FedEx signs deal for 50 additional Boeing 767-300 freighter

Gloabal cargo giant FedEx Corp has signed a deal for acquisition of 50 additional Boeing Co 767-300 freighters in the biggest order ever for the plane, which would allow the aircraft maker to extend its production well into the next decade.

The deal, announced in a statement by the US cargo operator included options for another 50 767Fs, is valued a $9.97 billion at list prices. Customers get an undisclosed discount off the list prices under the normal course.

According to FedEx, the aircraft would be delivered by Boeing for its FedEx Express arm over the fiscal years 2018-2023.

With the latest deal, FedEx's orders for 767Fs stand at 106 and takes forward the company's fleet modernisation drive.

"Acquiring additional 767F aircraft...will enable us to reduce structural costs, improve our fuel efficiency and enhance the reliability of our global network," David J Bronczek, president and chief executive officer of FedEx Express, said in the statement.

The air cargo business had remained soft as against the general aviation business since the 2008 global financial crisis. Weak demand, overcapacity and competition from the belly space of passenger planes had hit yields and cut the need for dedicated freighters.

According to commentators, the order would give new life to the 767, which was developed in the 1980s and pioneered long-range flights for twin-engine jets.

FedEx Express, the world's biggest cargo airline, continues with the 767 as passenger carriers shift to newer aircraft such as Boeing's 787 Dreamliner and Airbus Group SE's A330.

''We appreciate their confidence in the airplane,'' Doug Alder, a spokesman for Chicago-based Boeing, said Tuesday in an e-mail.

The aircraft would be delivered over a five-year period starting in fiscal 2018, according to a statement from Memphis, Tennessee-based FedEx. The transaction included options for an additional 50 aircraft.

For Boeing, the deal comes as a victory over rival Airbus as the market for wide-body aircraft continues to be tough as it works on commercial versions of the 767.

Meanwhile, FedEx said it was taking forward its strategy of replacing older, less fuel-efficient planes such as the tri-engine MD-10 with new models .