FedEx Corp. announced Friday that the United States Department of Transportation has demanded return of $29 million
the agency says it overpaid Fedex under the Air Transportation Safety and System Stabilization Act following the attacks of Sept. 11, 2001.
According to the Fedex release, the D.O.T. has determined that FedEx Express is entitled to $72 million of compensation under the Act, an increase of $3 million from its initial determination. FedEx Express had previously received $101 million under the Act; now the D.O.T. has demanded repayment of $29 million.
Some FedEx service was interrupted when air traffic was grounded during the days following the terrorist strikes. But Fedex remained profitable while many passenger airlines covered by the law are still struggling.
FedEx Express will vigorously contest this determination, the release said, and will continue to aggressively pursue its compensation claim. Fedex said it will record a charge of $48 million in its fiscal second quarter, representing repayment of $29 million to the D.O.T. and the write-off of a $19 million receivable. Should Fedex win its appeal, the appropriate amount will be recognized in that reporting period.