Package delivery company FedEx Corp. (NYSE: FDX) owned 582 airplanes at the end of May 2015 and leased another 65, for a total fleet of 647 planes. Of the planes it owned, 241 were manufactured by Boeing Co. (NYSE: BA) or by McDonnell Douglas prior to its merger with Boeing in 1997. Another 29 Boeing planes were leased, bringing FedEx’s total Boeing fleet to 270 planes.
Including 47 planes manufactured by ATR, its joint venture with Italy’s Leonardo-Finmeccanica, Airbus has 136 planes in the FedEx fleet, of which the delivery company leases 36. FedEx also owns 241 Cessna 208B airplanes.
The most popular Boeing aircraft in the FedEx fleet is the now-discontinued 757-200, a dual-engine narrow-body that Boeing configured as a cargo plane. The plane can carry 63,000 pounds of cargo with a maximum range of 3,625 miles. The average age of these planes in the FedEx fleet is nearly 25 years. Boeing sold more than 1,000 of the planes and delivered the last new 757 in 2004.
Boeing’s list price for a 757-200 in 2001 ranged between $72.5 and $80.5 million. In 2012 FedEx probably paid about $10 million for a used 757.
Another satisfied 757 customer is presumptive Republican Party presidential nominee Donald Trump, who purchased “Trump Force One” in 2011 from Microsoft co-founder Paul Allen.
Boeing had also supplied FedEx with 21 767-300 cargo jets at the end of May 2015 (the end of the most recent fiscal year for which the company has produced an annual report) and FedEx ordered 50 more of the wide-body planes last July with an option on 50 more. At a list price of $199.3 million per copy, the order was valued at nearly $20 billion. By the time FedEx takes the last delivery from that order the 767 design will be 40 years old.
Why buy such an old design? Mostly to replace even older ones and reduce the variety of planes in FedEx’s fleet. The McDonnell Douglas DC-10s (43 of them as of January) have an average age of 38.8 years. The 58 MD-11s average 23 years old. FedEx’s 767s average less than three years old. The 767 is also more fuel efficient and shares many parts in common with the 757s in the fleet.
Because Boeing is building its new Air Force tanker, the KC-46A, on the 767 airframe FedEx is assured of parts for at least another 40 years, the expected life of the tanker.
Finally, FedEx reported 27 Boeing 777 freighters in its fleet at the end of November 2015, and in January the company said it had committed to another 16 at a list price of $318.7 per copy, for an order totaling more than $5 billion.
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