FedEx (NYSE:FDX) is putting some of its oldest planes out to pasture. The company announced plans to retire 400 aircraft and engines from its aging fleet. FedEx said that the move was aimed at increasing fuel efficiency and lowering maintenance costs. But that's not the whole story.
In the video below, Fool contributor Demitrios Kalogeropoulos argues that these aircraft retirements are necessary to bring FedEx's expenses closer to those of its more efficient rival, UPS (NYSE:UPS). Also, he says, FedEx needs to shrink its fleet to account for falling demand for deliveries to and from Asia. In the end, this quickened pace of modernizing its fleet should serve FedEx well, but it's no game-changer for the business or the stock.
Fool contributor Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends FedEx and United Parcel Service. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.