UPS MD-11 trijet
Air cargo giants FedEx and UPS, the two largest remaining operators of the McDonnell Douglas-developed MD-11 freighter, have both announced plans to begin retiring their fleets of aging trijets.
Between them, FedEx and UPS currently operate 94 MD-11s, or almost half of the 200 aircraft delivered between 1990 and 2001. But FedEx, which was launch customer for the factory-built freighter version, has announced plans to phase out the trijet as part of a broad ranging cost-saving and modernization campaign, while UPS began retiring the first of its MD-11s in January.
Dubbed the DRIVE program, the FedEx streamlining effort aims to deliver $4 billion in cost reductions by the end of fiscal 2025. Raj Subramaniam, FedEx president and chief operating officer, says part of this effort is focused on reconfiguring the air network. “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 767s affords us the ability to flex our plans,” he adds.
Commenting at the company’s fiscal 2023 third quarter financial results call, Subramaniam says the decision also reflects a flatter market forecast. “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.”
According to Aviation Week Network’s Fleet Discovery database, FedEx currently operates 54 MD-11s. The carrier plans to replace them with a combination of 767-300F and 777Fs, of which it has 27 and eight on order respectively. The 767 is due to become FedEx’s single largest fleet type with 125 already currently in operation and 27 more on order. The 53-strong 777F fleet is due to grow to 61 with the addition of eight further aircraft through 2025.
UPS, which accepted its first MD-11 in 2001, says it will retire the first batch of six trijets in 2023 and currently has 40 remaining in service. Like FedEx, it is reducing costs as cargo loads decline and is replacing the older aircraft with more fuel efficient 767-300Fs. The operator, which saw its 2022 fourth quarter operating profit fall by 3.3%, currently operates 80 767s and has a further 27 on order between now and 2025.
Outside of FedEx and UPS, the third largest MD-11 operator is Florida-based Western Global Airlines with 15 aircraft, of which 10 are thought to be currently in storage at various locations.
The cargo sector enjoyed a boom in demand during the pandemic, when grounded passenger flights meant less belly hold capacity was available for transporting goods. Taking advantage of the strong cargo activity, Airbus has launched the A350F and Boeing the 777-8F. In recent months, however, cargo demand has weakened.
The cargo market made a slow start to 2023, with demand down 14.9% year-over-year in January and capacity up 3.9%, IATA said March 7. But there are still grounds for cautious optimism, says IATA Director General Willie Walsh. “2023 began under some challenging business conditions. That was accompanied by persistent uncertainties, including war in Ukraine, inflation, and labor shortages,” Walsh said. “But there is solid ground for some cautious optimism about air cargo. Yields remain 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 said it expected demand for freighters to remain strong even as the air cargo market normalizes after COVID-19, with expected demand for nearly 2,800 freighters between 2021 and 2041, driven in particular by the Asia-Pacific region and by the e-commerce sector.
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