FedEx MD-11 purchase

VaB

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Anyone FedEx guys have any guesses as to how this will affect the company. Especially the pilot group after the "Big Bid" last year.




"Fedex drops buy of 15 Swissair wide-bodies

LONDON, Nov 26 (Reuters) - U.S. express shipper Fedex Corp (NYSE:FDX - news) has dropped a plan to buy 15 McDonnell Douglas MD-11 wide-body airliners from collapsed Swissair Group , industry weekly Flight International reported on Monday.
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Unnamed banks would end up owning the planes, which Swissair operates on lease from its own Flightlease unit, Flight said.

The magazine quoted the lessor as saying the deal had been ``suspended''. Fedex was trying to rein in capacity, it said, citing industry sources.

Swissair is trading under protection from creditors and has debts exceeding assets. It is expected eventually to be wound up, with some of its operations undertaken by affiliate Crossair AG .

The group's bankruptcy had entitled Fedex to cancel the planes, but the U.S. company would still be interested in the planes if it could get them in two or three years, Flight said.

Whoever eventually buys the MD-11s is unlikely to pay as much as Fedex agreed to pay for them in 1998, and the loss of value may be carried partly by the banks who financed them.

The MD-11 was already an increasingly unpopular type of aircraft before the global aviation sector entered a slowdown a year or so ago. Then the September 11 attacks crushed demand for air travel, leaving the industry with little interest in operating types that are fairly costly to run, such as the

Md-11.


Before the attacks, 15 MD-11s would have been worth almost $1 billion, depending on their age. "



Link: http://biz.yahoo.com/rf/011126/l26374454_1.html
 

commuter

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Nov 25, 2001
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I don't think any of these planes were accounted for in the bid. I wouldn't be surprised to see FedEx buy these same airplanes for a better price soon.
 

bssthound

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Nov 25, 2001
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I agree. The article said the jets would probably cost less
in a few years and Mr. Smith is known for not paying a
nickel more than he has to. Looks like to me like the
purchase is just delayed.
 
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