FedEx is returning its grounded MD-11 freighters to service before peak season, bringing back 29 of the 34 jets and retiring the other five. Spending up to $55 million in Q4 to revive an aircraft type it plans to phase out entirely by 2032 signals the carrier expects peak air cargo demand to justify the cost.
How we got here: A UPS MD-11F crashed during takeoff from Louisville in November 2025 after the left engine pylon separated. Fifteen people were killed. The FAA issued an emergency airworthiness directive, grounding all MD-11 and MD-11F operators within days.
FedEx pulled its fleet from schedules and spent months outsourcing lift at what CFO John Dietrich called “an expensive time of year to be getting outsourced lift to begin with.”
The NTSB traced the failure to fatigue cracks in the pylon's spherical bearing assembly, and Boeing developed a replacement bearing component.
The FAA lifted the grounding order after approving Boeing's return-to-service protocol, and FedEx resumed commercial flights. On its Q4 FY2026 earnings call, CEO Raj Subramaniam said four MD-11s had been fixed and were back in service, with the remaining 25 set to return before peak season.
The cost math: The grounding ran through three consecutive quarters.
Q2 FY2026: $25M reduction in adjusted operating income (partial quarter)
Q3 FY2026: $120M headwind to adjusted operating income (first full grounded quarter), according to CFO John Dietrich on the Q3 call
Q4 FY2026: Projected up to $55M additional headwind, guidance Dietrich issued on that same Q3 call for continued outsourcing and reactivation
Noncash charge: $23M in Q4 for 10 retired aircraft, including 5 MD-11s
Counting the Q4 guidance, the cumulative grounding cost runs toward $200 million across FY2026.
The carrier split: UPS permanently retired its MD-11 fleet, took a $137 million after-tax write-down, and steered toward Boeing 767-300Fs already on order. It is also shrinking its international air network following the Amazon volume exit.
FedEx went the other direction, expanding into non-parcel international freight and extending the MD-11's planned retirement from 2028 to 2032 as it chases more widebody capacity.
What's next: FedEx still has 25 of the 29 returning aircraft to bring back, and the NTSB's final report on the Louisville crash has not been issued. Investigators have documented that Boeing asked the FAA to extend the bearing inspection interval from 19,900 to 29,200 flight cycles even after five reports of the spherical bearing fracturing well short of the existing interval.
Air cargo spot rates were running at $3.40/kg in May, up 41% year over year according to Xeneta data. Those widebody routes are where every delayed MD-11 return represents lost revenue.
