Uncategorized - Tuesday, November 7, 2006 14:40 - Comments

FedEx dumps Airbus A380, flocks to Boeing

It’s hard to imagine a worse collapse of confidence in product delivery than the one that Airbus is experiencing lately. Not only has its white elephant A380 been delayed numerous times, forcing huge management restructuring, but now major aircraft buyers are canceling their orders and shifting their buying power to Boeing. FedEx is the 1st major that I’ve seen, but I’m sure there will be more:

The world’s largest express transportation company cited Airbus’ production delays and said in a statement that its FedEx Express unit has ordered 15 Boeing Co. 777 freighters with a list price of $3.5 billion and taken options on an additional 15.

Source: FedEx drops A380 order, buys Boeing 777s - Yahoo! News

Being a frequent traveler, I’ve been a big fan of the 777, from a passenger perspective. It seems to be the right size for a jumbo - not too many people crammed in, and the ability to travel great distances with reasonable luxury. Earlier this month Boeing announced a modified 777 that would be capable of traveling from any one point on earth to another point on earth non-stop. I suspect this makes it even more attractive for FedEx, reduced stops leads to greater efficiencies.

From a passenger perspective, last year I took an American Airlines 777 non-stop from Chicago O’Hare to New Delhi. Just a few years ago that would have been unimaginable, but the 777 (and some changes in overflight laws across the former Soviet Union) have made it a reality. While spending 15+ in flight is not something I look forward to, being able to ‘jump’ from the US to India in one shot is unbelievably convenient. I’m sure the FecEx pilots that move cargo all around the world will prefer this approach as well.