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!

The A380 design is a lot further down the road than some people imagine......don't forget, they've had many, many years to design it....coupled with this, a lot of the technology and design for the A340-600 will also be incorporeted on the A3XX, most of the engineers working on the -600 program are moving across to the A380.......weight predications have been met, and many of the primary systems are already designed.....wind tunnel testing has been ongoing for years also.....the design has been frozen for quite a while now....

I'm sure that may be the case but according to Airbus the freighter isn't going to be ready for another 7 years (2008) If alot of A340 technology is going to be incorporated into the A380 then that makes it worse for being a freighter. The A340 will never be a good freighter unless sombody comes along to do a HEAVY conversion on it and some more power.

I'm not too sure about the freighter version, granted a lot of R&D will have to be done to work out three levels.......as for thrust, I don't think the A380 will be lacking in it........

Also, the 747XF can carry as much cargo, but with less total weight and fuel needed. If Fedex does order it, than I will be very surprised. UPS may order some 744s to replace their old 747s this year, correct me if I'm wrong UPS Pilot. I think Fedex would have much more luck with new 747Fs.

Regards,

B744

With cargo though it depends on whether operators reach max. weight or max. volume first......

Go for it Fedex, I'll be at CLK when your first A380F lands.

I just get the feeling that when it comes to Airbus most of you have an auto NO !!!, thats whats made me more of a Airbus fan then ever before.

UPS Pilot...are you jealous or something??

I think there are too many speculations about which airline who needs the A380 and so on. I think the airline knows that best themselves and if now Fedex needs them they order them.....and it's not today they receive them...so they might need them to transport such large loads of cargo within 5 years. It's the same with the passenger-airlines.

Are ya worried? 

Airbus designs the A380 with alot of "proven technology", which means that they took many designs from alot of aircrafts that were developed, and has actually flown. Just an example the fly by wire technolgy that's bening implemented in many modern a/c. Besides nowadays you don't really have to test fly an plane. Computer modeling is pretty much all you need to test it. With this being said A380 doesn't really have to fly to know that it really works.

Do they need it? Maybe. For those of you who say that the development of the A380 and those knocking it are similar to the advent of the 747 and all of the naysayers back then, you are right. And I believe, in its early years, a lot will be similar as with the early years of the 747. One of the similarities will be a lot of airlines ordering a glamour piece only to find out later on and billions of dollars later that they shouldn't have......How many airlines started with the 747, lounges and all, only to quickly retire them after financial disaster, and many of those have still not gone back.....Think about it.

We should also note that glut of 747s in the beginning created excess capacity that could not be met. Imagine if economy goes in the tank- or even slows down slightly- A380 operators will feel the pinch.

Yes   I own some Fed Ex stock!

I'll just have to sell my Fed Ex stock to purchase more UPS thats all.

Don't worry. If FedEx found A380 is not efficient, it will cancel orders of other 380s within first month and, even on the worst circumstances, great Boeing will rebuy ex-FedEx 380s to sell 747Xs. It is funny that how many used planes from competitor both A and B had bought.

This wasn't an ANTI Airbus statement to those of you that think so. I just find it out of Fred Smith's character to make such a move. Well who knows the freighter won't first fly according to Airbus till 2008, alot of things may happen until then  

I fully understand stock-holder's point of view. Just to say 'Don't worry, be happy'. There isn't any major airliner gone to bankcrupcy for selecting Airbus.

Why?   The great Boeing will buy old Airbus!!

Thanks!
Actually I'm not worried. I only own a thousand shares of Fed Ex.  

I remember when UPS didn't deliver things over-nite , Fedex did, so UPS had to buy airplanes, UPS never left the U.S. but once again FEDEX did so UPS had to also. Back in '94 FEDEX bought a bunch of a300-600's well ?you guessed it UPS had to get some too, and when FEDEX was envolved with MD on the MD-11 no other airline saw that the MD-11 would be a great freighter...the reason FEDEX is the company it is today is because Fred Smith has ....(BALLS) no one at UPS dose ... Bring on the A380-800F it will work as great as the other Airbuses I'm sure ,,, and then UPS will want some too.

UPS began air operations in the 1920's   Fed Ex wasn't even a twinkle in Fred Smiths eyes. UPS RED label and BLUE label air back in the early seventies were before Fed Ex and were delivered on United Airlines aircraft mostly. UPS' opened a hub in EDDK, Cologne, Germany in 1975 before Fed Ex could even service the United States. UPS serviced every address in North America before Fed Ex. MMM Fed Ex ground nuff said   If you look back just a few years ago, when UPS was looking for the next a/c, France just closed their opened skies with UPS & United airlines on the other side of the fence looking in. Fed-Ex in to France big time, so what do you think UPS & United would order for their next a/c Cessna's??? The next thing you know we UPS anounce that we would fly around the world with stops in Paris from all places & United would start flying to Paris non-stop, imagine that???Guess what now they can! The MD-11 was offered to UPS long ago from McDonnell Douglas but UPS decided to purchase the 767-34af instead because of launch customer discounts and a proven airframe as you probably know the MD-11 had problems with airlines. UPS purchased the MD-11 to fly to Europe and Asia because of increased volume that didn't warrant a 747 flight and again airlines are dumping them off cheap. UPS has also added on 2 more 747's Boeing made a nice deal with UPS for the MD-11's and are negotiating along with Airbus for the 747x and A380 but UPS told both that they are more concerned about 2001 aircraft needs. Boeing and Airbus could not get the A380 or 747x or even the 747-400f out before the end of 2001, the only choice was the MD-11.
UPS' air volume both Domestic and Internationally is growing faster than Fed Ex. With service to China this is going to take more volume away from Fed Ex. The funny thing about it is UPS has such a large ground ifrastucture that alot of air traffic can move by ground. That why this peak season UPS moved over 19 million packages on peak day and Fed Ex only did 8 million and UPS used less aircraft $$$$$
I admire Fred Smith and Fed Ex but please DC-10guy get your stories straight!
Your right Fred Smith has balls!

UPS Pilot wrote:
-------------------------------

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. <

I disagree with this.

As I mentioned before I think A380 is the best aircraft for Fed Ex. For example, Fed Ex has about 8 flights out of SJC and Oakland. This could be easily replaced with 2 or 3 A380.

A380 will give Fed Ex more space and bypass their ANC hub hence lower operating cost.

fred smith's track record with fedex shows a man that is willing to take calculated risks for the good of the company and shareholders. in the ever changing world of technological advances and economical uncertainty fedex has always been on the cutting edge of improving it current product. i mean only fred smith would make it seem viable to take united's and american's dc-10-10's and turn them into md-10's. what i am trying to get at is that fred smith always looks for the good deal. if airbus will absorb the cost and give it to fedex at the fred sith rate, of course he is going to consider it. buy doing business with airbus fred puts pressure on boeing. for the right price fred will consider a purchase but that does not neccesarily mean he will open his bank account.

How in the world are they going to get a loader way up there?

Just wondering

widebodyphotog

Worried are you? I doubt FedEx will lose any business. They have the largest cargo service in the world. I think they know what they're doing.

GO FEDEX!!!!!!!!

I didn't post this as anti Fed Ex and Yes I was worried because I HAD a thousand shares of Fed Ex stock that I sold this A.M.

UPS
1999 revenues for UPS exceeded $27 billion with over 2.31 billion in PROFIT! 13.5 million packages and documents delivered each day

FEDEx
1999 revenues for Fed Ex exceeded $ 16 billion with $459 MILLION in profit  . The profit decreased for Fed Ex in 1999 down from $510 million in profit. Daily package volume for Fed Ex (express) 3 million packages and documents, Fed Ex (ground) 1.3 million, combine both to equal 4.5 billion I'm rounding to the higher number  

How large is Fed Ex?

I'm sorry your right Fed Ex does need to purchase the A380 since they are so big 

BTW UPS is opening up another 40 offices in China alone on top of their 21 existing offices in China.

No I'm not worried  

You are aware, correct sir, that there are no A380's currently flying, and as far as I know, no -F versions on the books. Perhaps Boeing will make a B777-200F. That would be sweet.

Thanks for not making this a Fed Ex or UPS debate or an Airbus, Boeing debate

I really like Fed Ex. I wrote a college term paper about Fed Ex. I was hoping to work for Fed Ex but ended up working for UPS which I am very happy there.

I always kept Fed Ex stock in my portfolio.

I'm sure Fred got a nice proposal for the A380 and the man was a pilot, he can appreciate a new aircraft. I just can't fathom why he would purchase a large aircraft. Fed Ex along with UPS are time definate carriers. They need to depart on time or else you have thousands of packages and documents that are free (guarantees).
One poster stated that Fed Ex has 8 flights out of San Jose (I believe) and these could be eliminated with one flight with the A380. He's right it could but then what happens when it takes longer to load because of size? What happens when trucks are late for that one plane? What happens if there is a mechanical or weather and the plane is late? Then comes unloading the A380. This thing is going to take a while. No front loading like the 74, and the upper deck, what is going to be used to get freight off the top bunk? Then you have to have the equipment in all the airports serviced by the A380. With 8 flights you have alot more to work with, it gives you a later pickup time for your large customers and your able to sort over a longer time frame and still get the packages there on time. Fed Ex already has the aircraft to do this that fit into Fed Ex's existing fleet.
The same person stated that Fed Ex could bypass ANC from China. Is Fed Ex converting some DC-10s to KC-10 extenders?
The MD-10 was brilliant! Fed Ex got the DC-10's for hush kits thats all! then they modified them to two man crews with upgraded avionics (MD-11) equivelant. They have a ton of 10's sitting in the desert so lift isn't needed. I would have liked for them to invest the a380 money in the ground system (this would have had me worried) instead of an aircraft that has no proven performance figures or results.
The deal hasn't been signed yet has it?
The 777 freighter would be nice and Boeing is looking into it   but I feel that it would compete to close to the 747. I don't have any payload figures for a 777 but the passenger size is close between the two. The downfall for the 777 would be ETOPS though. Still a 777 would be great!

BTW why doesn't Fred Smith like Boeing?

FedEx ground service flat? I don't think so. It's only been in operation for a few months and volume is increasing daily. UPS Pilot sounds a little worried. As far as UPS going to China is concerned, FedEx has a decade of International shipping experience over UPS; as well as a vast network already in operation in Asia. When it comes to brand identification in Asia...UPS who? And why not the A380? FedEx is already more recognized in Europe than UPS, so it only makes sense that they go with a European manufacturer. It will only increase the popularity of FedEx in Europe. Sounds like a smart move by a forward looking company. By the way, FedEx Express service DOES service every address in America.

UPS, I now see what you're getting at. I understand fully, and I agree 100%. I'm still a little weary of this whole A380 thing, and I see no point in an aircraft that size. Is it set in stone that they're getting them??? I know they thought about getting a Beluga but don't think it went through (LOL, I hate that plane). A year or so ago, they leased two 747F's, but I don't know if they still have them. I think that was short term stuff.
I do think they should concentrate more on the MD-10 and get the whole fleet updated (yes, I'm partial).
As for getting KC-10's, I doubt that. They require more to convert.

Thanks!

P.S. Got another question for ya UPS. If I may ask, what a/c do you fly?

I was kidding on the KC-10  

If you remember Fed Ex also looked into the Concorde a while back.

Why would I be worried? Care to elaborate?

The only thing Fed Ex has had was DIRECT FLIGHTS to China. UPS has had a partnership with Sinotrans (PEKAIR) which is the largest shipping company in China since 1986! Sinotrans also is part of the Chinese Government. UPS just opened offices in an additional 40 cities in China to complement their existing 21 offices in 21 cities in China. Sinotrans uses UPS uniforms and UPS vehicles so UPS is known throughout China and Asia.

Why does everybody think I'm worried. If I was worried I'd be telling you all that Fed Ex has made a great decision.