Tuesday, November 7, 2006

FedEx Dumps Airbus, Goes to Boeing

Cargo delivery giant FedEx announced today that it has canceled its order for 10 A380-800F planes and instead has ordered 15 Boeing 777 (777F) freighters. Notably, this is the first A380 customer that Airbus has lost.

CEO Frederick Smith said, "The availability and delivery timing of this aircraft, coupled with its attractive payload range and economics, make this choice the best decision for Fedex." He went on to say, "Global demand for air cargo and express services continues to grow rapidly and FedEx has made significant investments in our network to meet customers' needs and fulfill our business objectives. Therefore, it was necessary and prudent for us to acquire the Boeing 777 Freighter." Simply put, FedEx needs new planes soon, not later, and if Airbus can't deliver, then they figure that Boeing will.

Right now I'm sure everyone at Boeing headquarters in Chicago is partying, but not the same in Toulouse, France - Airbus headquarters. Airbus has been facing some tough times recently, with Emirates threatening to cancel its order for 43 passenger A380s (the largest customer of the plane to date). Right now, the scheduled first delivery of the A380 to an airline will be in October 2007 - two years behind schedule.

Deliveries of the aircraft to FedEx are expected to start in 2009 and last through 2011. At the time of writing, shares of Airbus parent company EADS fell 3.05% while Boeing shares climbed 5.26%

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