FedEx CEO says he expects the economy to enter a โ€˜worldwide recessionโ€™

From MSNBC:

  • “FedEx CEO Raj Subramaniam told CNBC’s Jim Cramer on Thursday that he believes a recession is impending for the global economy.
  • The CEO’s pessimism came after FedEx missed estimates on revenue and earnings in its first quarter. The company also withdrew its full year guidance.”

Watch the interview:

FedEx Corporation issued this financial statement:

FedEx Corporation has provided a business update and announced the following preliminary unaudited consolidated results for the quarter ended August 31, 2022 (adjusted measures exclude the items listed below for the applicable fiscal year):

 

Fiscal 2023 Fiscal 2022
As Reported (GAAP) Adjusted
(non-GAAP)		 As Reported (GAAP) Adjusted
(non-GAAP)
Revenue $23.2 billion $23.2 billion $22.0 billion $22.0 billion
Operating income $1.19 billion $1.23 billion $1.40 billion $1.49 billion
Diluted EPS $3.33 $3.44 $4.09 $4.37

 

This yearโ€™s and last yearโ€™s quarterly consolidated results have been adjusted for:

 

Impact per diluted share Fiscalโ€ฏ2023 Fiscalโ€ฏ2022
Business optimization costs $0.07 $ โ€”
Business realignment costs 0.04 0.19
TNT Express integration expenses โ€” 0.08

First quarter results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter. FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts. FedEx Ground revenue was approximately $300 million below company forecasts.

While the company took immediate and decisive action to adjust its cost base, the impact of cost actions lagged volume declines, and operating expenses remained high relative to demand. Please see the tables below for preliminary results for each transportation segment.

โ€œGlobal volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations,โ€ said Raj Subramaniam, FedEx Corporation president and chief executive officer. โ€œWhile this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I remain confident in achieving our fiscal year 2025 financial targets.โ€

Cost Initiatives

 

The company expects the benefits of cost actions to mitigate the effects of reduced demand throughout the remainder of fiscal 2023. These cost actions include:

 

  • Reduction in flight frequencies and temporarily parking aircraft;
  • Volume-related reductions in labor hours and other linehaul expenses;
  • Consolidation of certain sort operations to drive productivity;
  • Reduction of Sunday operations at a number of FedEx Ground locations;
  • Cancellation of certain planned network capacity and other projects;
  • Deferral of staff hiring;
  • Closure of over 90 FedEx Office locations; and
  • Identification of five corporate office facilities to be closed, with additional real estate rationalization planning under way.

Outlook

 

  • As a result of the preliminary first quarter financial performance and expectations for a continued volatile operating environment, FedEx is withdrawing its fiscal year 2023 earnings forecast provided on June 23, 2022.
  • While continuing aggressive cost reduction actions, the company expects business conditions to further weaken in the second quarter. For the second quarter of fiscal 2023, FedEx is currently expecting revenue of $23.5 billion to $24.0 billion, earnings per diluted share of $2.65 or greater, and earnings per diluted share excluding costs related to business optimization initiatives and business realignment activities of $2.75 or greater.
  • Anticipated capital spending for fiscal year 2023 has been revised to $6.3 billion, compared to the prior forecast of $6.8 billion.
  • The company reaffirms its previously announced plan to repurchase $1.5 billion of FedEx common stock in fiscal 2023. The company expects to repurchase $1.0 billion of FedEx common stock during the second quarter.

Photo: FedEx Express’ Memphis (MEM) cargo hub.

These forecasts assume the companyโ€™s current economic forecast and fuel price expectations, no additional COVID-19-related business restrictions, successful completion of the planned stock repurchases during the second quarter, and no additional adverse geopolitical developments. FedExโ€™s earnings per share forecast is based on current law and related regulations and guidance.

FedEx plans to provide additional details on its cost initiatives and updated outlook during its upcoming earnings call, scheduled for 5:30 p.m. EDT on September 22, 2022.

Transportation Segment Performance for the Quarter Ended August 31:

FedEx Express

(Adjusted measures exclude the items discussed below under โ€œReconciliations of Non-GAAP Financial Measures to GAAP Financial Measures.โ€)

 

Fiscal 2023 Fiscal 2022
As Reported (GAAP) Adjusted
(non-GAAP)		 As Reported (GAAP) Adjusted
(non-GAAP)
Revenue $11.1 billion $11.1 billion $11.0 billion $11.0 billion
Operating income $174 million $188 million $567 million $660 million

FedEx Ground

Fiscal 2023 Fiscal 2022
As Reported (GAAP) As Reported (GAAP)
Revenue $8.2 billion $7.7 billion
Operating income $694 million $671 million

 

FedEx Freight

Fiscal 2023 Fiscal 2022
As Reported (GAAP) As Reported (GAAP)
Revenue $2.7 billion $2.3 billion
Operating income $651 million $390 million

FedEx Express aircraft photo gallery:

Documentary about Boeing MAX 737 disaster premieres on Amazon Prime

Kreindler & Kreindler LLP has issued this statement:

The work of NYC-based aviation accident law firm Kreindler & Kreindler is featured in a new documentary released by Amazon Studios. The tragic story of the Ethiopian Airlines flight 302 Boeing 737 MAX crash is told through the perspective of Pulitzer prize-winning journalist Dominic Gates, the victims’ families and their attorneys with added insight from former Boeing workers turned whistle-blowers.

Amazon Studios released the movie, Flight / Risk, a documentary that follows everyday people thrust into the midst of a global tragedy in the aftermath of two horrific crashes of new Boeing 737 MAX airplanes – tragedies that took place only five months apart. The two similar crashes resulted in the combined loss of 346 people. The story is revealed through several perspectives – Pulitzer prize-winning journalist Dominic Gates, the victims’ families and their attorneys, including Kreindler & Kreindler’s Justin Green, with additional insight from a former Boeing engineer turned whistle-blower.

Kreindler Attorney Justin T. Green in a deposition with a client
Kreindler Attorney Justin T. Green in a deposition with a client

View movie trailer for Amazon Prime documentary “Flight / Risk”:

A Law Firm Working on Behalf of the Victims of Ethiopian Airlines Flight 302

The film focuses particularly on the Kreindler law firm’s representation of 34 families who lost loved ones in the 2019 Ethiopian Airlines Flight 302 crash. Kreindler attorney Justin Green is Co-Chair of the Plaintiffs’ Executive Committee (PEC) for the victims’ families litigation against Boeing. Green, along with law partners Daniel Rose and Brian Alexanderare each military-trained pilots, bringing a unique perspective to their work on the PEC. Additional Kreindler attorneys appointed to the plaintiffs’ committee are Anthony Tarricone, Megan Benett, and Erin Applebaum. Kreindler attorneys Andrew Maloney, Kevin Mahoney, Vincent Lesch and Marc Moller round out the firm’s legal team working on the case. Kreindler is the largest and most successful plaintiffs’ aviation accident law firm in the world.

The Litigation Between Boeing and the Victims’ Families

In the lawsuit filed against Boeing in 2019, the victims’ families allege that Boeing put the financial interests of its shareholders ahead of the safety of passengers and flight crews. Boeing rushed the design, manufacture and certification of the Boeing 737 MAX, misrepresented to the public, the FAA, and Boeing’s customers that the airplane was safe to fly and Boeing shockingly continued to claim that the aircraft was safe to fly even after the second crash of a Boeing 737 MAX. The plaintiffs’ allege that Boeing was eager to get the plane into service quickly, as the company viewed the new aircraft as Boeing’s best weapon in its war for market share with European rival Airbus and their new A320neo airplane.

Lawsuits arising from the crash, yet still unresolved, are scheduled for trial in the U.S. District Court for the Northern District of Illinois, beginning March 2023 (In re: Ethiopian Airlines Flight ET 302 Crash (1:19-cv-02170).

Official spotters terrace at Madrid Airport is opened

Aena has inaugurated its first official spotters terrace at Madrid Airport.
The dedicated area for viewers and photographers is located on the Iberia Ring Road, near the tunnel that goes from Barajas Pueblo to Paracuellos (coordinates 40.48262,-3.57921), with a total area of โ€‹โ€‹2,100 m2 and views of the airport platform, the T4S and the Control Tower, this new area has a floor space of 132 m2, benches, litter bins, artificial lighting powered by solar panels and a 4 meter security fence. The opening hours of this new space are from 7:30 a.m. to 9:30 p.m. between June 15 and September 15 and from 8:00 a.m. to 7:00 p.m. the rest of the year.
The best light is in the afternoon/evening.
Outside the viewpoint, in the old industrial area (AZI) next to the access control to the site, five parking spaces have been set up reserved for users of the terrace.
Those interested in accessing this vantage point for spotters must be previously accredited by going to the accreditation booth, located before the security control. You need your ID or Passport.
Javier Rodriguez reporting from Spain.

Porter secures sale and leaseback for 12 Embraer E195-E2 aircraft

Porter Aviation Holdings Inc.’s (Porter) wholly-owned subsidiary, Porter Aircraft Leasing Corp., has entered into sale and leaseback and pre-delivery payment (PDP) financing agreements for 12 Embraer E195-E2 aircraft. TrueNoord, and certain funds managed by affiliates of Apollo and serviced by Merx Aviation, are participating in separate transactions for six aircraft each.

Porter has now secured lease agreements with five leasing companies for a total of 26 E195-E2s. These aircraft are part of Porter’s original order for 30 E195-E2s. Aircraft deliveries are scheduled to begin in 2022.

Porter Airlines is the North American launch customer for the E2. The aircraft will operate from Ottawa, Montreal, Halifax and Toronto Pearson International Airport, to destinations across the continent.

Porter Airlines aircraft photo gallery:

 

SAS signs letter of support with Heart Aerospace for options for ES-30 all-electric aircraft

Scandinavian Airlines-SAS has made this announcement:

SAS has signed a Letter ofย Support with Heart Aerospace for the option to add their new electric aircraft, ES-30 to the SAS regional aircraft fleet. This has the potential of being a significant step on SASโ€™ sustainability journey, enabling zero-emission flights on routes within Scandinavia.

The electric aircraft will be certified for commercial flights by 2028.

  • Together with the entire industry, we have the responsibility to make air travel more sustainable. SAS is dedicated to transforming aviation so that coming generations can continue connecting the world and enjoy the benefits of travel โ€“ but with a more sustainable footprint. The letter of support with Heart Aerospace is an important step in that direction, says SAS President & CEO Anko van der Werff.

The ES-30 has a fully electric range of 200 kilometers. A reserve-hybrid system is installed to secure reserve energy requirements without cannibalizing battery range, and it can also be used during cruise on longer flights to complement the electrical power provided by the batteries.ย This gives the ES-30 an extended range of 400 kilometers with 30 passengers, and flexibility to fly up to 800 kilometers with 25 passengers, all-inclusive of typical airline reserves.

SAS joined forces with Heart Aerospace already back in 2019 to drive the development of electric aircraft.

  • The electric aircraft will be a great complement to our existing fleet serving shorter and thinner routes in Denmark, Norway and Sweden, in a more sustainable way. The innovation and new technology this represents will take us towards our future goal of becoming a zero-emission industry, he concludes.

SAS will also be part of Heart Aerospaceโ€™s new Industry Advisory Board and will assist in defining the requirements for the ES-30 aircraft. The partnership between SAS and Heart Aerospace is the next step toward securing more sustainable air travel for generations to come.

SAS aircraft photo gallery:

GlobalX signs LOI with Eviation for 50 all-electric Alice aircraft

Eviation Aircraft,ย a manufacturer of all-electric aircraft, has announced that Global Crossing Airlines Group, Inc. (GlobalX), a Miami-based provider of passenger and cargo charter jets, has signed a Letter of Intent (LOI) ordering 50 all-electric commuter Alice aircraft. The aircraft will open up new routes for passenger travel in GlobalX’s key markets in Florida, the Bahamas, and the Caribbean, supporting the airline’s plan to adopt carbon-free and sustainable technologies.

GlobalX Eviation All-Electric Alice Aircraft

Alice is a nine-passenger electric aircraft offering a premium passenger experience.ย The aircraft, built from a clean-sheet design around all-electric propulsion, produces no carbon emissions, significantly reduces noise, and costs a fraction to operate per flight hour compared to light jets or high-end turboprops. Alice is powered by two magni650 electric propulsion units by magniX, which is the global industry leader in flight-proven electric propulsion systems at this scale.

GlobalX began passenger operations in August 2021 and operates seven A320 family aircraft serving the U.S., Caribbean, and Latin America. It also has 15 A321 freighter aircraft under lease agreements and will commence cargo operations in Q4 2022. Alice will enable GlobalX to introduce new, sustainable flight options for growing markets including Miami, Orlando and the Bahamas. GlobalX expects to take delivery of its initial Alice aircraft in 2027, and is evaluating the cargo aircraft variant of Alice for supporting its cargo customer base.

GlobalX aircraft photo gallery:

Air Canada to acquire 30 ES-30 electric regional aircraft from Heart Aerospace

Air Canada has announced a purchase agreement for 30 ES-30 electric-hybrid aircraft under development by Heart Aerospace of Sweden. The revolutionary regional aircraft, expected to enter service in 2028, will generate zero emissions flying on battery power and yield significant operational savings and benefits. Under the agreement, Air Canada has also acquired a US$5 million equity stake in Heart Aerospace.

Air Canada Heart Aerospace ES-30 electric-hybrid aircraft

The ES-30 will allow Air Canada to serve regional and commuter routes more sustainably, providing low-emission connectivity to local communities over the medium-to-long term. It will be capable of carrying 30 passengers seated three across (in a 2X1 configuration), with a galley and lavatory. Air Canada has placed a purchase order for 30 ES-30.

The aircraft will be powered by lithium-ion batteries, and will be quieter, have better operational parameters, be more reliable, and have a smaller environmental footprint than conventional turbo-prop aircraft. It will also be equipped with reserve-hybrid generators that can use sustainable aviation fuel. Fully loaded, the ES-30 is projected to have an all-electric, zero-emission range of 200 km. This can be extended to 400 km with power supplemented by the generators, and up to 800 km if the load is restricted to 25 passengers. Charging time for the aircraft is expected to be 30-to-50 minutes.

Video:

Air Canada aircraft photo gallery:

Azman Air suspends operations, wants to restore its AOC

Azman Air’s operations were suspended today by the Nigerian Civil Aviation Authority (NCAA) as its AOC had expired.

The airline plans to resume operations when its AOC is restored.

Previously Dana Air and Aero Contractors ceased operations in Nigeria.

Azman Air aircraft photo gallery:

Air Arabia to fly from Abu Dhabi to Kuwait City

Air Arabia will launch a new route connecting Abu Dhabi with Kuwait City starting on October 31.

OAG Data: Jet2.com was the only UK airline not to cancel a single flight during July and August

Jet2.com is touting its operating performance this summer with this report:

Jet2.com did not cancel a single flight during the busy summer month of August, the second month in a row that Jet2.com was the only UK airline not to make any cancellations. This comes from detailed flight data published by leading travel intelligence company OAG.

Despite operating thousands of flights and carrying millions of customers during the busy month of August, the data shows that Jet2.com operated every single flight. With OAG data showing that the airline did not cancel any flights in July either, it means that Jet2.com is the only UK airline to operate its full programme during the peak summer months of July and August without making cancellations.

The August data can be viewed here: https://www.oag.com/en/on-time-performance-airlines-august-2022?hsLang=en-gb

Back in May, Jet2.com kicked off its biggest ever summer program, with capacity increasing 14% compared to Summer 19. In addition, July saw the busiest weekend in the companyโ€™s history, when Jet2.com operated over 800 flights on the weekend of 23rd/24th July alone.

Jet2.com and Jet2holidays took action to plan for travel reopening and the start of this busy summer season. By investing and proactively recruiting ahead of the bounce back, it has ensured that the companies have a very visible uniformed presence in place (referred to as the Red Team) in UK airports as well as in main overseas airports and in resorts.

This team, comprised of thousands of colleagues, are on hand making an enormous difference in terms of assisting and guiding customers throughout their journey. Commencing active recruitment in Autumn 2021 means that Jet2.com and Jet2holidays have not made any cancellations due to staff shortages.

Having this dedicated team in place also means that Jet2.com and Jet2holidays have operated an enormous programme of flights and holidays in July and August from ten bases across the UK, receiving positive feedback from many happy customers and independent travel agents.

Jet2.com Fact Sheet:

 

Jet2.com Destinations from 10 UK bases:

Jet2.com aircraft photo gallery: