FedEx Pilots Take Another Step Toward 30 Percent Pay Raise

Leaders of the bargaining unit for FedEx pilots have approved a tentative contract first advanced by negotiators on May 30 that includes a 30 percent pay raise and improved pension benefits, the Air Line Pilots Association (ALPA) said late Monday.

No details were provided when the sides announced a preliminary labor agreement two weeks ago, and the FedEx Master Executive Council under ALPA didn’t even have time to review it. The signoff from union council chiefs means the deal will now go to rank-and-file pilots for a three-week ratification vote that begins July 5.

The new agreement would provide major pension improvements with alternative pension options, significant hourly pay rate increases, a retroactive recovery payment for the 18-month period when the contract was open for amendment and other quality-of-life improvements, according to an ALPA news release.

In addition to a 30 percent pay increase, pilots won a 30 percent increase to the legacy pension and a company-funded replacement for the legacy pension. ALPA said it is the largest investment in a pilot contract, on a per-capita basis, and that it substantially raises the bar on pilot retirement.

The Master Executive Council will share the full contract language with members, publish detailed information about the agreement online and go on the road to promote it.

“We took a membership-driven approach to these negotiations, with polling and direct feedback throughout the process. We negotiated an industry-leading contract and achieved improvements contract-wide. We look forward to presenting the agreement to our pilots for consideration,” said Master Executive Council Chairman Chris Norman, a FedEx captain. “The improvements to our retirement stand out. Not only did we accomplish major improvements to the existing pension benefit—improvements that we sought and management bitterly resisted in past negotiations — but we also crafted a new pension plan that sheds the negative funding aspects of our current plan. The new plan is completely sustainable and ensures that the costs of the plan charged to the company match the value that goes to the pilots. It’s a tremendous accomplishment.”

The specter of a strike overshadowed FedEx Express (NYSE: FDX) management as it tries to restructure the air network to cut costs while maintaining customer loyalty in a down market. The two sides were negotiating with the help of a federal mediator, and the union membership had given leaders the power to call a strike at the appropriate time.

A strike was not imminent because federal law governing airline labor relations requires both sides to follow a lengthy process before anyone can take unilateral action.

If ratified, the new contract will go into effect in August and become eligible for change in 2028.

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