FedEx Corp. (FDX: Quote) announced its decision to permanently retire from service 18 Airbus A310-200 aircraft and 26 related engines, as well as six Boeing MD10-10 aircraft and 17 related engines.
The majority of these aircraft are currently parked and not in revenue service. As a consequence, a non-cash impairment charge of $84 million, net of tax, or $0.26 per share was recorded in the fourth quarter, the company said.
These permanent retirements are in addition to five Boeing 727-200 aircraft retired in the fourth quarter of fiscal 2012 and the planned fiscal 2013 retirement of 21 B727 aircraft, which will be fully depreciated.
The company said its board declared a quarterly cash dividend of $0.14 per share on FedEx Corporation common stock, an increase of $0.01 per share over the previous dividend payment. The dividend is payable July 2, 2012 to stockholders of record at the close of business on June 18, 2012.
In response to the company's new fleet plans, FedEx Express said it is shortening the depreciable lives of the following aircraft and related engines: 31 additional Boeing MD10-10s, 18 additional Airbus A310s, four B727s and one Boeing MD10-30. This will accelerate the retirement of these aircraft to align with the delivery schedule for replacement Boeing 767-300 and Boeing 757-200 aircraft, the company said.
The accelerated depreciation on these aircraft is expected to total $196 million over the next three fiscal years with a partial offset from the avoidance of depreciation related to the retirements.
The company said its board declared a quarterly cash dividend of $0.14 per share on its common stock, an increase of $0.01 per share over the previous dividend payment. The dividend is payable July 2, 2012 to stockholders of record at the close of business on June 18, 2012.
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by RTT Staff Writer
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