A300Capt
Freight Dawg
FedEx, pilots talking contract
Tough negotiation reminiscent of '99
By Jane Roberts
Contact
March 4, 2004
FedEx Express and its 4,100 pilots opened contract negotiations
Wednesday on a stage likely as contentious as the last round five years ago.
While neither side would discuss specifics of the all-day meeting, key
concerns for the pilots are quality of life issues, pay and the security of
their pension plans.
"The overwhelming issues are going to revolve around addressing work
rules," said David Webb, chairman of the FedEx unit of the Air Line Pilots
Association.
Among other things, the rules determine how many days a month pilots
are required to work and how many additional days they may be called in.
The No. 2 issue is pay.
The average FedEx pilot makes $167,000 a year and works 13 days a
month, according to data provided by FedEx.
The average household income in the United States is $42,409; in
Memphis, it was $63,680, according to the 2000 Census.
While the economic environment seems to be improving, analysts doubt
FedEx is in any mood to be generous with its only unionized labor group.
"The price of fuel is eating up what might have gone to labor," said
Michael Boyd, principal of the Boyd Group, an aviation consulting firm in
Evergreen, Colo. "FedEx is going to have a difficult time entertaining
anything that says higher costs."
In 2003, revenues at FedEx Express surpassed $16.3 billion, up more
than 6 percent from 2002. But operating income since 2001 has dropped more
than 7 percent as the delivery giant grapples with decreasing demand for its
domestic Express business and double-digit increases in fuel and maintenance
costs.
"The last time the pilots threatened to walk, Fred Smith told them
very eloquently 'You walk, I'll replace you,' " Boyd said.
He doubts it's possible now, even though about 10,000 pilots are
available for work, many on furlough from passenger lines.
Because new hires start at the bottom of the seniority scale, Kit
Darby, head of pilot consulting service Air Inc., doubts a pilot surplus
will have any impact on negotiations.
"They don't fly the same planes, and they all would have to be
trained, which is very expensive," he said.
While cargo carriers have not suffered nearly as much as passenger
carriers since 9/11, they have been affected by the general downturn in the
economy.
"Stress on the industry certainly has gotten the pilots' attention
that things are bad in some places," Darby said.
Most passenger carriers have cut their pilot numbers by double digits
since 1999. US Airways leads with nearly a 29 percent reduction; Continental
and United follow with cuts of more than 14 percent.
"The good news is that boxes are not afraid to get on airplanes; boxes
aren't hassled by security; and boxes don't get sick with SARS," said Darby,
who compares the first days of labor negotiations to chickens "throwing dirt
in the air. . . . The openers on both sides at best are wish lists."
The problem the sides have had in the past, including a vote to strike
in 1998, is lack of trust, Darby said.
"The way to make a deal is to find some way to build consensus," which
usually happens through good information, he said. "What's offered can be
negotiated, assuming you understand where you are in relation to others."
Neither side has any idea how long the talks will last. FedEx has
cleared pilots on the negotiating committee from assignments through the end
of the year.
"The length of the talks really depends on if FedEx walks in looking
for concessions," Webb said. "The average pilot does not believe FedEx needs
or can justify any concessions."
- Jane Roberts:
Tough negotiation reminiscent of '99
By Jane Roberts
Contact
March 4, 2004
FedEx Express and its 4,100 pilots opened contract negotiations
Wednesday on a stage likely as contentious as the last round five years ago.
While neither side would discuss specifics of the all-day meeting, key
concerns for the pilots are quality of life issues, pay and the security of
their pension plans.
"The overwhelming issues are going to revolve around addressing work
rules," said David Webb, chairman of the FedEx unit of the Air Line Pilots
Association.
Among other things, the rules determine how many days a month pilots
are required to work and how many additional days they may be called in.
The No. 2 issue is pay.
The average FedEx pilot makes $167,000 a year and works 13 days a
month, according to data provided by FedEx.
The average household income in the United States is $42,409; in
Memphis, it was $63,680, according to the 2000 Census.
While the economic environment seems to be improving, analysts doubt
FedEx is in any mood to be generous with its only unionized labor group.
"The price of fuel is eating up what might have gone to labor," said
Michael Boyd, principal of the Boyd Group, an aviation consulting firm in
Evergreen, Colo. "FedEx is going to have a difficult time entertaining
anything that says higher costs."
In 2003, revenues at FedEx Express surpassed $16.3 billion, up more
than 6 percent from 2002. But operating income since 2001 has dropped more
than 7 percent as the delivery giant grapples with decreasing demand for its
domestic Express business and double-digit increases in fuel and maintenance
costs.
"The last time the pilots threatened to walk, Fred Smith told them
very eloquently 'You walk, I'll replace you,' " Boyd said.
He doubts it's possible now, even though about 10,000 pilots are
available for work, many on furlough from passenger lines.
Because new hires start at the bottom of the seniority scale, Kit
Darby, head of pilot consulting service Air Inc., doubts a pilot surplus
will have any impact on negotiations.
"They don't fly the same planes, and they all would have to be
trained, which is very expensive," he said.
While cargo carriers have not suffered nearly as much as passenger
carriers since 9/11, they have been affected by the general downturn in the
economy.
"Stress on the industry certainly has gotten the pilots' attention
that things are bad in some places," Darby said.
Most passenger carriers have cut their pilot numbers by double digits
since 1999. US Airways leads with nearly a 29 percent reduction; Continental
and United follow with cuts of more than 14 percent.
"The good news is that boxes are not afraid to get on airplanes; boxes
aren't hassled by security; and boxes don't get sick with SARS," said Darby,
who compares the first days of labor negotiations to chickens "throwing dirt
in the air. . . . The openers on both sides at best are wish lists."
The problem the sides have had in the past, including a vote to strike
in 1998, is lack of trust, Darby said.
"The way to make a deal is to find some way to build consensus," which
usually happens through good information, he said. "What's offered can be
negotiated, assuming you understand where you are in relation to others."
Neither side has any idea how long the talks will last. FedEx has
cleared pilots on the negotiating committee from assignments through the end
of the year.
"The length of the talks really depends on if FedEx walks in looking
for concessions," Webb said. "The average pilot does not believe FedEx needs
or can justify any concessions."
- Jane Roberts: