PEOPLE SERVICE PROFIT?

FEDEX PILOTS TAKE FRUSTRATIONS TO WALL STREET AND MEMPHIS

On April 15, FedEx Pilots received a response from the National Mediation Board regarding our request for Proffer of Arbitration. The National Mediation Board denied the request, directing continued mediated negotiations with FedEx Corporation. Please find the document attached here.

For 50+ years, FedEx pilots helped build the Company by delivering exceptional and reliable service to its customers around the world. During the pandemic, when the world shut down, FedEx pilots delivered. We flew across an uncertain globe, exposing ourselves to unknown risks in order to keep the world economy intact and help FedEx achieve record profits. FedEx pilots met the demand needed to supply the world with lifesaving supplies, equipment, and vaccines while being exposed to risks that many were able to avoid.

Now, FedEx Pilots have been in prolonged negotiations with FedEx management since May 2021 including federal mediation with the National Mediation Board. During this time, airlines such as American, Delta, United, and, most recently, Southwest have made the right choice to invest in their pilot employees with solid contracts. FedEx is falling behind.

Despite FedEx claiming they simply can’t afford to pay its pilots what has now become industry standard, Company equity has been at a steady climb since the contract negotiations began. Make no mistake, these profits are built on the backs of FedEx pilots and other employees.

Instead of investing in its employees like other airlines in the industry, FedEx management has prioritized short-term gains and senior executive profits in the form of stock buybacks.

From the time our current 2015 CBA was ratified FedEx has returned over $21.2 billion to shareholders through repurchases and dividends and proudly increased the Company’s quarterly dividend over sevenfold.

During the first half of fiscal 2024, FedEx paid dividends worth $635 million.

During fiscal 2023, FedEx paid dividends worth $1.17 billion.

During fiscal 2022, FedEx paid dividends worth $793 million (higher than the $686 million dividend payout in fiscal year 2021).

Six months after negotiations opened in May 2021, while the Company was claiming that they simply could not afford to deliver the contract that our pilots have earned, the Board of Directors authorized a $5 billion Stock repurchase program. During the 2023 fiscal year, the Company repurchased shares worth $1.5 billion. In the 1st half of fiscal year 2024, FedEx repurchased shares worth $1 billion.

Buybacks offer quick gains in stockholder value and allow higher echelons of management to rake in profit while bemoaning Companywide cutbacks and layoffs. But investing in employees lays the foundation for sustainable, long-term growth. In an increasingly competitive pilot job market, investing in the pilots’ contract retains talent already on the property and positions management to recruit the next generation of FedEx pilots. It also stabilizes the workplace as FedEx seeks to reform its structure.

Instead, the Company is driving unprecedented double-digit monthly attrition to airlines that prioritize their employees.

We ask our President, CEO and Director Raj Subramaniam, our FedEx Senior Executives, and our Board of Directors: What has happened to Fred Smith’s People first philosophy?

Instead of trying to convince pilots that there is no more money while spending billions on those stock buybacks, FedEx must come to the table with an offer that recognizes our pilots’ value if it wants to remain a career destination in an increasingly competitive hiring market.