Analyzing FedEx Express Airlines Case Study

Excerpt from Case Study :

FedEx Express Airlines (Case Study)

In this case study, we will be looking at FedEx Express's hub airports. The airports will include Memphis International Airport (MEM) and Indianapolis International Airport. The focus will be mainly on capacity, traffic, and what is planned for the future of these airports.

FedEx Corporation is one of the largest companies in the courier industry. The company is renowned not just nationally in the United States, but internationally. FedEx Corporation belongs to the parcel service industry segment. The size of the industry segment is quite large in the sense that in the past fifteen years or so, consumers in America have spent beyond fifty billion dollars in shipping packages, parcels and also letters. Also referred to as Federal Express, the company is a big player in the segment and is positioned as one of the trailblazers in the industry segment (FedEx Corporation, 2014). The following paper will analyse two of the major hubs for FedEx Express and analyse their airport space and capacity level and also take into consideration their plans for forthcoming periods.

Memphis International Airport (MEM)

Memphis International Airport serves as a hub for FedEx Express. It employs the hub-and-spoke model and is one of the largest integrated carriers in the world. In particular, FedEx runs its central air hubs in Memphis. Memphis International Airport (MEM) has a multi-modal level of access. It is positioned towards the south of Memphis, Tennessee, at the junction of Interstates I-55 and I-240. The site is also aided by rail, fleeting through the north east of the airport, not more than one mile from FedEx's amenities, and by ship, with the Mississippi River solely 8 miles from the airport. Memphis International airport occupies a 5100-acre site with 3,900 acres hosting the cargo hubs for FedEx (Cosmas and Martini, 2007).

Primary passenger right is to use courses from Winchester Road to the terminal building, at the epicenter of the airport site. Winchester Road intersects the airport into north -- south expanses. The northern section is engaged predominantly by FedEx cataloguing facilities, member of staff parking, administration offices, and aircraft maintenance anchorages, in conjunction with R1, which is oriented east to west. The southern section principally consists of the passenger facilities, which consist of three terminal buildings, in addition to three runways, which are slanted towards north to south (Hao, 2015). MEM has four runways and the configurations of the four runways are listed:

1. R1: 9/27 orientation. 8,946 feet long by 150 feet wide. Asphalt material

2. R2: 18R-36L orientation. 9,320 feet long by 150 feet wide. Concrete material

3. R3: 18C-36C orientation. 11,120 feet long by 150 feet wide. Concrete material

4. R4: 18L-36R orientation. 9,000 feet long by 150 feet wide. Concrete material (Hao, 2015).

(Fig-1) MEM Airport Layout

In the recent number of years, the annual traffic in MEM airport has significantly declined. The international airport experienced a key stumbling block in the year 2008 after Delta Airlines merged with Northwest Airlines. In following and abiding by the ideologies of dismissed capacity and justification, Delta Airlines decided to drop MEM as a hub, owing to its closeness to Atlanta-Hartsfield. From 2013, MEM has experienced a significant loss in its passenger demand levels as Delta Airlines continues to reduce its flights to about forty every day (Hao, 2015). The following table indicates the annual traffic in the airport for every calendar year since 2000. As indicated the number of traffic declined from 11 million to about 4 million in the present day.

Traffic by calendar year

Year

Passengers

Change from previous year

2000

11,769,213

N/A

2001

11,340,439

3.64%

2002

10,712,059

5.54%

2003

11,033,269

3.00%

2004

10,442,181

5.36%

2005

11,039,077

5.72%

2006

10,806,754

2.10%

2007

10,896,305

0.83%

2008

10,532,095

3.34%

2009

10,229,627

6.37%

2010

10,003,186

2.21%

2011

8,737,641

12.65%

2012

6,753,186

22.71%

2013

4,598,186

31.91%

2014

3,597,601

21.76%

2015

3,758,450

1.04%

(Fig -2) Annual Traffic in MEM Airport

However, having four runways, MEM Airport continues to be the leading location for FedEx's hub, as it has good weather, is situated in the Central Time Zone, and sited optimally in relation to geography. The amount of traffic channelled via this hub make MEM the second busiest airport with regard to cargo traffic in the world, which has huge inferences on forthcoming necessities for growth and forecasts. With regard to…

Sources Used in Document:

References

CAPA. (2015). Prospects for Indianapolis International Airport look promising after good 2014 passenger growth. Retrieved 21 April 2016 from:http://centreforaviation.com/analysis/prospects-for-indianapolis-international-airport-look-promising-after-good-2014-passenger-growth-220204

Cosmas, A., Martini, B. (2007). UPS and FedEx Air Hubs: Comparing Louisville and Memphis Cargo Hub Operations.

FedEx Corporation. (2014). Annual Report. Retrieved from: http://investors.FedEx.com/files/doc_financials/annual/FedEx_2014_Annual_Report_v001_a00492.pdf

Hao, E. (2015). Overview of the Cargo Industry and Airports: A Case Study of Memphis International Airport. Retrieved 21 April 2016 from:https://www.wsiz.rzeszow.pl/pl/Uczelnia/kadra/klysenko/Documents/Case%20study%202.pdf

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