Dive Brief:
- FedEx has reached a tentative agreement on a new labor contract for its more than 5,000 pilots following prolonged negotiations with the Air Line Pilots Association, International, the company announced Wednesday.
- The tentative agreement includes hourly pay increases of nearly 40% this year, with 3% annual pay bumps beginning in 2028, per a union summary of the deal. The ALPA's FedEx Master Executive Council will now review the deal and, if approved for distribution, the offer will be subject to a ratification vote by FedEx pilots.
- "This tentative agreement reflects our commitment to our valued crew members and to our growth strategy for the airline and the business as a whole,” Richard Smith, FedEx's COO of international and CEO of the company’s airline, said in the announcement. “It’s a win-win for our pilots, for FedEx, and for our customers around the world.”
Dive Insight:
The tentative deal brings FedEx and its pilots union one step closer to securing a new labor contract, a process that has taken years.
Contract negotiations commenced in May 2021, and the parties reached a tentative agreement two years later. However, the majority of pilots rejected the deal, which featured a 30% pay raise. Talks resumed in November 2023, but friction emerged as union leadership expressed frustration over a lack of movement from company management on pay rates and retirement terms.
As contract negotiations trudged along, the ALPA flagged operational strains challenging FedEx pilots. In March, the ALPA said in a press release that FedEx's strong peak season execution required frequent adjustments and placed greater demands on frontline crews.
"Pilots say this pressure is now showing up in measurable ways," the ALPA said. "Recent months have seen pilot resignations reach historic levels, a trend they say reflects the cumulative impact of current conditions and a growing disconnect between how the operation is run and what the workforce expects."
Much has changed for FedEx's air cargo operations since pilot contract negotiations began. FedEx is combining its historically separate Express and Ground networks under its Network 2.0 initiative, and the company has also launched Tricolor, a redesign of its air network that aims to boost efficiency and profits.
