FedEx Corp., the second-largest U.S. package-shipping company, agreed to buy 15 more Boeing Co. 777 Freighter aircraft and took an option for another 15 as it expands overseas deliveries, Bloomberg reported.
The accord will increase FedEx's capital spending by about $15 million in fiscal 2009 and a total of $2.75 billion over the following 10 years, according to regulatory filing today by the Memphis, Tennessee-based company. Based on the list price, 15 of the planes are valued at about $3.75 billion.
FedEx is buying more fuel-efficient Boeing 757 and 777 freighters as it increases international business and retires older jets. The new FedEx purchases increase Boeing's order book for the 777 freighter by more than 20 percent, said Doug Runte, an analyst at Piper Jaffray & Co. in New York.
"There really isn't a plane that does what this plane does in this space," said Runte. "It has the range and space of a three-engine plane, but with two-engine economics."
FedEx is the largest customer for Chicago-based Boeing's new model of the plane, which will be the world's largest and longest-range twin-engine freighter aircraft once it enters service. It will have capacity to carry 27 pallets on the main deck and 10 in the lower hold, and extra space for bulk cargo, according to Boeing's Web site.
FedEx said today that four 777s will be delivered in each of fiscal 2010 and 2011, with three annually in the subsequent years. The order is also a win for General Electric Co., which is the only company that makes engines for the plane, Runte said.
Today's order is from an option FedEx took in November 2006, when it also agreed to buy 15 of the 777s. If FedEx exercises the option it took today, that would bring its total purchases of the freighter to 45.
FedEx fell 1 cent to $60.31 at 4:01 p.m. in New York Stock Exchange composite trading. Boeing fell 71 cents to $43.74. The order was announced after the close of regular NYSE trading.