MAX KINGSLEY-JONES / LONDON
FedEx Express has U-turned on an agreement to purchase Swissair's entire Boeing MD-11 fleet as part of efforts to rein-in capacity growth.
The US express parcel operator agreed in 1998 to acquire Swissair's 15 Pratt & Whitney PW4000-powered MD-11s, as well as four LTU aircraft that the Swiss carrier was purchasing. The 19-strong fleet, owned by Swissair leasing arm Flightlease, was originally due to leave the fleet between August next year and December 2006 as new Airbus A340-600s were delivered to replace them.
Although the A340 order is effectively cancelled, it is understood that the disposal of at least some of the MD-11s was still planned.
According to industry sources, FedEx, which has 36 MD-11s in service, tried to defer the Swissair acquisition earlier this year due to the slowdown in the cargo business, and the Swissair bankruptcy in October gave it the opportunity to terminate the agreement, as it was an event of default under the forward purchase agreement. It is understood, however, that FedEx would still be interested in acquiring the aircraft if deliveries were pushed back by two to three years.
The US parcel carrier began cutting capacity growth plans in mid-year, primarily with a decision to curtail an MD-10 conversion programme and deferring delivery of Airbus A300s (Flight International, 3-9 July). Flightlease confirms that the deal has been "suspended", but says "negotiations are ongoing and we can't speculate on the outcome".
The MD-11s will remain in operation throughout the airline's winter schedule, says Flightlease, but beyond that their fate is unclear, as the future long-haul needs of the revamped Swissair when it is integrated into Crossair are not finalised. "It is up to the new airline to determine which aircraft it wants to continue operating, and negotiations are currently under way," says Flightlease.
It is understood that the ownership of the MD-11s reverts from Flightlease to banks which finance the aircraft, and the two entities are working together to shore up a long term plan for the aircraft.
Source: Flight International
