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March 7, 1996

FedEx Appoints Beijing Aviation Ground Services as a Ground Operator in China

Hong Kong, March 7, 1996 -- Federal Express Corporation (FedEx) announces the appointment of Beijing Aviation Ground Services Company, Ltd. (BGS) as the company's ground operator in Beijing. BGS begins FedEx service in March as FedEx launches its inaugural flights using FedEx aircraft and crews between the US and China destinations.

FedEx recently received permits and licenses from both the Civil Aviation Administration of China (CAAC) and the US Department of Transportation (DOT) to operate an all-cargo route purchased from Evergreen International Airlines, Inc last year. With this approval, FedEx becomes the sole US-based all-cargo carrier with aviation rights to China.

"We selected BGS because they will further improve our service significantly," Brooke Harwood, FedEx's managing director and general manager of China, said.

"A team from the headquarters of FedEx in Memphis came and evaluated several ground handling companies. This team incorporated a tough set of standards, and BGS exceeded all expectations."

BGS is a joint venture company between Beijing Capital International Airport (BCIA) and Singapore Airport Terminal Services Pte Ltd (SATS). BCIA is the airport authority in Beijing, and SATS is a fully-owned subsidiary of Singapore International Airport (SIA). BCIA provides service at Beijing Capital International Airport and is responsible for charting its future as a major aviation hub in China. SIA has over 40 years of experience as the major ground handling service at the Singapore Changi International Airport.

Established to provide a comprehensive range of ground handling services, BGS caters to the needs of both domestic and international carriers.

Under the arrangement with FedEx, BGS will be responsible for all load control and documentation, all loading and off-loading of aircraft, aircraft and ramp handling, aircraft line maintenance, and aircraft cleaning. BGS is initially only servicing one express carrier -- FedEx. Its 4,500 square meter cargo terminal, with a capacity of 30,000 tons per annum, is well- equipped to handle different types of cargo.

As standard practice with all employees and suppliers, FedEx is providing extensive training for BGS employees. It will also involve BGS in all programs to fulfill ISO 9001 Total Quality Management (TQM) standards in China. These standards have already been awarded to FedEx for its global operations.

This agreement with BGS represents one of the many strategies FedEx is employing to strengthen both its services and its commitment to the China market. FedEx earlier appointed EAS International Transportation Ltd (EAS) as a global service participant (GSP) for China. With a network stretching across 34 major cities in China, EAS enables FedEx to provide services for approximately 50 per cent of the Chinese population, covering most of the major centers of finance and commerce.

Initially entering the China market in 1984, FedEx's operations were further enhanced in 1994 when it became the first express transportation company to be linked electronically with China Customs. This now means that information, in many cases, can be transmitted to customs authorities in Beijing and Shanghai before shipments actually arrive at the airports.

"Long-term plans for the China market include adding service destinations, with the total cities directly served in China expected to reach 59 by June 1996. Ultimately, we are looking at linking the US-China service to FedEx's FedEx AsiaOne network," Mr Harwood adds.

The FedEx AsiaOne network, launched in September 1995, connects 11 major commercial and financial centers in Asia, and provides unparalleled intraAsian overnight delivery, using the company's Subic Bay hub in the Philippines. FedEx AsiaOne fully integrates Asia into FedEx networks around the world.

FedEx currently services the Asia Pacific market with nearly 3,000 employees serving more than 30 countries and territories. The company provides the most extensive trans-Pacific air lift of any major competitor. Operating its own wide-bodies MD-11, DC-10 and A310 aircraft, FedEx offers 150 flights per week to Tokyo, Osaka, Hong Kong, Kaohsiung, Taipei, Seoul, Singapore, Kuala Lumpur, Penang, Manila and Subic Bay.

On a global basis, FedEx serves more than 210 countries, providing fast and reliable services for approximately 2.4 million items each working day. The company has more than 119,000 employees, over 500 aircraft, 37,000 vehicles, and nearly 180,000 Powership^® and FedEx Ship^TM automated shipping systems in its integrated global network. Federal Express reported revenues of US$9.4 billion for its 1995 fiscal year.