US FedEx taking advantage of UPS pilots’ strike vote

With a majority of UPS’ pilots recently voting to strike, analysts say FedEx is taking advantage by offering its 4,300 pilots more than USD500 million in raises and signing bonuses if they agree to work under their 1999 contract and cease negotiations.

“If you are Brand A and you see Brand X in negotiations, your greatest desire is to get your deal done first so the other guy is forced to bargain based on your deal,” said David Field, Americas editor of Airline Business, a London-based monthly magazine. “Whoever signs first stands to have a 1 percent or 2 percent advantage.”

The Independent Pilots Association, which represents Atlanta-based UPS’ 2,483 pilots, and UPS company officials have been in federal mediated talks since last June but have not been able to reach agreement on issues involving scheduling, scope, compensation, pension and benefits.

Last week, 99 percent of the UPS pilots who voted approved a strike authorisation. Under the Railway Labor Act, the pilots can’t strike while mediated talks are ongoing and no timetable has been set for when the talks will end.

The two sides are scheduled to meet again on Monday and May 26.

UPS has an air hub in Louisville, Ky.

Despite FedEx’s offer two weeks ago, the company’s pilots say it’s “throwing money at problems” and ignoring the 14 months they have spent in negotiations and keeping current work rule language intact, which could force them to fly more hours without additional pay.

A union memo issued last week states: “Every pilot, every pilot’s spouse and every pilot’s dog need to understand that this attempt to bypass the negotiating committee is about derailing our attempts to improve work rules.”

But FedEx spokesman Maury Lane told The Associated Press on Sunday that the offer is intended to benefit pilots.

“This would only extend our pilots industry leading pay and benefits package,” Lane said.

The signing bonuses FedEx is offering are tied to seniority and max out at USD40,000 for 15-year captains and second officers. The offer, which lets pilots choose among a three-, four- or five-year contract, includes 3 percent annual raises.

Over two years, it also would pay someone who is now a first-year second officer a USD19,000 signing bonus. By fiscal year 2007, that pilot lowest on the ladder at FedEx would be earning USD84,640.

UPS MD11 captain Lee Collins said “that looks livable for a first-year guy.”

“Our first year guys make less than USD30,000 in salary,” said Collins, adding that he had “sensed for some time” that FedEx was trying to sign first. “If the FedEx guys get this, the UPS guys are going to want at least that, if not more.”

According to UPS, the average earnings for an active UPS pilot in 2004 was USD175,830. The company and its pilots union have been trying to negotiate a new contract for more than two years.