I have several articles featuring the history of FedEx in my aviation library from Airliners, Airliner World and Airplane magazine but only one of these mentions Federal Express' dalliance with the Baby Boeing. Similarly, although the careers of the frames in questions are documented there is little information concerning the reason why FedEx purchased or acquired them.
Frederick W. Smith’s Federal Express took to the air in April 1973 using a fleet of Dassault Falcon 20s but even though after a difficult first few years the cargo concept had proved itself profitable by 1976 it was the deregulation of the air carrier cargo market in 1977 that really gave Federal Express the chance it needed. The passing of the Public-Law 95-165 allowed the usage of larger aircraft with no geographic restriction on their usage.
This deregulation was of course something that Smith and Federal Express had been lobbying for. By 1975 the business model was proving a success and the little airline applied to the CAB for an exemption for it to operate five Douglas DC-9-15s. Although the application had the support of the Department of Commerce, Justice and Transportation it was unsurprisingly not welcomed by existing cargo airlines and no less then 16 certified cargo carriers opposed it.
This led to the inevitable failure of the application in December 1975. Nonetheless, the hole in the dyke could not be plugged and the continuing pressure from Federal Express was key in the eventual deregulation of the cargo scene, a year earlier than deregulation of the passenger market.
Federal Express seized the opportunity and began to pickup second-hand Boeing 727-22s from United Airlines. Initially seven were bought with an option on another six. Nine arrived in 1978 registered from N101FE to N109FE. The 727s could carry five times the freight of the Falcons. Further deliveries continued into 1979 with three more 727-22s added plus a pair of 727-116s originally delivered to Lan Chile. The first 727 service was between the Memphis hub and Los Angeles on January 30, 1978. Gradually the 727s replaced the Falcon 20s on core routes to San Francisco, Newark, Boston, Chicago, Minneapolis, La Guardia and Baltimore all within 1978.
The 727s proved ideal and deliveries continued into 1980. These were the first of 20 ex-Eastern Air Lines Boeing 727-25s. By this time Federal Express was growing at a massive rate (c.40% a year) and had the cash to buy new and not just second-hand aircraft. It is here that its association with the 737-200 came into the picture as in October 1978 it ordered four new Boeing 737-200 Combis with options on a further four.
It is interesting that the 737-200s were Combis and not pure Freighters. Federal Express was interested in the concept of using the aircraft not just for freight operations but also for passenger services during the day, flying out of Chicago Midway. Certainly, the aircraft kept a full complement of passenger windows. It seems likely that with deregulation of the air passenger market Fedex saw an opportunity to get maximum usage out of the new 737s but for whatever reason the services were never begun.
Possibly the bloodbath deregulation created and the early 80s economic downturn were enough to dissuade Federal Express from starting up in the highly competitive and unfamiliar passenger side of the aviation business? The early arrival of Midway Airlines may also have been a factor.
The first 737-2S2C arrived as N201FE on August 29, 1979. For some reason N202FE was skipped and N203-N205FE joined by mid-October. A fifth aircraft was added on lease from ILFC as N206FE and was accordingly a 737-2Q8C. With the proposed passenger services a no-go the 737s were something of an oddball in the fleet, which was accruing 727s at an impressive rate.
The 737s remained in service for only fifteen months or so and were withdrawn from January to March 1981. There are few pictures of the aircraft in FedEx colours. By this time Federal Express was thinking big and had begun to acquire widebodies in the shape of four ex-Continental Airlines McDonnell Douglas DC-10s. The leased ILFC 737 went to Alaska Airlines in January. One of the 737s saw a lease to the charter airline Sun Land Airlines from May to August but then was sold on, along with two others to the Saudi oil company ARAMCO between October and December. The other aircraft joined Lan Chile as CC-CHU in March.
Federal Express was none the worse for wear due to its dalliance with the 737-200. It upsized to new Boeing 727-200Fs, of which it ordered 15 new from Boeing for delivery in 1983 and 1984 – the last 727s off the line. No further 737s have ever joined the core Federal Express fleet although several 737-400s and a single 737-800 have been operated in FedEx colours by affiliated airlines in Europe since 2018.
I'm Richard Stretton: a fan of classic airliners and airlines who enjoys exploring their history through my collection of die-cast airliners. If you enjoy the site please donate whatever you can to help keep it running: