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Aviation Industry Updates: June 27, 2023

James Onieal : Jun 27, 2023 11:41:15 AM

Industry News Export

FedEx Downsizes As Revenue Falls

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FedEx plans to remove 29 aircraft from its fleet this year through permanent retirement and temporary storage, fulfilling its new program to eliminate permanent costs and make its logistics network more flexible as global trade slows.
CEO Raj Subramaniam said on Tuesday’s earnings briefing that the Express unit will park 20 aircraft in fiscal year 2024 and permanently retire nine additional MD-11 freighters. But the latest fleet statistics show the integrated logistics and parcel carrier’s mainline fleet will actually grow by 10 aircraft this year as Boeing planes ordered years ago are delivered.
FedEx Express retired 18 aircraft in the just-completed fiscal year, including 12 MD-11s, four Boeing 757-200s and two Airbus A300-600s. FedEx wrote off the $70 million book value of the planes plus 34 related engines in its fourth-quarter results.
FedEx began flying less in October as part of a corporate restructuring aimed at improving efficiency and reducing immediate costs as the downturn in shipping and e-commerce sales took hold.
Express revenues fell 13% in the fourth quarter, ended May 31, to $10.4 billion while operating income was halved at $430 million. Success in decreasing expenses and higher U.S. yields partially offset lower volumes and helped improve profits, which tumbled 64% for the full year. The aircraft retirements were a large component of the unit’s $1.1 billion reduction in operating expense. The company said Express package volumes declined 7%, an improvement from the third quarter.
Since fall, the company’s in-house airline has slashed dozens of daily flights from its schedule, accelerated the retirement of aging aircraft and deactivated other aircraft until demand picks up. Management has also indicated it plans to rely more heavily on partner airlines in the future instead of purchasing capacity itself to improve cash flow and prioritizing owned aircraft for parcel shipments over heavy freight, which will be moved more by third parties.

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DOT Silence On SkyWest Charter App Is The Sound Of The Canary In The Coalmine

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The City of Dodge City called a media conference with SkyWest Airlines Chief Commercial Officer Wade Steel this month. They spoke with media and airport managers from under served regions ready to meet the needs of a post-Pandemic travel surge that has failed to launch if not, but for, the silence of Department of Transportation Secretary Peter Buttegieg.
He could have granted commuter authority for the SkyWest Charter a year ago, when SkyWest Charter submitted a request in good faith.
“SkyWest Charter seeks to carry out the stated mission of the DOT, as listed above, in 39 states that represent more than 70 rural communities where no other airlines can, or will, serve,” Steel said.
The DOT’s inaction has created a critical situation for air passengers who simply want to get the heck out of Dodge City without their flight being canceled Director of Public Works Corey Keller said.
“Reliable and safe air transportation is critical to our local economies,” he said. “It allows us to attract and maintain business, visitors, and even access medical services. Unfortunately, airports like ours have been losing service as airlines across the country as the industry struggles with an acute lack of pilots, particularly captains.”
The Airline Pilots Association (ALPA), the largest pilots’ union in the United States, has used this time to punch down on SkyWest Charters and outright deny the pilot shortage even exists.

Dodge City Global News

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1,600+ Flights Canceled, Thousands More Delayed Amid Stormy Weather In Northeast

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More than 1,600 U.S. flights have been canceled and nearly 5,800 more have been delayed as of 5:00 p.m. ET Monday, according to flight-tracking website FlightAware.
Strong weather moving through the Northeast, especially around New York, seems to be behind most of the issues.
The Federal Aviation Administration warned that flying in the New York metro area could be a little more chaotic this summer with fewer air traffic controllers available to handle flights than needed. As a result, airlines were preemptively asked to reduce their schedules in an effort to reduce the strain on the system.
Even still, when summer storms hit, flights are often delayed. That leaves planes out of place and the controller shortage could contribute to longer recovery times.

USA Today

U.S. Facing ‘Real Risk’ of Major Flight Delays and Cancellations Due to 5G Deadline

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In a new interview with the Wall Street Journal, Transportation Secretary Pete Buttigieg said that there is a “real risk of delays or cancellations” because of a lack of compliance with the upcoming July 1 deadline for aircraft to be compliant with new 5G rules.
“This represents one of the biggest—probably the biggest—foreseeable problem affecting performance this summer,” Buttigieg said in the interview.
Airlines were required to retrofit their aircraft equipment ahead of the July 1 deadline, a date when U.S. wireless companies will boost their 5G service to higher power levels, which could cause some potential interference. Aircraft that aren’t updated will not be allowed to land in certain weather conditions after that deadline.
The size of the impact depends on two factors—the percentage of airlines that were able to retrofit their aircraft and the potential of bad weather. Some airlines, according to the WSJ, said that they don’t expect to have issues as either they have already updated equipment or are ready to plan around restrictions on aircraft that haven’t been updated. United Airlines, for example, said all of its mainline planes are ready.
Still, some may, including Delta Air Lines, which told the WSJ that supply-chain roadblocks have made it difficult to update its entire fleet by July 1, and JetBlue, which said that it will have its fleet completely updated by October and may see a “limited impact” on low-visibility days until then.

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