FedEx Tells Pilots To Quit, Work For Regional Airline

FedEx Tells Pilots To Quit, Work For Regional Airline

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In the past couple of years, it seems like it has been nothing but good news for airline and cargo pilots, in terms of the demand for them, and their negotiating power. That’s very much changing at cargo airlines, it seems…

FedEx encourages pilots to move to American Airlines subsidiary

Cargo traveling by air is transported both by dedicated cargo aircraft, and in the bellies of airliners. During the early stages of the pandemic, cargo airlines were booming, given that airlines were operating limited schedules, meaning there was more demand for cargo aircraft than ever before.

That’s slowly changing, both as airlines have largely restored pre-pandemic capacity, plus the demand for cargo is softening. Along those lines, @xJonNYC reports on a memo that FedEx has sent to its pilots.

Essentially FedEx is encouraging its pilots to quit, and to go work for PSA Airlines, a wholly owned subsidiary of American Airlines. Here’s how FedEx’s VP of Flight Operations & Training describes the current situation at FedEx:

As I recently communicated, our Flight Operations are significantly overstaffed. Air cargo demand remains down, with decreased revenues and volumes similar to 2019 levels. Consequently, Bid Line Guarantees on most of our fleets are at or near minimums and will probably stay there for the foreseeable future. This low demand is not unique to FedEx but is an industry-wide issue impacting the major cargo carriers.

As you may have noticed, the passenger industry is not facing the same issues, and those carriers continue to hire pilots at a pace we haven’t seen in recent history with no apparent end in sight.

FedEx pilots are paid hourly, with a minimum number of monthly hours. As you can see above, this means that pilots aren’t able to get much above their current minimums, and therefore are being paid less than they’re used to.

While FedEx isn’t laying off any pilots, the airline is offering pilots an opportunity to move to PSA Airlines, which is a regional airline that’s wholly owned by American Airlines. With an expedited hiring process, pilots at FedEx:

  • Could immediately be captain at PSA Airlines, flying CRJ-700s and CRJ-900s
  • Could receive a $250,000 sign-on bonus, consisting of $175,000 with the first paycheck, and $75,000 on the one year anniversary
  • Pilots would receive a minimum of 12 days off per month, and would be able to carry over their seniority
  • Pilots would be guaranteed jobs at American Airlines in the future
  • For those curious, you can find the PSA hourly pay scale here, while you can find the FedEx hourly pay scale here
FedEx pilots could be flying CRJ-700s

The memo to pilots continues with the following:

While I understand that this is not something that will appeal to every pilot, for those of you who are frustrated with current flight hours, career progression, or have just been on the fence about available options, you may consider this unique opportunity enough of an incentive to make a move. Frankly, I was pessimistic about how attractive the opportunity might be when first approached, but the details are compelling.

This offer is interesting on a variety of levels

There’s a lot to unpack here. A few thoughts:

  • It’s not every day that you see a company tell its pilots “ummm, so maybe y’all should go work for another company?”
  • FedEx pilots have been negotiating new contracts, and over the summer they rejected a proposal that would have given them a 30% pay increase over the coming years; one has to wonder if they missed their window for getting a better contract
  • What’s interesting about the offer from PSA Airlines is that it offers a huge $250K bonus for flying there for a year, but otherwise the pay is completely uncompetitive to what FedEx pays its pilots; a FedEx first officer makes more than a PSA Airlines captain, and never mind that the pay scale tops out much lower
  • When you’re a pilot, seniority is the single most important thing, so by working for a regional airline first, you’re delaying your opportunity to be hired by your “forever airline,” which pilots want to do ASAP
  • With American, Delta, and United, all hiring directly, it seems like FedEx pilots would be better off just trying to work for one of those airlines directly, rather than working for a regional airline first
  • I can’t help but feel like passenger airlines will soon be having the same issue as cargo airlines, where they have too many pilots; I think cargo demand is just shrinking a bit ahead of passenger demand
  • For the most part, working for cargo airlines is lucrative, and is just as good of a career path as working for an airline; unless FedEx pilots are worried they’re going to get furloughed soon, it seems like they’re best off sticking it out, rather than starting from scratch, unless they can land a job at a stable passenger airline, like Delta
Some FedEx pilots may soon be flying much smaller planes

Bottom line

FedEx is telling its pilots that the company is overstaffed, and that pilots will only be receiving minimum hours for the foreseeable future. The company is offering pilots the opportunity to move to PSA Airlines, a wholly owned regional subsidiary of American Airlines. While this comes with a huge bonus and the ability to eventually work for American, this doesn’t otherwise seem like a good deal for pilots.

We’re now seeing the demand at cargo airlines shrinking, and one can’t help but wonder if passenger airlines will be next.

What do you make of this FedEx pilot situation?

Conversations (22)
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  1. Big Ran Guest

    Sounds like the phasing out of Fed Ex Express is progressing fast and Ground is taking over.

  2. Anonymous Guest

    Make no mistake - FedEx isn't offering anything. This is a PSA offer - the same one they made to UPS when they were downsizing.

    The difference is that UPS offered high tenure pilots a buyout to retire early. In that case, it might make sense for a pilot at the end of their career to fly for a PSA and collect the nice signing bonus.

    FedEx published this note three days before...

    Make no mistake - FedEx isn't offering anything. This is a PSA offer - the same one they made to UPS when they were downsizing.

    The difference is that UPS offered high tenure pilots a buyout to retire early. In that case, it might make sense for a pilot at the end of their career to fly for a PSA and collect the nice signing bonus.

    FedEx published this note three days before contract negotiations resumed after their failed attempt at a pilot contract. FedEx has offered zero incentive for pilots to move on. This is nothing but a negotiation tactic.

  3. Aaron Chandler Guest

    Overnight shipping is going the way of Kodak film. FedEx and UPS are no longer a indicator of the health of the economy. Amazon has effectively ruined overnight shipping. Seen a new giant warehouse near your home lately? You can have same day delivery of things that were never on an airplane.

  4. Eskimo Guest

    Automation doesn't need seniority.

    The end is inevitable. Your kind is headed for extinction.

    1. jedipenguin Guest

      Everybody's job is going extinct.

  5. Chris Grable Guest

    Negotiations Tactics at its best.

  6. BenjaminGuttery Diamond

    UPS is having similar issues ATM. A well known pilot for a pax airline on YouTube just did a video about this topic last week.

    They (the FedEx union) should have taken the 30% and ran with it.

    Also, this buyout/transfer is so very obviously meant for the newer pilots.

  7. Never In Doubt Guest

    “ I can’t help but feel like passenger airlines will soon be having the same issue as cargo airlines, where they have too many pilots; I think cargo demand is just shrinking a bit ahead of passenger demand”

    What reason do you have for “feeling” this?

    The cargo and passenger airline businesses are *very* different.

    1. Donato Guest

      They are not so different. The economy looks to be heading downwards with some airlines as well as merchants seeing bad times coming.

  8. Darryl Stewart Guest

    FedEx should be utilizing combi aircraft. Half cargo, half pax. Much higher profit margin than just cargo

    1. Darryl Stewart Guest

      What an intelligent comment.

    2. Leigh Diamond

      @Darryl

      Let's see...no windows on the fleet, a cargo flight schedule that could only be sold at ULCC levels, no related airport infrastructure, no GDS connectivity, no passengers sales/marketing/commercial/revenue management staff (yes, they have those staff for cargo, but not a passenger operation), cost of re-equip and install windows, install seats, install larger galleys, and the list goes on...
      And YOU talk about intelligence?

    3. Darryl Stewart Guest

      Dink, do you really think that is unintelligent?

      ULCCs are the fastest-growing subset of the aviation industry (Source: 'ICAO Study of Global Aviation Statistics, 2018'

      Airport Infratsructute will be purchased by way of slot and gate payments - VERY simple.

      GDS connecvity - this is a scam concocted by the major carriers. FedEx has the capability to sell tickets by way of their website, further sources are irrelevant and unneeded.

      Sales/marketing/commefcial/revenue management - a...

      Dink, do you really think that is unintelligent?

      ULCCs are the fastest-growing subset of the aviation industry (Source: 'ICAO Study of Global Aviation Statistics, 2018'

      Airport Infratsructute will be purchased by way of slot and gate payments - VERY simple.

      GDS connecvity - this is a scam concocted by the major carriers. FedEx has the capability to sell tickets by way of their website, further sources are irrelevant and unneeded.

      Sales/marketing/commefcial/revenue management - a ULCC as you mentioned earlier would have very minimal resources dedicated to this, so unsure what you're referring to, dink.

      Everything else you mention is (seats, windows, galleys, etc) all is part of a combi conversion, so not sure why you are so up in arms about that.

      In conclusion, FedEx combi conversions are very SIMPLE and you are a stupid, narrow-minded fool.

    4. Leigh Guest

      We’re laughing at you. You think it SIMPLE?

      I needed a laugh today. Thanks!

    5. Bill Grant Guest

      Ups tried the PAX flying years ago, didn't work out for them.

    6. Donato Guest

      I will not comment on Darryl's thought, others are doing that.
      I do remember UPS trying something similar. Their plan was to convert some 737/320.757 type of aircraft so seats could be swapped in for weekend flights while express shipments could travel on ground Saturday/Sunday. The plan was to sell directly to cruise lines.
      Didn't work out, cancelled program.

  9. Onemiler Guest

    Ben do you honestly think there will be too many pilots at commercial airlines? Isn't there a looming shortage as many pilots are aging out?

    1. Brett Guest

      He just never misses an opportunity to bash pilots. Someone with several thousand lives in their hands every time they go to work and he gets upset that they are paid according to their value.

      Massive aircraft orders, looming retirement bubbles, robust jobs and gdp data, packed airports. All the more reason for the sky to fall, I guess.

  10. Exit Row Seat Guest

    These pilots work under a union contract which probably states "last hired, first fired". Those that will leave are the youngest or lowest on the roster. Those that will ride it out are older or most senior. Won't be too much of an economic savings to FedEx.
    Might have been better to offer an Early Out program. From my past experience, these seem to be very effective at culling the herd.

    1. AD Diamond

      Yes, but they're stuck with the entire cost of an early out program. In this case someone else is paying a good chunk of the cost.

Featured Comments Most helpful comments ( as chosen by the OMAAT community ).

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Leigh Guest

We’re laughing at you. You think it SIMPLE? I needed a laugh today. Thanks!

1
AD Diamond

Yes, but they're stuck with the entire cost of an early out program. In this case someone else is paying a good chunk of the cost.

1
Lune Guest

Maybe so sir... But not today.

1
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