More paycuts and possible furloughs coming to FedEx
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More paycuts and possible furloughs coming to FedEx
Pilot Over Manning Road Map
FCIF 08-0744 (Admin)
December 31, 2008
By now, most of you are aware that the Company is taking significant action on a broad basis in response to the deteriorating economic conditions we face. In this environment it is critical that we find the most efficient means of servicing our customers. Doing so entails an analysis of our route structure, fleet requirements and staffing assumptions. The purpose of this communication is to advise you where I believe we are right now, and where I think we are headed.
We are in a significantly overmanned state that cannot be sustained any longer. Although we have worked very hard to find and justify additional flying in order to offset our over-manned situation, it is now clear that those efforts will be overshadowed by macro-economic conditions. Airline Scheduling has dramatically reduced the flight schedule to more correctly match the airplane capacity with market demand. This reduction in flying contributes additional surplus pilots to our already excess flight crewmember staffing and will more than offset any additional flying we may be able to generate. To be a little more specific, the following is a list of factors that are required and/or contribute to this situation:
Reduced flight hours associated with route reductions and consolidation
Early retirement of DC10 aircraft.
Parking of A310 aircraft due to excess fleet capacity
Replacement of B727 aircraft with B757
Slower introduction of 777 airplanes into the system, 4 to 5 per year through 2012
Age 60 retirement change (Fair Treatment for Experienced Pilots Act)
With these business realities in view, earlier today, we advised ALPA of our intention to reduce the Minimum Bid Period Guarantee to the minimums set forth in Section 4.A.2.b. of the contract (48 CH in a four week bid period and 60 CH in a five week bid period). This is effective beginning with the February, 2009 bid period. In February, we expect average BLG's to be well above those minimums. Conditions are very fluid and we will be constantly reevaluating the situation. As we have consistently done in the past, we will mitigate crew position staffing concerns to the extent practicable with BLG management. Contract provisions described in Section 25.D. continue to apply to line construction and we will make every effort to balance line values where possible.
An excess posting on most aircraft types is targeted for the February/March 2009 timeframe due to the factors mentioned above and especially the large number of aircraft scheduled for storage. This will create further downward pressure on junior pilots in crew positions where the over-manning situation is most acute.
Section 23, Furlough, remains a possibility depending upon the severity of the continued economic downturn. Current projections indicate that revenue operations require fewer than 4,000 active pilots for the next several years. Considering the slowing rate of attrition, this condition translates to surplus pilots even with reduced BLG's (the surplus is over 700 if one assumes historically normal BLG's). Retirement forecasts indicate no more than 35 to 50 pilots per year will retire for the next three years. After 2012, retirement rates are expected to return to rates of 150 to 200 per year through 2017, as were anticipated prior to the regulated age change.
The economic crisis will have a long lasting impact on FedEx - an impact that will be felt years after the economy rebounds. This is particularly true at FedEx Express because we offer the premium priced services in the FedEx portfolio. Customers who have switched to lower priced services are not likely to switch back even in better times. Also, many customers are downsizing in ways that will reduce the number of packages they ship with us well into the future. In fact, some of our current customers may no longer be in business by the time the economy rebounds. These realities dictate that FedEx take measures to permanently balance our cost with expected volume and revenue levels for the extended future.
No-one likes to be the bearer of bad tidings. I feel strongly, however, that I owe it to you to be candid about the challenges our management team sees ahead of us. These changes and realignments are not easy for anyone concerned, however, the need to make adjustments, carefully realigning schedules and aircraft lift to load requirements to contain costs and manage the airline realistically, is paramount. By implementing these measures, we aim to secure the future of our operation and our collective futures. Regardless of your status and position on the seniority list, it is imperative that we all stay focused and continue to operate safely and reliably despite all of the external pressures we are facing.
Thank you for your time, dedication and continued professionalism,
Captain Paul E. Cassel
Vice President, Flight Operations
FedEx Express
FCIF 08-0744 (Admin)
December 31, 2008
By now, most of you are aware that the Company is taking significant action on a broad basis in response to the deteriorating economic conditions we face. In this environment it is critical that we find the most efficient means of servicing our customers. Doing so entails an analysis of our route structure, fleet requirements and staffing assumptions. The purpose of this communication is to advise you where I believe we are right now, and where I think we are headed.
We are in a significantly overmanned state that cannot be sustained any longer. Although we have worked very hard to find and justify additional flying in order to offset our over-manned situation, it is now clear that those efforts will be overshadowed by macro-economic conditions. Airline Scheduling has dramatically reduced the flight schedule to more correctly match the airplane capacity with market demand. This reduction in flying contributes additional surplus pilots to our already excess flight crewmember staffing and will more than offset any additional flying we may be able to generate. To be a little more specific, the following is a list of factors that are required and/or contribute to this situation:
Reduced flight hours associated with route reductions and consolidation
Early retirement of DC10 aircraft.
Parking of A310 aircraft due to excess fleet capacity
Replacement of B727 aircraft with B757
Slower introduction of 777 airplanes into the system, 4 to 5 per year through 2012
Age 60 retirement change (Fair Treatment for Experienced Pilots Act)
With these business realities in view, earlier today, we advised ALPA of our intention to reduce the Minimum Bid Period Guarantee to the minimums set forth in Section 4.A.2.b. of the contract (48 CH in a four week bid period and 60 CH in a five week bid period). This is effective beginning with the February, 2009 bid period. In February, we expect average BLG's to be well above those minimums. Conditions are very fluid and we will be constantly reevaluating the situation. As we have consistently done in the past, we will mitigate crew position staffing concerns to the extent practicable with BLG management. Contract provisions described in Section 25.D. continue to apply to line construction and we will make every effort to balance line values where possible.
An excess posting on most aircraft types is targeted for the February/March 2009 timeframe due to the factors mentioned above and especially the large number of aircraft scheduled for storage. This will create further downward pressure on junior pilots in crew positions where the over-manning situation is most acute.
Section 23, Furlough, remains a possibility depending upon the severity of the continued economic downturn. Current projections indicate that revenue operations require fewer than 4,000 active pilots for the next several years. Considering the slowing rate of attrition, this condition translates to surplus pilots even with reduced BLG's (the surplus is over 700 if one assumes historically normal BLG's). Retirement forecasts indicate no more than 35 to 50 pilots per year will retire for the next three years. After 2012, retirement rates are expected to return to rates of 150 to 200 per year through 2017, as were anticipated prior to the regulated age change.
The economic crisis will have a long lasting impact on FedEx - an impact that will be felt years after the economy rebounds. This is particularly true at FedEx Express because we offer the premium priced services in the FedEx portfolio. Customers who have switched to lower priced services are not likely to switch back even in better times. Also, many customers are downsizing in ways that will reduce the number of packages they ship with us well into the future. In fact, some of our current customers may no longer be in business by the time the economy rebounds. These realities dictate that FedEx take measures to permanently balance our cost with expected volume and revenue levels for the extended future.
No-one likes to be the bearer of bad tidings. I feel strongly, however, that I owe it to you to be candid about the challenges our management team sees ahead of us. These changes and realignments are not easy for anyone concerned, however, the need to make adjustments, carefully realigning schedules and aircraft lift to load requirements to contain costs and manage the airline realistically, is paramount. By implementing these measures, we aim to secure the future of our operation and our collective futures. Regardless of your status and position on the seniority list, it is imperative that we all stay focused and continue to operate safely and reliably despite all of the external pressures we are facing.
Thank you for your time, dedication and continued professionalism,
Captain Paul E. Cassel
Vice President, Flight Operations
FedEx Express
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411A
You really are a bit of an aggravating soul aren't you.
Are you REALLY happy that guys are losing their jobs, or are you just trying to wind them up?
Either way, it doesn't sit easily with the professionalism your job title and time in post professes.
Are you REALLY happy that guys are losing their jobs, or are you just trying to wind them up?
Either way, it doesn't sit easily with the professionalism your job title and time in post professes.
Last edited by Dengue_Dude; 6th Jan 2009 at 17:19. Reason: Recipient left out
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Quite frankly, Dengue_Dude, considering the fact that the Fedex folks are some of the best paid in the industry, and said cargo industry is in a rather nasty slump at the moment (a few exceptions), it certainly is not surprising that furloughs are in the cards.
Pay cuts are a distinct possibility.
I repeat, the gravy train has come to an abrupt halt.
It had to happen sooner or later...now is the time.
Like it or lump it...its a fact.Take your rose colored glasses off and have a look for yourself.
Pay cuts are a distinct possibility.
I repeat, the gravy train has come to an abrupt halt.
It had to happen sooner or later...now is the time.
Like it or lump it...its a fact.Take your rose colored glasses off and have a look for yourself.
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I've am now absolutely certain 411 doesn't know what he is talking about.
1. FDX is going through a transition period during a downturn in the economy
2. Contrary to rumor the 777 is on schedule with scheduled service to begin in Dec.
3. The 757 is slower in coming than expected because of the vendor doing the mods, not the company
4. FDx just picked up the option for 15 more 777s
5. The company is working with the union to prevent furloughs because furloughs really hurt everyone. It doesn't mean it won't happen just could happen.
Layoff until you get the whole story
1. FDX is going through a transition period during a downturn in the economy
2. Contrary to rumor the 777 is on schedule with scheduled service to begin in Dec.
3. The 757 is slower in coming than expected because of the vendor doing the mods, not the company
4. FDx just picked up the option for 15 more 777s
5. The company is working with the union to prevent furloughs because furloughs really hurt everyone. It doesn't mean it won't happen just could happen.
Layoff until you get the whole story
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2. Contrary to rumor the 777 is on schedule with scheduled service to begin in Dec.
Slack Demand Prompts FedEx 777F Slowdown
Dec 23, 2008
Darren Shannon [email protected]
The full deployment of FedEx's fleet of 15 Boeing 777 freighters will not be completed until 2013, two years later than initially planned by the U.S. cargo giant.
The freight operator was scheduled to take delivery of six 777Fs in 2010 and a further nine in 2011 under a deal that was finalized more than two years ago. However, in its most recent quarterly financial report the company says in December it "reached an agreement with Boeing to defer the delivery of the 777F aircraft by up to 17 months."
FedEx will now take delivery of four widebody freighters in both 2010 and 2011, a further five in 2012 and the last two in 2013, added the company.
This is the second change to FedEx's 777F delivery schedule to be detailed in the current U.S. Securities and Exchange Commission filing. In its fleet update, FedEx notes that as of Aug. 31 it was expecting to take delivery of four 777Fs in 2010, 10 in 2011 and one in 2012. However, in all previous fleet updates since the 2006 order, FedEx had said it would take all 15 by 2011.
Adding further confusion, Boeing's initial press release detailing the order said first delivery was scheduled for 2009, while FedEx's December SEC filing notes the latest delivery revision "will result in the deferral of approximately $275 million of commitments from 2009 to future periods."
This August revision indicates that Boeing told customers of strike-related delays to its 777F program before publicly acknowledging that first delivery to launch customer Air France had slipped about two months.
FedEx ordered the 777F after cancelling an order for 10 A380s. At the time the company said delays in the Airbus program - which pushed delivery of the first FedEx A380 from 2008 into 2009 - did not accommodate the cargo operator's expansion plan. That expansion plan has since been revised as global economic problems depress the world's cargo market.
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That expansion plan has since been revised as global economic problems depress the world's cargo market.
as his rose colored glasses are more rosey each day...apparently.
Heilhaavir knows the score.
