Pilots Still Working Under an Outdated Contract Despite Positive

FedEx’s recent earnings call was optimistic… a little too much so. The unexpectedly high revenue leaves the carrier’s pilots, still operating under a nearly decade-old contract, wondering when it’s their turn to reap the benefits of business growth.

On June 24, FedEx reported a 1% revenue increase and an 8% rise in adjusted operating income over the same period last year. Adjusted operating margin improved by 60 basis points. The company also returned $4.3 billion to shareholders via buybacks and dividends, all while boasting about the success of its cost-cutting and network optimization initiatives. That includes hitting a $4 billion savings target and announcing plans to cut another $1 billion this year.

All of this has occurred while FedEx pilots, represented by the Air Line Pilots Association (ALPA), continue working under a contract signed in 2015. Contract negotiations began in May 2021 and have dragged on for nearly four years and counting, remaining under federal mediation with no end in sight.

“As FedEx accelerates its transformation strategy, outward financial projections may appear optimistic, but internal warning signs tell a different story,” wrote ALPA chairman Capt. Jose Nieves. “Chief among them is the sidelining of core personnel, particularly FedEx pilots – professionals who have long been central to FedEx’s operational success.”

A tentative agreement reached in May 2023 included a 30% raise and pension improvements, but a majority of pilots rejected it just two months later. Since then, talks have resumed under the National Mediation Board, but ALPA leaders say FedEx has shown little willingness to move beyond its previous offer.

FedEx has stated it remains committed to reaching a fair deal through mediation. ALPA, however, argues the company’s cost-cutting focus and lack of progress on key issues like pay, retirement, and job security are undermining the process… particularly as rival carriers have inked more favorable pilot contracts since 2021.

“We’ve enjoyed a synergistic relationship in the past and we look forward to closing a deal that reflects a beneficial future, together,” Nieves continued.

FMI: www.fedex.com