Memphis-based FedEx is appealing a Department of Transportation (DOT) order to repay $29 million of the $101 million it received in “stabilization” aid from the federal government following economic aftershocks caused by the terrorist attacks of September 11, 2001. FedEx originally expected $119 million in aid, which it included in its 2002 earnings report.
DOT determined that FedEx was only entitled to $72 million of compensation under the Air Transportation Safety and System Stabilization Act. Though FedEx is appealing that decision, the company is taking a $48 million charge in its second quarter of fiscal 2005 in case its appeal fails, FedEx said.
The company stressed that the charge should not affect its earnings projections for its second fiscal quarter.