FedEx to boost Iceland operations from 2020, inks deal with Icelandair Cargo

December 26, 2019: Effective 2020, Icelandair Cargo will handle all FedEx and TNT shipments to and from Iceland, as per the three-year deal the carrier has signed recently with the US-based courier company. Having acquired TNT in 2016, FedEx is merging the former express services provider’s operations within its own and is also looking to expand its operations in Iceland.

The agreement will support FedEx in its goal of expanding operations in Iceland, a statement issued by the carrier said. Meanwhile, Icelandair will make some rearrangements to its European schedule, the most significant of which involves adding flights to one of FedEx’s main European hubs at Liege. Icelandair will fly seven times weekly to Liege and three times weekly to East Midlands Airport in the United Kingdom.

Icelandair’s cargo division received a significant boost from the addition of B767 passenger aircraft to its fleet, the carrier said. It now has four B767s in its fleet, the first of which joined the fleet more than three years ago. The company estimates its 2019 cargo handle totals about 50,000 tonnes, about 60 percent of which is carried via its passenger aircraft.

“The service from Icelandair’s base at Reykjavik to Liege is also expected to support European cargo operations following the Brexit,” said Gunnar Már Sigurfinnsson, Icelandair Cargo’s managing director in the statement.

“With Brexit being imminent there are opportunities for increased flights to mainland Europe, as large shares of marine products that were flown to the UK were forwarded to the mainland within the same day,” he said. “More flights to Belgium ensure that exporters have a safe route to important markets in Europe.”

FedEx Express recorded asset impairment charges of $66m related to the permanent retirement of 10 A310-300 and 12 related engines. It will retire another 29 aircraft over the next 30 months.

During fiscal 2020, FedEx Express will make further network capacity changes by reducing flight hours by around 8 percent, the statement said.