I respect Fed Ex but the decision to purchase the A380 is crazy!
The WSJ stated:
"Like executives at some passenger carriers that have ordered the A380, FedEx Chairman and Chief Executive Frederick W. Smith is said to view the A380 as not only an efficient vessel for moving packages, but as an all-new-design plane that would symbolize the company's ambitions".
There is no proof how effecient the A380 will be or if it will even get off the ground. There are only estimates! The factual proof won't be available until they get one built and airborne!
Fed Ex re-identified themselves again with the introduction of Fed Ex ground. Fed Ex ground cannot even service every address in the United States and desparately need to develop their ground infrasctucture. Fed Ex has an enormous amount of debt. Domestic volume is flat. They already have too many aircraft. All the MD-11's are not even in Fed Ex's hands yet that they purchased from airlines, They have alot of DC-10's sitting in storage for MD-10 conversion, the 727-100 fleet is being retired and they will need to replace them since you can't drop an A380, DC-10, or MD-11 into a small airport!
UPS was awarded flights to China and Northwest is going to fly 747 freighters to China also. Fed Ex is going to lose quite a bit of volume in Asia because of this.
So with rising fuel prices, signs of a slowing American economy, flat volume growth, lack of ground infrastructure, high debt, increased competition and Fred Smith wants to spend 2 billion to increase Fed Ex's debt and purchase the A380 to "symbolize the company's ambitions".
This is going to end up were ZAP MAIL did with Fed Ex!