FedEx Pilots Reject New Labor Deal That Would Raise Pay By 30%

By Eric Kulisch of

FreightWaves

The Air Line Pilots Association reported Monday that FedEx Express pilots rejected a tentative contract amendment which would have seen their pay increase by as much as 30% over a five-year period.

The deal was defeated by a margin between 57% and 43%. FedEx employs approximately 6,000 pilots. FedEx and the union will have to develop a new labor agreement.

"Our members have spoken, and we now will regroup and prepare for our next steps. The FedEx ALPA will meet in the coming weeks to set a timeline of evaluating pilot group priorities going forward. FedEx Pilots are united and this will lead to a new direction that will produce an agreement all FedEx Pilots will be proud of,' stated Capt. Chris Norman is the FedEx ALPA Chair.

FedEx stated that the results of the vote on a tentative agreement had no effect on its service. It continued to deliver for customers all over. The parties will resume negotiations under the supervision and guidance of the National Mediation Board. FedEx is disappointed by the results of this vote, but will continue to negotiate in good faith with its pilots in order to reach an agreement fair to all FedEx stakeholders.

This vote increases uncertainty for FedEx in a period of increased labor activism after the COVID epidemic. Before union negotiators came to an agreement on a new contract May 30, pilots authorized union leadership in order to start a strike vote. UPS is preparing for a possible 340,000 Teamsters strike that could start on August 1 if both sides fail to reach an agreement this week.

UPS pilots are walking off in solidarity

UPS drivers, warehouse workers and parcel carriers.

Pilots who voted no on the FedEx agreement complained of weaker job protections and back pay. They also complained that their pay raises were lower than those at Delta Air Lines and United Airlines.

FedEx Express cut $700,000,000 in costs annually from its air network over the last year. This is part of a corporate transformation strategy to reduce inefficiency, and save $4 Billion per year through consolidation. This decision was made due to a sharply reduced shipping demand, and investor concern over lower profit margins. FedEx has also begun to retire older aircraft faster and temporarily park others due to the decline in air volume.

The management has stated that it intends to make the air networks leaner. This includes substituting truck services on certain connecting routes in order to consolidate and increase aircraft loading factors. It also plans to rely more on outsourced air transportation, particularly for heavyweight freight, routes with fluctuating demands, and deferred parcels. The company will also close some pilot bases as well as its Los Angeles maintenance facility.

FedEx Express could have placed more work with third-party carriers during surge periods without paying a greater penalty. However, many pilots were concerned about the language that would prohibit outsourcing if FedEx reduced flight hours or forced pilots to furlough. FedEx currently pays a financial fine to the union, which is then distributed to the pilots when the company exceeds the cap agreed upon for the amount of shipments that can be sent to charter airlines. Opponents were concerned that FedEx would not be able to replace retiring older pilots and instead claim the need to hire other carriers to meet demand.

The hiring last week of John Dietrich, former Atlas Air CEO and FedEx chief financial officer has added to the concern. Many online chatters accused Dietrich of undermining Atlas Pilots by purchasing another cargo airline that offered weaker benefits to pilots and shifting work to them until years later when they merged. The majority of Atlas Air Pilots were

Unhappy with the amended 2021 contract

Arbitration forced them to accept terms that they did not like.

Many members thought that the retroactive recovery pay for the last 18 months, since the contract became changeable, was also too low. They disagreed with how the union calculated inflation.

The pilot contract also included a 30% raise in the legacy pension, and a replacement pension funded by the company. ALPA was very vocal in its push for ratification. They argued that the deal represented a significant investment per capita, and raised the bar significantly on pilot retirement.

The vote was an affront to the leadership of ALPA and the Master Executive Council made up by officers from the Pilot Group. On pilot forums, some pilots praised the result and called for union representatives to quit. The opposition has a common theme: the Master Executive Council pushed hard to get the deal passed, using the fear of job loss.

We will not vote for concessions. CloudSailor, a pilot known as CloudSailor, said, 'Not after Covid and not after the executives who have squeezed out $Billions through stock buybacks. Not after our daytime passenger brethren from much less profitable airlines are ratifying industry-leading contracts that don't require special math.

Other pilot groups have completed new labor agreements successfully.

Delta Air Lines pilots signed a contract in March that will increase their pay by 34% over the next four years. United Airlines pilots agreed on a preliminary package a week ago that included pay increases up to 40.2% in four years.

American Airlines increased its offer last week

For a new contract with pilots, the amount will be increased by over $1 billion in order to match United's deal regarding wage scales and benefits. The original American contract gave pilots a 40 percent raise over a four-year period.

Hawaiian Airlines Pilots

Amerijet, a cargo-only operator, has also signed contracts

Pilots have seen large increases in their pay.