FDX pilots approve 5-year pact

Firm's first labor contract calls for improved pay, better flight schedules

Labor contract

February 05, 1999|By BLOOMBERG NEWS

MEMPHIS, Tenn. -- FDX Corp.'s pilots approved a five-year agreement granting more pay and better flight schedules, the first labor contract at Federal Express, the world's largest express-delivery company.

About 86 percent of the 3,300 pilots' union members voted to approve the contract. The accord gives FedEx pilots, who earn an average salary of $142,000, a 17 percent pay increase over five years, making them the second-highest paid among U.S. airlines, said Morgan Keegan Inc. analyst Arthur Hatfield.

The pilots "haven't had a pay increase in several years, so it's a good deal," Hatfield said. Union officials had said this week that they expected their members to approve the contract.

The accord ends a five-year dispute between FedEx and the union. The pilots threatened to strike during last year's holiday season to protest the lack of progress in contract talks, only to back down when FedEx hired outside airline and trucking companies to make deliveries if needed. Pilots also feared they could lose their jobs.

Pilots also received contractual protection against a computerized scheduling system they said forced them to fly long routes with little rest.

The pilots had rejected two agreements, most recently in March when they voted down an agreement that would have provided pay raises of 11 percent over three years and pension improvements.

FedEx reached a tentative agreement Dec. 17 with the pilots, the only unionized workers among the company's 140,000 employees.

Pilots had tried to craft a contract with the company since 1993. The Air Line Pilots Association, which represents pilots at other U.S. airlines, spent three years negotiating a contract. When members rejected that proposed contract in 1996, ALPA was rejected in favor of the independent FedEx Pilots Association.

FDX shares fell $1.0625 yesterday to close at $81.9375.

Pub Date: 2/05/99

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