FedEx Expects $175M Hit for Grounded MD-Eleven Fleet
Update: 2025-12-19
Description
FedEx anticipates spending $175 million to replace grounded MD-Eleven cargo planes, impacting their second fiscal quarter earnings. Despite this, they reported strong earnings due to solid package volumes and cost-saving efforts. The grounding reduced their adjusted operating income by $25 million. FedEx quickly implemented contingency plans to minimize disruptions, including using larger aircraft and increasing domestic trucking. They expect more significant financial challenges in the second half of the fiscal year, particularly in the third quarter, due to high demand during the holiday season and year-end deadlines.
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