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FedEx Gets Hammered In 3Q; More Cuts?  
User currently offlineFxramper From United States of America, joined Dec 2005, 7361 posts, RR: 85
Posted (5 years 9 months 1 week 1 day 1 hour ago) and read 4954 times:
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Despite taking market share again in every category we took a hit for 3Q results. I heard it was almost 75% down from a year ago; $100 million from $400 million. We already are trimming the fat at AGFS, and expect more cuts. Capacity, early outs, flight hours, etc. Your guess is as good as mine right now. I know a few details about individual hubs - AFW, OAK, IND, LAX, ANC, CAN, etc., but nothing is set in stone. Two TPAC and one TATL routes have been suspended already; number for international freight for everyone are suffering heavily. I don't have a link, this was comail.

 twocents 

24 replies: All unread, jump to last
 
User currently offlineLightsaber From United States of America, joined Jan 2005, 13536 posts, RR: 100
Reply 1, posted (5 years 9 months 1 week 1 day ago) and read 4926 times:
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The Memphis, Tenn.-based company, often seen as a bellwether for the U.S. economy, said it earned $97 million, or 31 cents per share, compared with $393 million, or $1.26 a year earlier.

Here is a link:
http://finance.yahoo.com/news/More-j...-and-pay-cuts-at-apf-14688893.html

That's a profit! Yes, cutting is required, but at least they are viable after some reductions. The question is what will they park? Also, when will they take advantage of dropping aircraft residual values to update the fleet? Today is too early... perhaps next year?

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineFxramper From United States of America, joined Dec 2005, 7361 posts, RR: 85
Reply 2, posted (5 years 9 months 1 week 1 day ago) and read 4905 times:
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Quoting Lightsaber (Reply 1):
The question is what will they park?

There are already 20+ widebodies parked. There is moderate rotation for heavy checks with the parked a/c. We are giving back the GE leased A310s. Those 727s will be around longer than you think.  airplane 


User currently offlineRampguy From , joined Dec 1969, posts, RR:
Reply 3, posted (5 years 9 months 1 week 1 day ago) and read 4884 times:

FedEx has already elminated the Friday night sort at IND. On the other hand, with the MEM runway constructin project beginning, FedEx has shifted 11 flights to IND which means more volumne. Does anyone have a list of the flights that were moved from MEM to IND. I have seen an MD11 on the north ramp parked around Gate 60 or 62 that isnt' usually there. Also, there seems to be a few more 727's than what was there.

User currently offlineTPA36R From United States of America, joined Jul 2007, 210 posts, RR: 0
Reply 4, posted (5 years 9 months 1 week 1 day ago) and read 4839 times:

Whats going on at FedEx is embarrassing. They are really screwing with the pilots in terms of bids and BLG's. What a shame.


OH OH we only made $100 Million!!! Oh no!


User currently offlineLightsaber From United States of America, joined Jan 2005, 13536 posts, RR: 100
Reply 5, posted (5 years 9 months 1 week 23 hours ago) and read 4733 times:
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Quoting Fxramper (Reply 2):
We are giving back the GE leased A310s. Those 727s will be around longer than you think.

I'm not surprised on the A310's. LAXintl kindly provided current lease rates. The A310's look as if they are at end of life. Maybe one more lease, but investing in a D-check is going to be an interesting business case.

I wonder how long the 727's will fly. In my opinion, there will be enough 757's available soon to allow Fedex to replace them for a lower cost than keeping the 727's and puting them through a D-check.

Thread with lease rates:
http://www.airliners.net/aviation-fo...eneral_aviation/read.main/4349515/


FedEx made a profit, but the big news is they are an economic bellweather. Good for them making money.

Quoting Rampguy (Reply 3):
FedEx has already elminated the Friday night sort at IND.

How does that work? No Saturday deliveries for a region? Sorting at another hub (e.g., MEM)?

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineFxramper From United States of America, joined Dec 2005, 7361 posts, RR: 85
Reply 6, posted (5 years 9 months 1 week 22 hours ago) and read 4611 times:
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Quoting Rampguy (Reply 3):
elminated the Friday night sort at IND

Chalk up elimination of day sort(s) at AFW to bad economy.  crying 

The Lone Star District MD told me there are some 15 displaced (potentially) managers at AFW/DFW.

Quoting Rampguy (Reply 3):
Does anyone have a list of the flights that were moved from MEM to IND

Hit me on PM and I can provide that information for you.

Quoting TPA36R (Reply 4):
really screwing with the pilots

Poor pilots are only making $125k instead of $175k now.  rotfl 

I think it's a lot better than the alternative - layoffs.


User currently offlineSteeler83 From United States of America, joined Feb 2006, 9268 posts, RR: 21
Reply 7, posted (5 years 9 months 1 week 21 hours ago) and read 4587 times:



Quoting Fxramper (Reply 6):
Poor pilots are only making $125k instead of $175k now.

Yeah... Those poor pilots... I guess they won't be going out to dinner for lobster and filet mignon every night anymore...

Doesn't FX have some hub of sorts at EWR also?



Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
User currently offlineFXramper From United States of America, joined Dec 2005, 7361 posts, RR: 85
Reply 8, posted (5 years 9 months 1 week 21 hours ago) and read 4552 times:
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Come on FedEx stock!  crying 

Quoting Steeler83 (Reply 7):
Doesn't FX have some hub of sorts at EWR also?

Absolutely; 2nd largest airline at EWR behind CO. It's our 3rd largest hub (North East Regional).


User currently offlinePITrules From United States of America, joined Jun 2000, 3255 posts, RR: 6
Reply 9, posted (5 years 9 months 1 week 17 hours ago) and read 4399 times:



Quoting Fxramper (Reply 6):
Poor pilots are only making $125k instead of $175k now.  rotfl 

I'm glad you think individuals who lost $50K/yr is so funny!

Perhaps those sacrifices helped save your job? Or perhaps you'd only be happy if pilot's pay is reduced to that of rampers?



FLYi
User currently offlineStasisLAX From United States of America, joined Jul 2007, 3287 posts, RR: 6
Reply 10, posted (5 years 9 months 1 week 17 hours ago) and read 4381 times:



Quoting TPA36R (Reply 4):
OH OH we only made $100 Million!!! Oh no!

It could be so much worse - former employees of DHL (like me) will tell you how much worse it could be.  Yeah sure



"Those who would give up essential liberty to purchase temporary safety deserve neither liberty nor safety!" B.Franklin
User currently offlineLightsaber From United States of America, joined Jan 2005, 13536 posts, RR: 100
Reply 11, posted (5 years 9 months 1 week 17 hours ago) and read 4357 times:
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Quoting StasisLAX (Reply 10):
It could be so much worse - former employees of DHL (like me) will tell you how much worse it could be.

I hope you're doing ok. Good luck.

Quoting Fxramper (Reply 6):
Poor pilots are only making $125k instead of $175k now.

I missed that the FedEx pilots took a pay cut. I wondered at TPA36R's comment:

Quoting TPA36R (Reply 4):
Whats going on at FedEx is embarrassing.

The bidding process probably will be messed up everywhere are the downsizing goes through.

As to the pay: Folks, we're in deflation. Deflation=pay cuts.  Sad Oh, it does mean a better standard of living for retirees too.


Any more news/rumors on plans to park aircraft?

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineYyz717 From Canada, joined Sep 2001, 16367 posts, RR: 56
Reply 12, posted (5 years 9 months 1 week 13 hours ago) and read 4251 times:



Quoting TPA36R (Reply 4):
They are really screwing with the pilots in terms of bids and BLG's.

And the pilots are screwing with Fedex with their high wages and inflexible work rules. It cuts both ways.

Anyway, in a recession, perhaps the pilots should be grateful for a job.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineFlyDeltaJets87 From , joined Dec 1969, posts, RR:
Reply 13, posted (5 years 9 months 1 week 13 hours ago) and read 4181 times:



Quoting TPA36R (Reply 4):
OH OH we only made $100 Million!!! Oh no!

We made more than that in bonuses.

Signed,
AIG

 duck   wink 


Anyone know if this will effect the hub thats being built at GSO for FX or is that hub completion still too far down the road to worry about?


User currently offlinePhelpsie87 From United States of America, joined Apr 2006, 498 posts, RR: 2
Reply 14, posted (5 years 9 months 1 week 12 hours ago) and read 3973 times:



Quoting FlyDeltaJets87 (Reply 13):
Anyone know if this will effect the hub thats being built at GSO for FX or is that hub completion still too far down the road to worry about?

Found this link that will help since I only have company news and hear say...

FX will delay opening of the GSO Mid-Atlantic Hub until later this fall instead of the June opening they planned. They also plan on reducing the hiring numbers to less than half of what they had planned. I believe initial hiring estimates were going to around 1000-1200, but that number is now around 300.


http://southflorida.bizjournals.com/...ad/stories/2008/12/22/daily38.html

In other news, FX announced that annual pay raises for employees (ramp, drivers, etc) will be put on hold until June 1st (usually we get that raise in March). Originally, they announced that they would wait for the 3rd Q results...well, we know how that turned out. Hopefully, the 4th Q will bring more promise.


User currently offlineFlyDeltaJets87 From , joined Dec 1969, posts, RR:
Reply 15, posted (5 years 9 months 1 week 10 hours ago) and read 3717 times:



Quoting Phelpsie87 (Reply 14):

Thanks  Smile

As a GSO resident for part of the year, I'm looking forward to seeing the FX traffic when I'm hear. I didnt realize the hub was set to open that soon though. I thought the new hub was still a couple years down the road. Shows how much I pay attention to things around here.


User currently offlineBigJimFX From United States of America, joined Jun 2005, 321 posts, RR: 0
Reply 16, posted (5 years 9 months 1 week 9 hours ago) and read 3604 times:

To bad at AFW. This was supposed to be FedEx's gateway to south america... The whole facility was built to expand! Find my e-mail, and I'll tell ya about it. many things thought about with that facility.


I'd like to thank me for flying Me Airways...
User currently offlinePHX Flyer From United States of America, joined Apr 2001, 605 posts, RR: 0
Reply 17, posted (5 years 9 months 1 week 9 hours ago) and read 3559 times:



Quoting Phelpsie87 (Reply 14):
FX will delay opening of the GSO Mid-Atlantic Hub until later this fall

Any word on the new European hub in CGN? Planned opening date is (was?) 2010. Any chance this may be delayed too?

Quoting Fxramper (Thread starter):
Two TPAC and one TATL routes have been suspended already

I'm curious which long-haul routes have been scrapped.


User currently offlineUPS757Pilot From United States of America, joined Apr 2007, 102 posts, RR: 0
Reply 18, posted (5 years 9 months 1 week 6 hours ago) and read 3348 times:



Quoting Fxramper (Thread starter):

Where does it say you have taken market share again in every category? I know we're blowing you guys away in Europe for instance, where we have market share. Also, we're better suited for this financial storm with a better spread among air, ground and freight.


User currently offlineLightsaber From United States of America, joined Jan 2005, 13536 posts, RR: 100
Reply 19, posted (5 years 9 months 1 week 1 hour ago) and read 2885 times:
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Does anyone have a link to FedEx and UPS' current aircraft fleets? Thanks in advance.

Quoting Phelpsie87 (Reply 14):
to less than half of what they had planned. I believe initial hiring estimates were going to around 1000-1200, but that number is now around 300.

Wow... quite a difference... I'm impressed they're still going to open the facility.

Quoting UPS757Pilot (Reply 18):
Also, we're better suited for this financial storm with a better spread among air, ground and freight.

You should have touted your bond rating.  Wink

FedEx and UPS are both gaining market share at DHL's expense. But what I do not know is even what all the categories are!

Certainly:

US Domestic:
Express (flight)
Ground
Freight

TATL
TPAC

Inter-Europe:
Express (flight)
Ground
Freight

Europe-Africa (is this a significant market?)
to Southeast Asia/Australia
North Asia (Japan, Korea, China, Taiwan, Philippines, Hong Kong)

etc.

While I doubt anyone is dominating every category, due to DHL pulling out of US domestic, there is rapid market share growth for UPS and FedEx as a result. But the question is, who grabbed more?

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlinePhelpsie87 From United States of America, joined Apr 2006, 498 posts, RR: 2
Reply 20, posted (5 years 9 months 1 week 1 hour ago) and read 2774 times:



Quoting FlyDeltaJets87 (Reply 15):
Thanks

As a GSO resident for part of the year, I'm looking forward to seeing the FX traffic when I'm hear. I didnt realize the hub was set to open that soon though. I thought the new hub was still a couple years down the road. Shows how much I pay attention to things around here.

haha no worries buddy. I was down in GSO last September and was wondering why they were building a new runway...I didn't put 2 and 2 together...

Quoting PHX Flyer (Reply 17):
Any word on the new European hub in CGN? Planned opening date is (was?) 2010. Any chance this may be delayed too?

Haven't heard anything yet, I'll have to ask the big dogs at work. If anything, we are getting a visit from the Regional Manager next week...he always has the answers!

Quoting Lightsaber (Reply 19):
While I doubt anyone is dominating every category, due to DHL pulling out of US domestic, there is rapid market share growth for UPS and FedEx as a result. But the question is, who grabbed more?

According to the Earnings call we heard about this morning, FX pulled more...again.

Interestingly enough, FX Delayed Service (2-Day, Express Saver etc) was down 3% YOY, while our Overnight Service increased 1%. What is interesting is that the Delayed Service is obviously less costly for the customer, so it seems funny that Overnight would increase.

Another number we got this morning...Operating Margin was only 0.9%...I think that one is the scariest of them all. Remember when FX was a 9-12% Corp?

But on the lighter side, Forbes named FX the 7th Most Admired Company!!


User currently offline413X3 From United States of America, joined Jul 2008, 1983 posts, RR: 0
Reply 21, posted (5 years 9 months 6 days 23 hours ago) and read 2683 times:

I just think it was ridiculous for Fedex to constantly hire new pilots. Didn't they have new hire classes at least once a month? I understand they were growing, but many people knew a slowdown was coming. It looks like basically every company on the planet for the most part was caught not planning ahead. Instead everyone was just riding the huge wave forgetting the shore was ahead

User currently offlineSean-SAN- From United States of America, joined Aug 2002, 772 posts, RR: 1
Reply 22, posted (5 years 9 months 6 days 10 hours ago) and read 2521 times:



Quoting 413X3 (Reply 21):

Fedex hasn't hired for over a year, and rumors are of up to 700 pilot furloughs on the horizon.


User currently offlinePhelpsie87 From United States of America, joined Apr 2006, 498 posts, RR: 2
Reply 23, posted (5 years 9 months 5 days 19 hours ago) and read 2364 times:



Quoting Phelpsie87 (Reply 14):
In other news, FX announced that annual pay raises for employees (ramp, drivers, etc) will be put on hold until June 1st (usually we get that raise in March). Originally, they announced that they would wait for the 3rd Q results...well, we know how that turned out. Hopefully, the 4th Q will bring more promise.

Just to clarify from the above, FX will make an announcement regarding U.S. hourly pay increases June 1st, instead of increasing wages as I made it sound. We may not get them at all, but as I have said and many have agreed...I would rather have a job then a raise!!


User currently offlineYyz717 From Canada, joined Sep 2001, 16367 posts, RR: 56
Reply 24, posted (5 years 9 months 5 days 9 hours ago) and read 2229 times:

This recession (and declining earnings) is a golden oppty for Fedex to cut some fixed costs (such as high salaries) and remove older aircraft to lower the cost base before moving fwd. While earnings are reduced, there is still a profit so no urgency. The reduction in salaries will be easy since there are few other employers of calibre in MEM -- it's unlikely many will leave Fedex.

Quoting Phelpsie87 (Reply 20):
What is interesting is that the Delayed Service is obviously less costly for the customer, so it seems funny that Overnight would increase.

Ironically, it can be MORE expensive to offer a 2-day service than an overnight service, despite offering a low rate to the customer. If the product has to fly to meet the 2-day commitment, it may also have to be stored somewhere the 2nd day prior to delivery when logistically it could be delivered the next day. To offer next day service for a 2-day paid service would or could undercut the the higher yielding overnight service.

Quoting Lightsaber (Reply 5):
I wonder how long the 727's will fly. In my opinion, there will be enough 757's available soon to allow Fedex to replace them for a lower cost than keeping the 727's and puting them through a D-check.

There are still 75 722's in service. Only 5 752's have entered service. Another 23 752's have been purchased but most of these are yet to be delivered or are in storage awaiting F conversion. I only count 8 752's in the F conversion process now. So, it will take years & years to replace the 722 fleet with 752's.



Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
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