Dive Brief:
- FedEx is deploying spare aircraft and other contingency plans to minimize disruption as inspections of its grounded Boeing MD-11 fleet get underway, EVP and CFO John Dietrich said at Baird's Global Industrial Conference on Tuesday.
- Last week, FedEx and UPS halted the use of their MD-11 fleets at Boeing's recommendation following the deadly crash of an aircraft of that type used by UPS. The FAA also issued an emergency airworthiness directive on Saturday that prohibits flying the MD-11 until the airplane is inspected and corrective actions are taken.
- FedEx is leaning on its ground transportation capabilities domestically and commercial airlift partners to limit disruptions, Dietrich said, adding that the carrier could also adjust the routine maintenance schedules of its other aircraft if needed.
Dive Insight:
FedEx President and CEO Raj Subramaniam said at the conference that he met with senior executives at Boeing on Monday amid the halt. The company is "working with the regulators to get through this period as quickly as possible, putting safety above all," he added.
MD-11 inspections officially began Wednesday, TD Cowen analysts said in a research note, citing FedEx management. FedEx has 28 MD-11 aircraft in operation, 18 of which are used in the company's domestic network, Dietrich said.
"If it passes that inspection and [is] released, those aircraft will start to get back into the fleet on a one-off tail-by-tail basis," Dietrich said. "It's not like we're waiting for the whole fleet to be inspected before concluding whether they can safely go back into service."
Although MD-11s are used in FedEx's domestic network, they also make regular visits internationally to locations such as the company's South China hub, Tokyo, Shanghai, London and Osaka, supply chain-focused advisory firm Cirrus Global Advisors said in a LinkedIn post. UPS focuses its MD-11 fleet on domestic routes, which the firm said are easier to replace with other aircraft than international routes.
Overall, the grounding of the MD-11s "could have sizable impacts for air cargo" as the holiday shipping rush approaches, including potential limitations on FedEx and UPS' two-day air shipping services, according to Cirrus Global Advisors.
"We think UPS and FedEx will wait to see if this is a short term or mid-term fix to get the aircraft airworthy," the firm said. "Once this is better understood, we may see 2nd day air restrictions put in place with retailers for peak season."
Dietrich said the MD-11 groundings don't change FedEx's expectations for its second quarter results "and having both sequential and year-over-year improvement in Q2." FedEx's second quarter of the 2026 fiscal year ends Nov. 30.
