FedEx FDX recently announced that it entered into a long-term air freight partnership with Atlas Air Worldwide Holdings’ AAWW subsidiary Atlas Air. The deal is aimed at boosting air cargo capacity during the peak shipping seasons.
Per the deal, which is a huge positive for the air freight sector, Atlas Air will provide FedEx with two 747-400 freighter aircraft on a full-time aircraft, crew, maintenance and insurance (ACMI) basis. The 747-400 freighters are helping FedEx support its growing express and e-commerce network. Both freighters already came online and are flying on behalf of the Memphis, TN-based package delivery company.
The new deal between the companies is in addition to the existing multi-year peak season contract that provides FedEx with a minimum of five jets during the fourth quarter. Atlas Air Worldwide’s president and CEO John W. Dietrich was visibly delighted with the development and said: “We are pleased to grow our long-term relationship with FedEx. This agreement reflects the continued strong demand for airfreight capacity, particularly in the express and e-commerce markets.”
The deal with Atlas Air comes close on the heels of FedEx’s first-quarter fiscal 2022 results. The company reported lower-than-expected earnings per share due to escalating costs and supply-chain disruptions. The same headwinds are responsible for the company lowering its earnings outlook for fiscal 2022.
Zacks Rank & Stocks to Consider
FedEx currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Transportation sector are Schneider National SNDR and Matson MATX, each sporting a Zacks Rank #1 (Strong Buy), presently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Schneider National and Matson have increased 43.7% and 10.7%, respectively, year to date.
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FedEx Corporation (FDX) : Free Stock Analysis Report
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