FedEx Leaves Pilots Behind While Rewarding Shareholders

Release #: FDX 24.10
June 26, 2024

FedEx Leaves Pilots Behind While Rewarding Shareholders

MEMPHIS-Yesterday, the FedEx Corporation reported fiscal year 2024 adjusted operating profit of $6.2 billion. The Corporation's Board of Directors previously approved a 10 percent increase in dividends, a move intended to leverage free cash to enhance shareholder returns. The Corporation celebrated the gains of its DRIVE program-a financial planning discipline begun in 2023 that continues delivering shareholder value-and highlighted the transition to a One FedEx corporate restructuring plan that aims to integrate air and ground networks.

"While FedEx continues to reward shareholders, employees face substantial headwinds in the strategic transformation effort," said FedEx ALPA Master Executive Council chair Capt. Jose Nieves. "We expect management to collaborate with us in negotiations. They need to be forthright in their plans and, ultimately, start bringing employees along on the transformational journey in accordance with sound organizational change management practices or risk failure in the process."

Over the course of FY24, FedEx laid off thousands of employees, citing efficiencies gained in corporate realignment. The Corporation is poised to continue the process in FY25, announcing plans to reduce its head count in Europe by as many as 2,000 employees, including closing a pilot domicile in Cologne, Germany, according to a recent securities filing. FedEx Express pilots, represented by the Air Line Pilots Association, Int'l (ALPA), are a critical component to FedEx's air network and overall financial success. The pilots are currently in labor negotiations for a new contract that aims to pace FedEx's strategic changes in the process.

Since contract negotiations began in 2021, FedEx has repurchased billions of dollars of its stock, but failed to collaborate with the pilot group on its restructuring plans. After nearly three years of protracted negotiations, the pilot group is frustrated by the lack of transparency in the Corporation's strategic direction. The parties reached a tentative agreement approximately a year ago, but ratification by the pilots failed as, among other issues, the Corporation's plans created legitimate concerns which overshadowed the terms of the agreement.

"We recently restructured our approach to negotiations, aiming to address critical gaps in communication and align efforts to produce a tentative agreement that paces strategic change and delivers industry-standard economic value to our pilots commensurate with the value shareholders expect of the Corporation," said Nieves. The pilots' approach will closely align with FedEx's network realignment strategy, termed "Network 2.0," and more specifically the air network plan called "Tricolor." If successful, negotiations will preserve pilot jobs and maintain FedEx's highly reliable organic air network.

In an informational picket conducted on May 30, 2024, FedEx pilots sent a message to the FedEx Corporation that they are closely tracking the transformation. They continue to criticize management's lack of regard for pilot contributions to financial success, particularly during the shipping boom of the pandemic era, whereby FedEx realized record profitability.

CONTACT: FDX Media at [email protected]

Founded in 1931, ALPA is the largest airline pilot union in the world and represents more than 78,000 pilots at 41 U.S. and Canadian airlines. Visit ALPA.org or follow us on Twitter @ALPAPilots.

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