FEDERAL EXPRESS DELAYS OPENING SUBIC BAY HUB FACILITY; Dispute with Japanese Government Causes Delay.

MEMPHIS, Tenn.--(BUSINESS WIRE)--June 14, 1995--Federal Express Corporation (FedEx) today announced a 30-day postponement of the official opening of its Subic Bay Transshipment facility in the Philippines from the original target date of July 3, 1995. This action was forced by the Japanese government's decision not to abide by the terms of the bilateral aviation agreement between the United States and Japan.

The bilateral agreement, signed in 1952, governs air cargo traffic in certain markets where the two countries' airlines compete. Under this agreement, both governments are required to accept within 45 days after filing schedule changes by those carriers designated to serve the points permitted under that agreement. The Japanese government has now claimed that FedEx's new Subic flight schedule -- which is integral to FedEx's intra-Asian network -- requires Japanese government approval.

In response, Kenneth R. Masterson, FedEx's Senior Vice President, General Counsel and Secretary, noted "This action of the Japanese Ministry of Transport clearly violates the terms of the treaty as interpreted by the U.S. Department of Transportation in October 1993 when it approved FedEx's complaint against the government of Japan." Regarding a claim by the Japanese government that approval of FedEx's Subic schedule would disadvantage Japanese carriers in the Asian market, Masterson noted, "Even if that were correct, the government of Japan's action remains a breach of the bilateral agreement. But in that regard, it should be understood that Japanese cargo carriers have increased their intra-Asian capacity by 57% since May 1989, while during the same period U.S. intra-Asian freighter capacity decreased by 33%."

"After FedEx implements its Subic schedule, the company's capacity in that region will still be only 71% of the capacity operated in that region by Flying Tigers in 1988, when it was acquired by FedEx," Masterson said, adding, "There is not a single point in the Subic schedule that has not been served before by FedEx or Flying Tigers, with the exception of China, which would be served under the Evergreen authority which FedEx purchased earlier this year."

According to Joseph C. McCarty, Senior Vice President of the Asia and Pacific Region, "Federal Express has made a significant investment in building its intra-Asian network and remains committed to continuously enhancing the service we offer to our Asian customers. This is a very important issue for us and we will continue the on-going preparations for our Subic operation, as well as training our employees in the Philippines in preparation for the opening of our Philippines center." "FedEx has also become integral to boosting the Asian economy, since our time definite delivery service helps some of Asia's biggest industries- -- technology and fashion -- maintain their just-in-time delivery strategies," said McCarty.

Federal Express has been providing express service in Asia for more than 10 years. Its network, which utilizes widebodied jets, provides daily service to nine cities: Tokyo, Singapore, Osaka, Subic, Penang, Taipei, Hong Kong, Manila and Seoul. The Asia network is connected to Federal Express's worldwide network serving North America, Latin America, and Europe. FedEx employs more than 3,000 in Asia, including more than 230 employees and 60 pilots in Subic.

Federal Express is the world's largest express transportation company, providing fast and reliable services for nearly 2.4 million items to over 200 countries each working day. The company has more than 109,000 employees, 496 aircraft, 35,000 vehicles and 130,000 Powership(R) and FedEx Ship(R) shipping systems in its integrated global system. Federal Express reported revenues of $8.5 billion for its fiscal year ended May 31, 1994.

CONTACT: Federal Express

Shirlee Finley, 901/395-3463

Lynnette McIntire/Asia, 011-852-2514-0820