FedEx exercises options on 15 777Fs

FedEx exercised options on 15 777Fs valued at $3.75 billion, bringing its firm backlog for the type to 30, and took options on an additional 15.

The delivery giant originally ordered 15 777Fs plus 15 options in November 2006, when it cancelled an order for 10 A380Fs owing to Airbus production delays on the now-suspended large freighter program (ATWOnline, Nov. 8, 2006).

It already had pushed back deliveries of the original 15 777s from one to 18 months, with the first to arrive in September 2009, at least two months later than originally planned. Three will be delivered in this calendar year instead of a previously planned four and five will be delivered in 2010 instead of eight, followed by three in 2011 and four in 2012. Deliveries of the newly ordered aircraft are slated for 2013-18.

Boeing now has firm orders for 88 777Fs, for which FedEx is the largest single customer. FedEx said in a regulatory filing that the 15 exercised options will increase capital expenditures by $2.75 billion over the next decade, indicating that it has reached an agreement with Boeing to purchase the aircraft collectively at $1 billion below list prices.

The carrier plans to use the aircraft for direct long-haul flights between major markets in the US, Europe and Asia.