Fed Ex furlough

[MCDU]

The facts

Subject: FedEx Pilot over manning road map





Suspense:

02/28/09

Approved:

By now, most of you are aware that the Company is taking significant actionon a broad basis in response to the deteriorating economic conditions weface. In this environment it is critical that we find the most efficientmeans of servicing our customers. Doing so entails an analysis of ourroute structure, fleet requirements and staffing assumptions. The purposeof 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 over manned state that cannot be sustained anylonger. Although we have worked very hard to find and justify additionalflying in order to offset our over-manned situation, it is now clear thatthose efforts will be overshadowed by macro-economic conditions. AirlineScheduling has dramatically reduced the flight schedule to more correctlymatch the airplane capacity with market demand. This reduction in flyingcontributes additional surplus pilots to our already excess flightcrew member staffing and will more than offset any additional flying we maybe able to generate. To be a little more specific, the following is a listof factors that are required and/or contribute to this situation:

 

[MCDU]

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 yearthrough 2012•Age 60 retirement change (Fair Treatment for Experienced Pilots Act)With these business realities in view, earlier today, we advised ALPA ofour intention to reduce the Minimum Bid Period Guarantee to the minimumsset forth in Section 4.A.2.b. of the contract (48 CH in a four week bidperiod and 60 CH in a five week bid period). This is effective beginningwith the February, 2009 bid period. In February, we expect average BLG’sto be well above those minimums. Conditions are very fluid and we will beconstantly reevaluating the situation. As we have consistently done in thepast, we will mitigate crew position staffing concerns to the extentpracticable with BLG management. Contract provisions described in Section25.D. continue to apply to line construction and we will make every effortto balance line values where possible.An excess posting on most aircraft types is targeted for the February/March2009 timeframe due to the factors mentioned above and especially the largenumber of aircraft scheduled for storage. This will create further downward pressure on junior pilots in crew positions where the over-manningsituation is most acute.Section 23, Furlough, remains a possibility depending upon the severity ofthe continued economic downturn. Current projections indicate that revenueoperations require fewer than 4,000 active pilots for the next severalyears. Considering the slowing rate of attrition, this conditiontranslates to surplus pilots even with reduced BLG’s (the surplus is over700 if one assumes historically normal BLG’s). Retirement forecastsindicate no more than 35 to 50 pilots per year will retire for the nextthree years. After 2012, retirement rates are expected to return to ratesof 150 to 200 per year through 2017, as were anticipated prior to theregulated age change.The economic crisis will have a long lasting impact on FedEx – an impactthat will be felt years after the economy rebounds. This is particularlytrue at FedEx Express because we offer the premium priced services in theFedEx portfolio. Customers who have switched to lower priced services arenot likely to switch back even in better times. Also, many customers aredownsizing in ways that will reduce the number of packages they ship withus well into the future. In fact, some of our current customers may nolonger be in business by the time the economy rebounds. These realitiesdictate that FedEx take measures to permanently balance our cost withexpected 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 teamsees ahead of us. These changes and realignments are not easy for anyoneconcerned, however, the need to make adjustments, carefully realigningschedules and aircraft lift to load requirements to contain costs andmanage the airline realistically, is paramount. By implementing thesemeasures, we aim to secure the future of our operation and our collectivefutures. Regardless of your status and position on the seniority list, itis imperative that we all stay focused and continue to operate safely andreliably despite all of the external pressures we are facing.Thank you for your time, dedication and continued professionalism,

Thats the Memo. M

 

[milky]

One of the best posts I have read on FI.

You have the big picture - at times you are going to scratch your head with some of the rebuttals around here.

Keep em coming.

fv

Be careful agreeing with me. Reality and common sense are hated around here.

 

[gearup5]

Age 60 screws another group of folks.

 

[DH2WN]

Age 60 screws another group of folks.

Amen.... You can blame our SWA "brother" for that one.

 

[rajflyboy]

You guys complain how airline CEOs run airlines into the ground and make a lot of money doing it. Then, when management is proactive and sees an overmanning situation before it actually occurs, they are disloyal to their employees by giving you a heads up that they are going to have to do something before it becomes a problem for the viability of the company. Which way do you want it? Manage the company and keep it viable for shareholders or do whatever it takes to just keep jobs for all current employees no-matter-what? Despite what we would like to believe, companies are in business to make a profit which usually provides jobs. The companies are NOT in business to make jobs.

All that being said, I think a company that wants loyalty from its employees will do what it can to minimize the hardship on its employees, but it is a fact of life that companies grow and shrink. If they do not keep up with reality, they fail. Then, there will be NO jobs left at the airline (unless the government bails them out... don't get me started on that).

I personally hope that the company is able to keep all of the pilots and still stay profitable.

What part of "Fedex is making a Profit" do you NOT understand?

The statements you make would be true if the company was not making money but thats simply not the case.

 

[Propsync]

What part of "Fedex is making a Profit" do you NOT understand?

The statements you make would be true if the company was not making money but thats simply not the case.

Past practice does not guarantee future results. I don't want to operate full throttle until we're out of money, like nothing is wrong. They see something, and they are doing something about it. If they're wrong, they will have saved the company a ton of money. If they are right, they will put the company in much better shape than the competition coming out of the back of this. Either way, I hope what they are doing is making the company viable in really tough times, something they really haven't done (or needed to do) yet with all the opco's in the mix.

That said, I still feel more layoffs and furloughs are to come. Good luck to all of us, 2009 looks like another doozie.

 

[rajflyboy]

Past practice does not guarantee future results. I don't want to operate full throttle until we're out of money, like nothing is wrong. They see something, and they are doing something about it. If they're wrong, they will have saved the company a ton of money. If they are right, they will put the company in much better shape than the competition coming out of the back of this. Either way, I hope what they are doing is making the company viable in really tough times, something they really haven't done (or needed to do) yet with all the opco's in the mix.

That said, I still feel more layoffs and furloughs are to come. Good luck to all of us, 2009 looks like another doozie.

I guess some people just Love Layoffs!!

500 Million profit and then laying off. Great place.

 

[Yuppyguppy]

Typical management

 

[Propsync]

I guess some people just Love Layoffs!!

500 Million profit and then laying off. Great place.

You don't get it. Just move on.