FedEx Tells Pilots To Quit, Work For Regional Airline

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.

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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

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

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?