qatar Airways (Doha) is one of the fastest-growing passenger airlines in the world. This year the flag carrier will move into a new and larger Doha International Airport currently under construction. According to this report by The National, Qatar Airways also wants to be the second largest cargo airline in the world.
Read the full report: CLICK HERE
Copyright Photo: Michael Stappen. Boeing 777-FDZ A7-BFB (msn 36100) lands at Amsterdam.
Atlas Air Worldwide Holdings, Inc. (New York) today announced the acquisition of a Boeing 777 Freighter by its dry-leasing subsidiary, Titan Aviation. The aircraft is currently on long-term lease to AeroLogic GmbH (Leipzig), a cargo airline based in Germany and a joint venture of DHL Express and Lufthansa Cargo AG.
“With the purchase of this 777 freighter, we gain entry into an attractive aircraft type consistent with our strategy of investing in new technology that creates superior value for our customers,” said William J. Flynn, President and Chief Executive Officer, Atlas Air Worldwide.
“This deal represents an important part of our plan to grow Titan’s dry-leasing platform through selective investments in aircraft with existing leases that support leading operators in the airfreight industry. While Titan is principally a cargo aircraft dry lessor, its portfolio includes passenger narrow-body aircraft, engines and related equipment. It also provides customers expertise in asset management, passenger-to-freighter conversion, and other technical services.”
Norddeutsche Landesbank Girozentrale (NORD/LB), a leading aircraft financier based in Hanover, Germany, provided financing for the 2010 vintage aircraft.
AeroLogic GmbH was founded in September 2007 with headquarters in Schkeuditz/Leipzig, Germany. The AeroLogic fleet is composed of eight Boeing 777Fs.
Copyright Photo: Nick Dean. AeroLogic’s Boeing 777-FZN D-AALC (msn 36003) is pictured at Everett (Paine Field) prior to its handover.
Boeing (Chicago) has delivered the first 777 built at the increased production rate of 8.3 per month, or 100 airplanes per year. The airplane, a 777 Freighter, was delivered to Korean Air (Seoul).
In the past 32 months, the 777 program has increased its production rate twice. The rate went from five to seven per month in 2011, and now to the all-time high of 8.3 per month.
1,072 777s have been delivered through the end of January and a total of 1,431 have been ordered from 66 customers around the globe.
Copyright Photo: Boeing. Boeing 777-FB5 HL8226 (msn 37640) was handed over to the carrier on February 25.
United Parcel Service Inc (UPS) (UPS Airlines) (Atlanta and Louisville) will drop its bid to acquire TNT Express N.V. (Hoofddorp) because it now expects the European Commission (EC) to deny the acquisition.
On March 19, 2012, UPS announced its intention to acquire TNT Express for $6.7 billion. On September 5, 2012, UPS announced it expected to close the deal in early 2013 subject to EC approval.
UPS will pay TNT a termination fee in the amount of EUR 200 million.
TNT Airways (Liege) is a subsidiary of TNT Express. TNT is now expected to remain independent.
UPS issued the following statement:
United Parcel Service, Inc. announced today (January 14) the European Commission (EC) has informed UPS and TNT Express that it is working on a decision to prohibit the proposed acquisition of TNT Express.
UPS submitted an initial remedies proposal on November 29, 2012 and subsequently revised the proposal twice. UPS began the competitive review process with the EC in March 2012.
Scott Davis, UPS Chairman and CEO said, “We are extremely disappointed with the EC’s position. We proposed significant and tangible remedies designed to address the EC’s concerns with the transaction. The combined company would have been transformative for the logistics industry, bringing meaningful benefits to consumers and customers around the world, while supporting growth in Europe in particular.”
Upon prohibition by the EC, the Offer Condition relating to EU Competition Clearance will not be fulfilled and UPS will pay TNT a termination fee in the amount of EUR 200 million and will withdraw the Offer.
Further announcements will be made once the European Commission has issued its formal decision. The decision is expected to be adopted formally in the coming weeks.
Top Copyright Photo: Michael B. Ing. Boeing 747-44AF N572UP (msn 35669) climbs away from Anchorage International Airport (ANC).
Bottom Copyright Photo: Rainer Bexten. Southern Air’s Boeing 777-FHT N778SA (msn 39286) arrives at the Liege, Belgium sorting facility.
FedEx’s 2Q net income slips to $438 million, down 12% from last year’s $497 million, orders four Boeing 767-300 freighters
FedEx Corporation (FedEx Express) (Memphis) today reported earnings of $1.39 per diluted share for the second quarter ended November 30, compared to $1.57 per share last year. Superstorm Sandy impacted the quarter’s results by $0.11 per diluted share due to reduced shipment volumes and incremental operating costs.
Second Quarter Results:
FedEx Corp. reported the following consolidated results for the second quarter:
• Revenue of $11.1 billion, up 5% from $10.6 billion the previous year
• Operating income of $718 million, down 8% from $780 million last year
• Operating margin of 6.5%, down from 7.4% the previous year
• Net income of $438 million, down 12% from last year’s $497 million
The results of the quarter also reflect, primarily at FedEx Express, the net year-over-year negative impact from the timing lag that exists between when fuel prices change and indexed fuel surcharges automatically adjust.
FedEx Express Segment:
For the second quarter, the FedEx Express segment reported:
• Revenue of $6.86 billion, up 4% from last year’s $6.58 billion
• Operating income of $230 million, down 33% from $342 million a year ago
• Operating margin of 3.4%, down from 5.2% the previous year
Revenue increased primarily due to this year’s business acquisitions and growth at FedEx Trade Networks, as core express revenue growth was constrained by global economic conditions and the impact of Superstorm Sandy.
U.S. domestic revenue per package grew 1% as higher rate per pound was partially offset by lower fuel surcharges. U.S. domestic average daily package volume declined 2%. FedEx international export average daily package volume grew 6% driven by increases in FedEx International Economy®(IE) from Europe and Asia and by increases in FedEx International Priority® (IP) from Asia. Higher growth in international deferred services continued, with IE volume growing 14%, while IP volume increased 3% during the quarter. International export revenue per package fell 4% due to the demand shift toward lower-yielding international services and lower fuel surcharges.
Operating income and margin were lower due to the demand shift toward lower-yielding international services, the negative year-over-year impact of net fuel changes, increased depreciation expense, the effects of Superstorm Sandy and higher pension costs. These were partially offset by the favorable impact of cost containment actions.
FedEx Express has entered into an agreement to purchase four additional 767-300 freighters as part of the company’s continued fleet modernization efforts. This brings the total 767-300 orders to 50, with deliveries beginning in fiscal 2014. In concert with this commitment, two 777 freighter deliveries were deferred from fiscal 2015 to fiscal 2016 in order to better match capacity timing to global demand.
Copyright Photo: Brian McDonough. Boeing 777-FS2 N853FD (msn 37724) makes a fuel stop at Anchorage.
FedEx Corporation (FedEx Express) (Memphis) reported earnings of $1.45 per diluted share for the fiscal first quarter ended August 31, compared to $1.46 per share last year.
FedEx Corporation reported the following consolidated results for the first quarter:
• Revenue of $10.79 billion, up 3% from $10.52 billion the previous year
• Operating income of $742 million, up 1% from $737 million last year
• Operating margin of 6.9%, down from 7.0% the previous year
• Net income of $459 million, down 1% from last year’s $464 million
During the quarter, improved FedEx Freight results and the continued strong performance at FedEx Ground were more than offset by lower demand for priority services at FedEx Express.
Copyright Photo: Nick Dean.
Emirates SkyCargo, the freight division of Emirates Airline (Dubai), commenced a new freighter service from Dubai to Japan and Korea on September 7.
The new service will operate one flight per week and serve the growing demand for air freight to and from Kansai International Airport and Seoul Incheon International Airport. Flight EK 9891 – using a Boeing 777F freighter with a cargo capacity of more than 100 tons – will depart Dubai every Thursday at 22:30 and arrive at Kansai at 12:40 the following Friday, and depart Kansai at 14:40 and arrive at Inchon at 16:10 same day.
Flight EK 9892 from Incheon to Dubai will depart from Incheon at 18:15 every Friday and arrive at Dubai at 22:45 on the same day.
Copyright Photo: Andi Hiltl. Boeing 777-F1H A6-AFG (msn 35613) climbs away from the runway at Zurich.
FedEx Corporation (FedEx Express) (Memphis) announced today that it has completed the acquisition of TATEX, a leading French business-to-business express transportation company. This transaction represents the latest step in the company’s strategy to sustainably grow in Europe.
The addition of the TATEX business to the FedEx network will deliver an excellent extension to the service portfolio of both companies and will provide customers with more comprehensive international and domestic service options. The acquisition will give FedEx access to a nationwide domestic ground network which carries 19 million shipments and produces approximately EUR 150 million in revenues annually. In return, TATEX customers will gain direct access to the global FedEx network.
FedEx has been steadily broadening its European network and today’s announcement follows the recent acquisition of Opek, a Polish courier company with 1,200 employees and a network of 44 stations. In fiscal year 2012, FedEx opened 38 new stations across Europe, launched five Boeing 757-200 freighter flights on intra-European routes, and another Boeing 777F freighter (pictured) for long-haul routes—bringing the total number of Boeing 777Fs operating FedEx routes in and out of Europe to four.
FedEx entered the French market in 1985. Since then the company has been continuously expanding its range of international shipping services in the market and today employs over 3,000 team members in the country. In 2009, the company expanded its EMEA hub at Paris’ Roissy Charles de Gaulle airport, making it the biggest FedEx Express hub outside the U.S.
Copyright Photo: Nick Dean. The pictured brand new Boeing 777-FS2 N864FD (msn 37735) at Everett (Payne Field) joined the FedEx fleet on May 15, 2012.
FedEx Express plans to acquire 19 additional Boeing 767-300F freighters and convert four 777 freighters
FedEx Express, a wholly owned subsidiary of FedEx Corporation (Memphis), today (June 29) agreed to purchase 19 additional Boeing 767-300F freighters from The Boeing Company to continue to improve the efficiency and technology of the FedEx air fleet.
As part of the agreement, Boeing has agreed to convert four Boeing 777 freighters — two in fiscal 2016 and two in fiscal 2017 — to 767 equivalent purchase value. FedEx Express currently operates 19 long-range 777 freighters and now is committed to purchase an additional 24 777s.
The 19 767s will be delivered from fiscal 2015 to 2019 and replace current McDonnell Douglas MD-10Fs and A310-200 freighters. The impact to capital spending in fiscal 2013 and fiscal 2014 is immaterial, and estimated fiscal 2013 capital spending remains at $3.9 billion. The 767s are substantially more fuel efficient and reliable than the aircraft they will replace.
The 767s will provide similar capacity as the MD-10s, with an approximate 30 percent increase in fuel efficiency and a reduction in unit operating costs of more than 20 percent. They also increase efficiency by sharing spare parts, tooling and flight simulators with the Boeing 757-200s which are part of the FedEx air fleet.
Today’s action is in addition to a FedEx Express agreement with Boeing announced in December 2011 to purchase 27 new 767s for delivery between fiscal 2014 and 2018 and delay delivery of a number of 777s.
In June, FedEx announced the permanent retirement from service of 18 Airbus A310 aircraft and 26 related engines, as well as six McDonnell Douglas MD-10 aircraft and 17 related engines, bringing the total to 50 aircraft to be retired by the end of fiscal 2013.
FedEx Express Boeing 777-FS2 N884FD (msn 37137) PAE (Nick Dean) (new delivery), originally uploaded by Airliners Gallery.
Boeing (Chicago, Seattle, Wichita and Charleston) is celebrating the second anniversary of the Boeing 777 freighter in service.
The growing fleet of 777 freighters has flown approximately 120,000 hours and boasts a daily utilization rate of 11.34 hours. Fleet schedule reliability is at 99.37 percent, which means the freighter has a near-perfect record of on-time takeoff and landings. Eighty-three have been ordered, and 39 freighters now are in service with nine airlines.
FedEx Express is the largest 777 freighter operator with a fleet of 11 currently in operation, and another airplane just delivered. An additional 13 777 freighters remain in Boeing’s backlog for FedEx.
Copyright Photo: Nick Dean. Please click on the photo for additional information.
TNT Airways (Liege) will lease three new long-range Boeing 777F freighters from Guggenheim Aviation Partners. The new type is expected to enter service in July 2011.
Copyright Photo: Michael B. Ing. TNT Airways currently operates four Boeing 747-400F freighters.
FedEx Express Boeing 777-FS2 N851FD (msn 37722) PAE (Nick Dean), originally uploaded by Airliners Gallery.
FedEx Express (Memphis) has ordered two more Boeing 777F freighters.
Copyright Photo: Nick Dean. Departing in the early morning misty light at Everett (Paine Field) is new Boeing 777-FS2 N851FD (msn 37722).
China Southern Airlines Cargo Boeing 777-F1B B-2072 (msn 37310) PAE (Nick Dean), originally uploaded by Airliners Gallery.
China Southern Airlines (Guangzhou) reported a first half profit of $30.5 million.
Read the full report in the WSJ:
Copyright Photo: Nick Dean. Boeing 777-F1B B-2072 (msn 37310) climbs away from Everett (Paine Field).
LAN Airlines Cargo (Chile) Boeing 777-F6N N772LA (msn 37708) AMS (Ton Jochems), originally uploaded by Airliners Gallery.
LAN Airlines (Chile) (Santiago) reported net income of $60.6 million (US) for the second quarter compared to $4.2 million in the same period in 2009.
As previously reported, In July 2010, LAN signed a memorandum of understanding (MOU) for the purchase of 50 Airbus A320 family aircraft to be delivered between 2012 and 2016. The new aircraft will operate regional and domestic flights within Latin America.
LAN also signed an agreement in July with Boeing to adjust the delivery of 2 Boeing 787-8 Dreamliner aircraft to 2012. This modification to LAN’s fleet plan will allow the company to receive a total of 5 Boeing 787-8 Dreamliner aircraft in 2012. This is in addition to the anticipated delivery of 10 Boeing 787-8 Dreamliner already announced in March 2010. As a result, LAN will be the first airline in the western hemisphere to take delivery of this new and modern aircraft.
Copyright Photo: Ton Jochems. This beautiful composure showcases LAN Cargo’s Boeing 777-F6N N772LA (msn 37708) taxiing at Amsterdam.
China Eastern Airlines (Shanghai) and its wholly-owned subsidiary Shanghai Airlines (Shanghai) are now pushing for consolidation of their cargo subsidiaries according to this published report.
China Eastern’s China Cargo Airlines and Shanghai Airlines’ Shanghai Cargo Airlines would be merged if parent China Eastern can reach agreement with some of the external stockholders of both subsidiaries. China Eastern needs to consult with those shareholders to agree on any restructuring.
Read the full report:
Copyright Photo: Nick Dean. China Cargo Airlines’ brand new Boeing 777-F6N B-2077 (msn 37713) departs from Everett (Paine Field).
Boeing (Chicago, Seattle, Wichita and Charleston) has delivered two 777F freighters to Southern Air (2nd) (Southern Air Holdings, Inc.), the first 777s to join the Norwalk, Conn.-based cargo carrier’s fleet.
The addition of these two airplanes makes Southern Air (Anchorage) the world’s first aircraft, crew, maintenance and insurance (ACMI) operator to feature the 777F freighter.
Southern Air has entered into an agreement to operate the two 777F freighters on behalf of Thai Airways International (Bangkok). Thai Airways will utilize the full capacity of the 777F freighters, becoming the first carrier in Southeast Asia to offer this capability to its freight customers.
Southern Air is a portfolio company of Oak Hill Capital Partners. In addition to the new Boeing 777 Freighters, Southern Air operates a fleet of 16 Boeing 747 Freighter airplanes.
Copyright Photo: SteelDreams. The second Boeing 777-FZB N775SA (msn 37987) is pictured at Everett in the new “generic” color scheme featuring Thai’s web address. N775SA was handed over on March 3 and joins the previously delivered N774SA.
Southern Air (2nd) (Anchorage) on February 17 took delivery of its first modern Boeing 777F freighter. Boeing 777-FZB N774SA (msn 37986) was accepted in a white condition. The freighter flew to Victorville, CA for painting in this somewhat generic 2010 livery with Thai’s web address. Southern Air is the world’s first ACMI operator of the 777F.
Thai Airways International (Bangkok) has entered into a block space agreement with Southern Air to utilize the full capacity of the first two 777Fs. Thai Cargo and Southern Air will officially announce the freighter operation in March at Thai Cargo’s facility at the Suvarnabhumi International Airport in Bangkok.
The second 777-FZB (N775SA, msn 37987) is also fully painted at Everett (Paine Field) and will be delivered on March 2.
Copyright Photo: Steve N. N774SA is pictured at the ANC base.