In an August 6 letter to Airbus CEO Guillaume Faury, Air Line Pilots Association (ALPA) president Jason Ambrosi urged the manufacturer to reconsider its proposal to reduce cockpit crew from two to one from entering the commercial aviation environment.

• READ MORE: Airbus, Avincis to Explore Europewide Electric Air Taxi Operations

Ambrosi cited the recent CrowdStrike cybersecurity incident as an example of the risks associated with an overreliance on technology. Ambrosi stated that technology should complement human expertise and monitored airline operations rather than replace it.

“Technological advancements can and have enhanced aviation safety, but in order to maintain and enhance our current level of safety, technology alone will never replace the indispensable role of two pilots in the flight deck,” Ambrosi said in the letter.

In addition to ALPA, the letter garnered support signatures from leaders of the European Cockpit Association and the International Federation of Air Line Pilots’ Associations, which represent tens of thousands of pilots around the world.

This article first appeared on AVweb.com.

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After months of several short-term extensions, the $105 billion legislation passed the House on Wednesday and the Senate last week before being sent to the president’s desk for final approval.

“The bipartisan [FAA] reauthorization is a big win for travelers, the aviation workforce, and our economy,” said Biden in a statement. “It will expand critical protections for air travelers, strengthen safety standards, and support pilots, flight attendants, and air traffic controllers.”

Several aviation leaders echoed the president’s sentiments—applauding the bill for its commitment to strengthen aviation safety, grow the workforce, and advance technology and innovation.

The Air Line Pilots Associaiton (ALPA) called the bill a “major step forward” for the safety of our nation’s aviation system.

“This bill addresses runway and airport near misses, maintains rigorous pilot training standards and ensures that the United States remains the global leader in aviation safety,” said ALPA president Captain Jason Ambrosi.

FAA Administrator Michael Whitaker commended the new reauthorization that “allows for more runway safety technology, more air traffic controllers, and stronger oversight of aircraft production.”

The package includes language with a requirement for airlines to install 25-hour cockpit voice recorders on new and existing aircraft, up from two hours currently.

National Transportation Safety Board Chair Jennifer Homendy also praised the bill.

“We appreciate Congress’s safety leadership in mandating the FAA to implement many of our most critical recommendations, which, once acted upon, will further strengthen our nation’s ‘gold standard’ of aviation safety,” Homendy said.

Notably, the FAA Reauthorization Act also includes the first general aviation title, drawing praise from groups such as the Aircraft Owners and Pilots Association (AOPA) and the Experimental Aircraft Association (EAA). There are several provisions in the bill that support GA including expanding BasicMed, mandating a 24-month deadline for the FAA’s final rule on MOSAIC, and sections that address the continued availability of avgas among others.

“We appreciate the leadership of lawmakers who see the importance of this section and worked in a bipartisan manner to include provisions that enhance safety and support general aviation,” said EAA president Jack Pelton.

Full text of the bill can be found here.

Editor’s Note: This article first appeared on AVweb.

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According to the letter, the return comes “in response to the record 2023 revenue gains.” The money will come directly from ALPA’s national funds, Ambrosi added. Airline-specific committees will also be able to provide their own refunds.

ALPA says it expects to make the payments this summer, which will be available to both U.S. and Canadian members based on dues paid last year. For pilots, the refund reflects up to 16 percent of total dues paid in 2023, the union stated.

“I thank our national officer team for sharing the belief and commend the Executive Council for upholding the fundamental responsibility entrusted to us, which is to be good fiduciaries of your money—a responsibility we take seriously,” Ambrosi said in the letter to pilots. “As always, we will ensure that your dues continue to be the best investment in your career that you ever make.”

Members of the union pay up to 1.85 percent of earnings in dues. While ALPA has been able to negotiate record-setting collective bargaining agreements at several airlines, it acknowledges that 16 carriers and their pilot groups are still in the bargaining process.

“The year 2023 was a monumental one in our union’s history…” Ambrosi said. “While we acknowledge these significant gains that resulted in a record amount of revenue for the association, ALPA continues to dedicate all needed resources to the 16 carriers that remain in bargaining.”

Editor’s Note: This story was updated on April 23 at 9:52 a.m. EDT to properly reflect ALPA’s 1.85 percent dues rate. 

Editor’s Note: This article first appeared on AirlineGeeks.com.

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In a recent briefing to pilots viewed by AirlineGeeks, company vice president of flight operations Russ Moore said that American plans to hire 1,300 pilots this year. In 2023, the airline hired around 2,300.

Moore cited “delivery delays from Boeing” among the reasons for the reduction but noted that 2024 is still poised to be the airline’s third-highest year for pilot hiring on record. In addition, he said the company plans to pause new hire classes in June, July, August, and potentially in December.

“In fact, we hired and trained more pilots in 2023 than we have in the history of this airline, and we did it efficiently enough that we were actually a bit ahead of where we needed to be for the summer of 2024,” Moore said during the briefing. “This allowed us to transition from a ‘hire and train as many as you can’ approach to a more traditional approach, which in and of itself reduced our hiring targets for 2024.”

During the company’s investor day event in early March, CEO Robert Isom also noted the airline’s plans to pull back on pilot hiring.

“So [hiring is] slowing down a little bit, but we have a considerable number of retirements,” Isom said. “And so we will be hiring for the foreseeable future at levels like that.”

Despite the slowdown, Moore added that hiring could pick up again as up to 850 of the airline’s pilots retire annually over the next five years.

“So I expect we will be back to the 2023 tempo in hiring in pretty short order,” Moore said.

American joins a slew of other major airlines reducing their 2024 hiring, including both Delta and United. Earlier this year, Delta said it would also cut its 2024 pilot hiring plans in half.

The Allied Pilots Association (APA)—which represents more than 16,000 American pilots—recently noted that the pilot shortage was “over.”

“The perceived pilot shortage is over, eliminating any further need for policymakers to consider changing the retirement age,” said APA president Captain Ed Sicher in a March statement.

American did not immediately respond to a request for comment on the hiring slowdown.

Editor’s Note: This article first appeared on AirlineGeeks.com.

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In a recent social media post on X (formerly known as Twitter), the world’s largest pilots union—which represents more than 77,000 pilots at mainline and regional carriers—pushed back against ongoing legislative efforts to raise the retirement age from 65 to 67.

“The pilot shortage isn’t real,” the ALPA said in the post. “In fact, there’s a surplus of airline pilots. Yet Congress is considering raising the pilot retirement age to 67, which will hurt air travel.”

The union has strongly opposed proposals to raise the mandatory retirement age, citing a slew of potential operational and training issues.

In February, the Senate Commerce Committee voted 14-13 to reject a proposal raising the mandatory retirement age for airline pilots. Both ALPA and the Allied Pilots Association (APA)—which represents American Airlines pilots—say that similar proposals are still on the table in Congress.

The pilot shortage isn’t real. In fact, there’s a surplus of airline pilots. Yet Congress is considering raising the pilot retirement age to 67, which will hurt air travel. Learn what’s at risk from this ill-conceived plan. https://t.co/8J9v5GWC9o #Avation #Airlines #Flying pic.twitter.com/SZ0VVflqPB

— Air Line Pilots Association (@ALPAPilots) April 18, 2024

“The argument hinges on a false claim that there’s a pilot shortage, even though there are more than enough pilots to meet current demand, with plenty more in the training pipeline,” ALPA said in a recent Politico report. “Raising the retirement age from 65 to 67 to address this fake pilot shortage is nothing more than an ill-conceived plan to a fake problem.”

Despite ALPA’s claims, consultancy firm Oliver Wyman expects the gap between pilot supply and demand to be around 13,300 by 2032, which is a 23 percent improvement from the group’s 2022 projections. In 2023, the FAA also issued a record number of Airline Transport Pilots (ATP) certifications.

Regional Airlines Still Struggling

Regional carriers continue to be some of the hardest hit by a shortage of pilots. In a recent presentation, the Regional Airline Association (RAA)—a trade group—said it “can’t believe we have to say this, but an abrupt, temporary hiring disruption —driven entirely by an abrupt aircraft delivery disruption—is not the same thing as fixing the pilot shortage.”

The RAA claims that an aging pilot workforce coupled with aircraft delivery woes at mainline carriers is only temporarily moderating the pilot shortage. Several regional airlines continue to shell out lucrative sign-on bonuses, especially for captains as they look to retain pilots in the left seat.

On Thursday, regional carrier GoJet announced a new bonus structure for direct-entry captains with up to $200,000 “paid out within the first 12 months without any contractual obligations or strings attached.” The company says that captains will have the ability to earn over $400,000 during their first year of employment. ALPA represents GoJet pilots along with aviators at several other regional operators in the U.S. and Canada.

“We can hire first officers. I think almost every regional airline right now has a stack of first officers,” said CommuteAir CEO Rick Hoefling during an October 2023 interview with AirlineGeeks. “The problem is building their time at the same time you’re attriting out captains at a pretty high rate in the industry. We went from a pilot shortage to a captain shortage now in the industry. So the pendulum is starting to move.”

Major airlines—including Southwest, Delta, and United—have slowed or completely halted pilot hiring in 2024.

Editor’s Note: This article first appeared on AirlineGeeks.com.

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ALPA highlighted recently released FAA pilot-production data, indicating that the U.S. is consistently certifying a greater number of airline pilots on a monthly basis compared to pre-pandemic levels.

The news comes as industry experts and financial analysts agree that pilot demand has been met, and there is even a surplus of pilots as several airlines have scaled back hiring.

Executives at TD Cowen and Goldman Sachs have expressed optimism, indicating the industry is moving past its previous challenges. “The improved outlook vs. the introduction of the GS Pilot Supply & Demand model in December 2022 is primarily driven by higher-than-expected certificates issued (2022 and 2023 were both records) in addition to slower fleet growth and modestly lower-than-expected retirements,” according to Goldman Sachs.

Several regional airlines have noticed a shift in the environment with decreased attrition rates. Mesa Airlines CEO Jonathan Ornstein said, “There was a time when none of us could find first officers. Now I mean, I think we have close to 2,000 applicants for qualified first officers.” CommuteAir CEO Rick Hoefling echoed that statement. “We can hire first officers. I think almost every regional airline right now has a stack of first officers. The problem is building their time at the same time you’re attriting out captains at a pretty high rate in the industry. We went from a pilot shortage to a captain shortage now in the industry. So the pendulum is starting to move.”

Despite ongoing claims of a pilot shortage by special interest groups, ALPA maintains that while there were some initial backlogs post-COVID, the system is working and yielding a record number of pilots.

Editor’s Note: This article first appeared on AVweb.

The post ALPA, Industry Say Pilot Supply Is Stable appeared first on FLYING Magazine.

The FedEx Master Executive Council voted for Captain Jose Nieves, a Boeing 757 pilot who has been at FedEx for 28 years, to lead the union’s 5,800 members, the Air Line Pilots Association announced late Tuesday.

Nieves replaces Captain Billy Wilson, who was elected October 30, 2023 for an interim term through March 2025 but was voted out this month in the face of growing opposition. A large subset of disenchanted pilots willing to take a more aggressive stance versus FedEx management pushed the vote.

Wilson took the helm when predecessor Christopher Norman resigned in the wake of last summer’s union rejection of a tentative agreement that leadership endorsed as delivering industry-leading improvements on pay, retirement and work-life balance.

Nieves’ term will run through March 25, 2025.

“FedEx pilots are facing challenges unlike any in recent years, and I believe this is a critical time in our union’s history,” said Captain Nieves, in a news release. “At the top of that list of challenges is standing up to a company that has explicitly demonstrated a failure to value its pilots and employees. . .“Our pilots grow more unhappy with FedEx management by the day. It is past time for management to come to the table with a contract that recognizes our value. This is my primary focus, and the work begins today.”

Both sides have been negotiating a new labor agreement for three years and have been under the supervision of the federal National Mediation Board since October 2022. On March 8, the Air Line Pilots Association asked the NMB to declare an impasse and release the parties from mediation, the first step necessary to launch a strike action.

The new MEC leadership, responding to supporters who felt the previous board was too willing to make concessions, has made clear its willingness to take the gloves off and use any means available under the Railway Labor Act to press FedEx for better benefits. The union says it believes FedEx is not willing to change its bottom line from the deal agreed to last summer.

FedEx Corp. last week reported adjusted earnings of $3.86 per diluted share, well above analysts’ estimates of $3.45 per share, with operating income up 19 percent in the third quarter. Operating profit for the Express segment, which is responsible for the air network, nearly doubled after the company idled more aircraft, reduced flight activity and pared other costs. The lower flying levels also mean less pay for pilots.

FedEx has not invoked language in the existing contract that allows the airline to go below minimum guarantee pay for a four-week period when available flying time falls below certain thresholds, according to a message from a pilot who asked to remain anonymous to protect job security. FreightWaves reported early this year that such a move was possible because of the sluggish demand. But domestic flight activity subsequently picked up, according to research by Morgan Stanley.

FedEx stock increased 6 percent on Tuesday, reaching a three-year high of $288.99 per share.

The pilots union says FedEx’s improved performance demonstrates the company can afford a better compensation package. It took umbrage with FedEx announcing another $5 billion share buyback program. A group of pilots conducted an information picket outside the New York Stock Exchange when FedEx reported its earnings on Thursday to draw attention to their agenda.

The FedEx pilots, who once were near the top of the pay heap, want a contract similar to ones won by counterparts at American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. Even pilots at Hawaiian Airlines and Alaska Airlines achieved sizable raises last year.

Cockpit crews appear to have lost leverage since airfreight and parcel demand began falling in mid-2022. FedEx also faces the strong possibility of losing some, or all, of its U.S. Postal business later this year. But the pendulum is slowly swinging back to growth, with global air cargo volumes up more than 10 percent for the first 2.5 months compared to the same period last year and the small package market projected by some to grow about 4 percent per annum over the next three years.

Editor’s Note: This article first appeared on FreightWaves.

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Despite strong membership divisions, there appears to be greater unity within the Air Line Pilots Association’s (ALPA) Master Executive Council as a new guard begins to exert control. And internal communiques obtained by FreightWaves also indicate that council members, including long-serving incumbents, share the view that FedEx (NYSE: FDX) is stringing out the labor dispute.

“Whether you are of the opinion that we should have waited longer or that we’ve waited long enough, we MUST embrace the imperative that we all work together. We are ONE TEAM on this side of the table, ready to negotiate a deal that recognizes our value to OUR corporation, and a deal that the corporation can easily afford,” the MEC said in a note to members that was signed by all 14 council representatives. “On the other side of the table is the other team, intent on dividing and conquering us. You need to decide if you’re on OUR team or THEIR team. There are no other choices, no neutral sideline or fence to stand or sit on. We stand together, or we all fail.”

ALPA last week asked the National Mediation Board to end bridge-making efforts and allow the parties to resolve differences through arbitration—a move designed to open the door to a possible strike since neither side is likely to agree to a binding decision from an arbitrator. The letter was sent after an 8-6 vote by the MEC that some complained was engineered behind closed doors, rushed through without adequate consideration and taken without waiting for FedEx’s response to the union’s latest demands. 

The bad blood got so bad that some council representatives said they were essentially ambushed by plotters seeking to hijack the negotiations, FreightWaves reported. In a separate correspondence to crew members, a top FedEx official said the union’s shifting stances because of the internal divisions has made it difficult to come to an agreement because it doesn’t know what demands to take seriously. 

ALPA on Thursday blamed FedEx for trying to undermine union solidarity by sowing “inflammatory information and unsubstantiated allegations” in the media, notwithstanding the fact that the internal tensions were clearly spelled out in the organization’s own documents.

“Contrary to attempts to divide our governing body and pilot group, we want to reaffirm that FedEx pilot leadership stands united in its pursuit of a contract that reflects the hard work and dedication of our members. The decision to request a release from the National Mediation Board was not taken lightly, but was made in the best interest of ensuring that a resolution to our contract negotiations was completed in a timely and constructive manner,” the union said in response to the article.

It is unclear when the pilots union made its latest proposal to FedEx, but Wednesday’s membership update from the MEC and an official who was subsequently contacted implied that it happened on Feb. 27, the first day of three mediated sessions in a row. The MEC said it was angered that FedEx failed to give an answer on Feb. 29 and instead said it needed two more weeks before it could address retirement issues.

“A hallmark of the company’s behavior in negotiations has been stall, drag feet and delay. With only two days of meetings scheduled in the month of March, and only one week set aside to meet in April, we simply could not play along with the delay game any longer,” the board said. 

The parties have been negotiating for nearly three years on an updated pilot contract and have been in federal mediation since October 2022. 

The leaders said the delay solidified the view that FedEx had no intention of making improvements to the tentative agreement pilots rejected last summer. A majority of FedEx pilots were displeased with the agreement’s level of job protections, back pay, pension options and quality-of-life considerations and the fact that pay increases were below those recently achieved by passenger-airline counterparts. 

FreightWaves previously reported that FedEx did not plan to increase the value of the rejected deal in the new round of mediated talks. The MEC letter characterized management’s insignificant changes so far as “insulting.” 

Scope Clause

Of particular concern, according to the correspondence, is the company is not addressing pilot concerns that more flying will be outsourced, which would reduce their earnings. ALPA wants to improve clauses in the existing contract that define what type of flying can be done by pilots that aren’t employed by the airline. 

Last year’s tentative agreement would have allowed FedEx Express to place more work during surge periods with third-party airlines without paying a higher penalty. But many pilots were concerned that language prohibiting outsourcing if FedEx reduces flight hours or furlough pilots wasn’t strong enough. Under the existing scope arrangement, FedEx pays a financial penalty to the union that gets distributed to pilots if the company goes above the agreed cap on shipment volume that can be given to charter airlines. Opponents feared FedEx might simply not replace older pilots as they retire and then claim a need to hire partner carriers to meet demand.

The latest union proposal trades smaller monetary penalties for using contractors in exchange for more job protection. The memo accused management of rejecting most of the offer and deferring discussions about reduced crew operations into the future. 

Much of the tension centers on the extent to which FedEx intends to reduce the pilot workforce as it reengineers the air network to reduce structural expenses in response to shifting e-commerce patterns, which have resulted in weaker overnight express volumes. Company executives have outlined a “Tricolor” strategy that would shift a greater percentage of the fleet towards transporting deferred freight, which would be concentrated during the daytime. They have also publicly acknowledged the need to reduce the ranks by several hundred from the current level of 5,800 pilots. 

“By definition, the Orange network is FedEx planes and FedEx pilots, just retimed to go into day sorts versus tighter night sort windows. We discussed that on our Q2 call, and have been unequivocally clear about this in all company communications around Tricolor,” said FedEx spokesperson Caitlin Adams Maier.

The MEC said it wants FedEx to put in writing that FedEx pilots will be used to fly that freight. 

“When you add their scope [suggestion] to their pitifully low pay rate offer and their shuffling of retirement benefits and throw in their insistence on including concessions” on guaranteed flight hours for training or vacation that overlaps with normal downtime “what we’ve been offered from the company is a recipe for another failed tentative agreement,” the MEC told members.

The tenor of the messages reflects recent changes within the MEC. Most of the representatives who endorsed the failed tentative agreement have been recalled and replaced. Initially, only a few representatives were recalled after the failed tentative deal and the new representatives were in the minority. Now they appear to have gained the majority. 

The MEC is looking to fill a vacancy for chairman of the negotiating committee, according to the member update.

Late Thursday, the MEC voted chairman Billy Wilson out of office, an action he predicted last week would happen because of the power struggle and disagreement over the NMB letter’s timing.

“Our request to be released [from NMB oversight] should demonstrate to the company and investors that we will not settle for a subpar tentative agreement nor allow the process to be delayed any further,” the MEC wrote. “The trajectory plotted by the company would never yield a tentative agreement that we as a MEC could endorse, much less one that the membership could overwhelmingly ratify.”

The union has consistently criticized FedEx for citing lower profits as reason for caution on a new pilot contract, noting that the company in December announced a $1 billion accelerated share buyback program. 

During a special in-person meeting at the MEC’s Memphis, Tennessee headquarters on Wednesday, Southwest Airlines Pilots Association president Casey Murray described how a deal was reached in January that would raise pilot pay about 50 percent over five years. The FedEx deal shot down last summer included a 30 percent pay increase over 4.5 years. Murray said the agreements reached at Delta Air Lines and United Airlines set a pattern for a successful outcome with Southwest. 

The MEC plans to conduct an informational picket on Wall Street when FedEx releases quarterly results next Thursday in hopes that investors will convince management to speed up negotiations.  

Editor’s Note: This article first appeared on FreightWaves.

The post FedEx Pilots Take Harder Line as Contract Dispute Drags appeared first on FLYING Magazine.

“Increasing the pilot retirement age will disrupt airline operations, raise ticket prices, upend collective bargaining agreements, create a cascading and costly training backlog, and put the United States out of compliance with international standards,” said ALPA President Captain Jason Ambrosi in a statement.

“This is a weird union issue,” commented Senator Ted Cruz during the hearing, citing a push from some union members supporting the age hike.

• READ MORE: Airline Pilots Flying to Age 67?

Supporters of the change argued it would address the pilot shortage and allow experienced pilots to continue flying, citing rising life expectancy and advancements in healthcare.

“We strongly encourage preceding that type of change with appropriate research so that the FAA can measure any risk associated with that policy and define appropriate mitigations,” FAA Administrator Mike Whitaker wrote in a letter to Congress earlier this week.

Last year, the U.S. House of Representatives voted 351-69 on an FAA reauthorization bill that included an age hike to 67 for airline pilots. Thursday’s move by the Senate is part of a broader reauthorization bill, which includes an increase in safety inspectors and air traffic controller staffing.

Editor’s Note: This article first appeared on AirlineGeeks.com.

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An additional 200 to 300 pilots could become redundant late this year if the company, as expected, loses a large chunk of work for the U.S. Postal Service, a senior executive recently told a group of airline employees.

The attempt to shed pilots, who have already absorbed a steep decline in pay, comes as collective bargaining resumes for a new contract.

Management is likely to invoke contract clauses that would allow it to go below the minimum guarantee of 68 flight hours per month when available flying time falls below certain thresholds, said Pat DiMento, FedEx’s vice president of flight operations and training, in a secretly recorded meeting with pilot evaluators that was shared with FreightWaves. Pilots get credit for the minimum number of hours regardless of how many hours are actually flown.

FedEx Express, the largest cargo airline in the world, has essentially been able to pay the equivalent of 200 fewer pilots since the summer by limiting distribution of flight schedules, effectively reducing the current surplus of employees, he said. 

FedEx expects 350 to 450 pilots to accept early-retirement incentives when a deal on a new labor contract is reached, which would allow the company to maintain current minimum credit hours and flight schedules, said DiMento.

In the absence of a tentative contract, the airline would need to reduce the crew list by 200 individuals any way possible to prevent further cuts to pay guarantees. Achieving that figure — through retirement, resignation, leave of absence or offers from competitors — would save the company $50 million per year.

Average daily parcel volume for FedEx Express declined 2 percent and global average daily freight pounds fell 18 percent year over year in the quarter ended Nov. 30. Express volumes were down more than 10 percent for three consecutive quarters through last February and then shrank at single-digit levels for the remainder of 2023. 

FedEx planners are already noticing a decline in January volumes and removing flight hours they previously expected to operate, the flight operations chief recently told the quality control pilots. It was a friendly audience because they are quasi-supervisors that sit between line pilots and management. 

“Unless we get a new contract, it’s [pilot pay] not going to magically fix itself because I don’t see the economy turning around,” DiMento said.

Addressing Labor Pressure In Down Market

Investors were disappointed that major operational savings at FedEx were unable to fully offset lower revenue during the second quarter. Express faces higher labor costs if pilots secure a contract upgrade and newly mobilized mechanics are able to form a union.

Both outcomes are far from certain. 

Workers at Amazon fulfillment centers, Starbucks locations, and other businesses have voted in recent years, for varying reasons, against joining a union. And pilots had more leverage a year ago when major passenger airlines scrambled to refill positions after the pandemic as travel demand spiked. Delta Air Lines plans to hire half as many pilots this year as it did in 2022 and 2023 because the pilot shortage has eased, according to Aero Crew News.

Meanwhile, FedEx is now downsizing internal fleet operations to eliminate excess capacity and is looking to shed pilots amid diminishing parcel volumes.

FedEx cockpit crews, represented by the Air Line Pilots Association (ALPA), in July rejected a tentative contract worth $3.8 billion that would have increased pay by 30 percent over 4.5 years and are back at the bargaining table.

The last round of negotiations, mediated by the federal National Mediation Board, took place Dec. 12-15, and the sides are scheduled to meet again Thursday and Friday. Two more bargaining sessions are set for January.

A majority of FedEx pilots were displeased with the agreement’s level of job protections, back pay, pension options, and quality-of-life considerations and the fact that pay increases were below those achieved by passenger-airline counterparts. Pilots at Southwest Airlines, for example, are considering whether to accept a new contract that would raise pilot pay 50 percent over five years.

After FedEx announced it is accelerating a $1 billion share buyback, ALPA last week said the company should also invest in cockpit crews to provide stability for long-term growth. The union argues pilots deserve to be compensated for the sacrifices and risks taken so the company could earn record profits during the COVID crisis.

Deep division within the pilot group could hamper chances for a quick deal. A slim majority voted to kill the tentative contract, and some wanted to recall the negotiating committee. Those pilots are upset with ALPA for being too accommodating toward FedEx, including in a 2015 contract they say eroded schedule flexibility and other quality-of-life issues. 

Many union members have lost faith in the ability of Capt. Pat May, the chairman of ALPA’s FedEx negotiating committee, to deliver a favorable labor agreement, especially after he did not resign, as promised, when the tentative deal went down last summer, a pilot told FreightWaves. The source asked not to be identified so as not to jeopardize his job or union relationship.  

Pilots over the years left carriers such as American, Delta, United, and Southwest for what they believed were better jobs at FedEx.

“Our work rules are well below our passenger peers. Pay and compensation is starting to lag and stagnant. We fly horrendous schedules which affect our health,” the pilot said. “This entire situation may have killed the best airline job in America.”

Hourly pay scales vary by type of aircraft flown and seniority. A widebody (MD-11 or Boeing 777) captain at FedEx makes $277 in the first year and $326.50 with 12 years on the job, according to data compiled by the Air Line Pilots Association. That compares to $345 per hour in year one at Hawaiian Airlines, a new entrant in the freighter space, to fly the Airbus A330. After a dozen years at Hawaiian, a freighter captain can make $376 per hour. Pilots at UPS make $344 per hour, after an initial probation year, and $366 by year 12.

A veteran FedEx captain pulling a typical 80 to 90 hours per month annually makes about $363,000 in pay and benefits, compared to about $396,000 at UPS, according to analysis by Kit Darby, an aviation labor consultant. A senior captain at Delta Air Lines or United makes about $416,000 per year.

DiMento indicated that FedEx plans to offer the same amount of total money to the pilots in this go round as it did in the tentative agreement, but reallocate it differently between retirement, higher pay scales, signing bonuses or other buckets. 

The worth of the contract will be more than last July because higher pay rates and signing bonuses will have accrued since then and will be retroactively covered in the new contract, DiMento explained.

One of the check airmen, who said he voted in favor of the negotiated contract, questioned if the strategy will work.

“The young guys, their mentality is, ‘We came to this premier airline and we want a premier contract.’ I don’t know if they are going to go for it,” he told DiMento. The total compensation and lifestyle for a veteran FedEx pilot compares very favorably to one at Delta, he added, “but they don’t listen.”

Many pilots were concerned that language prohibiting outsourcing to third-party airlines if FedEx reduces flight hours or furloughs pilots wasn’t strong enough in the tentative agreement, but DiMento stressed management wants to maximize use of its own aircraft and won’t seek operating leases when its own pilots aren’t busy. He said that FedEx wanting long-term transportation service agreements to replace in-house flying undermined passage of the interim contract.

Economic Leverage Shifts

When the parties began negotiations in 2021 to amend the existing contract, the FedEx fleet was maxed out to meet soaring freight and parcel demand, stoked by people buying goods online rather than services because of social distancing during COVID.

The market has drastically changed since then, with e-commerce growth returning to normal and air cargo volumes contracting for nearly 18 months. FedEx Express was hiring pilots as fast as it could and didn’t forecast the severity of the downturn. The company now has more aircraft and pilots than needed to fly current volumes.

There are about 700 surplus pilots out of 5,800 on the payroll, according to FedEx officials. 

In the fall of 2022, FedEx launched an initiative to take out $4 billion in structural costs, especially in the air network, and redesign the entire parcel distribution network for greater efficiency. The air overhaul could make FedEx Express less reliant on aircraft than in the past.

The air and international unit flew fewer hours in 2023, deactivated aircraft until demand returns, accelerated the retirement of older planes, and flew more direct routes. Since the company still has new freighters on order, it’s unclear if the total fleet size will decrease. FedEx last year decided to close three pilot bases in the U.S. and overseas and its Los Angeles airport maintenance facility in 2024. The repair jobs will be sent to Indianapolis.

FedEx is only providing the minimum number of flight hours guaranteed in the existing contract. Pilots are making substantially less money because they have to share a smaller pool of flying assignments. One pilot contacted by FreightWaves said his pay has been cut back 30 percent this year.

In November, management prodded pilots to consider job openings at PSA Airlines, a regional feeder carrier owned by American Airlines, that offered incentives to attract FedEx and UPS pilots.

The FedEx pilot said he had not heard of any colleagues taking the PSA deal. Pilots said in online chat forums that they considered the request disrespectful to veteran crew members who can go directly to a large airline and enjoy superior benefits. PSA did not respond to a message about the success of the recruiting effort.

Since few pilots have been willing to voluntarily leave so far, guaranteed pay could soon fall to about 60 or 61 hours per month, DiMento told the check airmen. That would effectively reduce pilot rolls by an additional 100 individuals and save FedEx about $100 million per year.

He speculated that it would take a $500,000 exit package today to entice some pilots into early retirement because many near eligibility are holding off until a new contract is in place. Normally, about 140 FedEx pilots retire at the end of each year, but only about 40 captains did so in 2023.

When a contract is finalized, FedEx will make it attractive to retire by waiving the requirement for giving notice of early retirement and enhancing the severance package, said DiMento.

FedEx has to balance a new contract offer against the economic realities it faces. It can’t afford to give pilots $500 million extra to close out a deal, DiMento said, when it’s struggling to generate revenue.

“In this business environment, as a pilot you can’t go in there asking for the world. It’s just not going to happen,” he said.

And, the flight operations chief added, the substantial loss of the existing U.S. Postal Service contract means FedEx will have 200 to 300 more excess pilots by October. The Postal Service is in the third year of a transformation plan that includes migrating most air volumes to ground transportation to save money.

• READ MORE: ATI Pilots Seek Federal Mediation on Stalled Contract

Mechanics Mobilize

Meanwhile, FedEx Express mechanics recently launched a campaign to join the Teamsters union.

The organizing effort targets about 5,500 to 6,000 aviation, truck and facility mechanics, and possibly some maintenance workers at FedEx Express, said Teamsters spokesman Matt McQuaid in an email exchange.

Hundreds of technicians have signed authorization cards saying they want the Teamsters to represent them in collective bargaining, the union said in a Dec. 20 news release.

The Teamsters’ goal is to petition the National Mediation Board for a representation election within the next few months, McQuaid said. The NMB will conduct an election if employees or a union is able to collect signatures from at least 50 percent of workers in a potential bargaining unit. Labor relations for airlines are governed by the Railway Labor Act, which highly regulates bargaining procedures that unions and employers must follow, and facilitated by the NMB.

That means any union has the harder task of winning national support across the country instead of organizing individual facilities at the local level.

“The response has been overwhelming,” said Joe Ferreira, director of the Teamsters Airline Division, in a Nov. 13 letter to workers in which he accused FedEx management of engaging in “an anti-union propaganda campaign that grossly misrepresents the factions of your unionization drive, the National Mediation Board process, and disregards federal law.”

According to ZipRecruiter, the average aircraft maintenance technician at FedEx makes $72,000 per year.

The FedEx campaign comes as the Teamsters have tried for more than a year to organize technicians at Delta Air Lines.

“We’re aware the Teamsters are targeting our mechanics at FedEx Express. We respect the right of our employees to choose whether or not to support such efforts. We are incredibly proud of the culture we have built over the past 50 years that empowers our employees’ voices; values their creativity and contributions; and encourages collaboration that is important to them, their career, and our future,” FedEx said in a statement to FreightWaves.

The Teamsters last year chalked up significant wins in the express logistics sector. An aggressive strategy by new President Sean O’Brien forced UPS to grant big pay increases to 340,000 workers while 1,100 ramp workers at DHL Express’ Cincinnati air hub won their first contract, pending ratification, after a 12-day strike.

Satish Jindel, the CEO of consultancy ShipMatrix, said in an interview that “the Teamsters should look for a better target [than the FedEx mechanics] where the law may not limit them and working conditions and wages are bad.”

Editor’s Note: This article first appeared on FreightWaves.

The post FedEx Pilots Face Pay Cuts, Buyouts as Contract Talks Resume appeared first on FLYING Magazine.