Editor’s Note: This article originally appeared on FreightWaves.com.
FedEx will shut down pilot bases in Alaska, California and Germany as part of the company’s aggressive campaign to eliminate billions in structural costs by fiscal year 2027 by streamlining operations and networks, FreightWaves has learned.
Pilots domiciled in Anchorage, Los Angeles and Cologne Bonn Airport in Germany who fly two older aircraft types will gradually transition to other bases in the FedEx (NYSE: FDX) network, the company said in an email statement. The Cologne hub hosts crews for medium-size Boeing 757 freighters, while Ted Stevens Anchorage International Airport and Los Angeles International Airport are home ports for McDonnell Douglas MD-11 pilots.
“As the global business environment continues to evolve, FedEx has made the decision to relocate its pilots and close its 757 crew base in Cologne, Germany (GHN) and its MD-11 crew bases in Anchorage, Alaska (ANG) and Los Angeles, California (LAX). The decision only affects the base of the crews operating these flights and will not impact our current service,” FedEx said. “Our operations in these markets continue to play an important role in the global FedEx network and the flexibility of this network enables us to make adjustments that best meet the needs of our customers throughout the world. As with any base closure, the process is a gradual one and this relocation will occur without any disruption to our operations.
FedEx Express positions pilots across the U.S., Europe and Asia to increase efficiency. Living in the same city where flights originate allows pilots to have the longest layovers and makes scheduling easier in contrast to living in remote locations and having to commute to the base for the next duty cycle.
FedEx also has pilot bases at its global hub in Memphis, Tennessee, as well as regional hubs in Indianapolis; Oakland, California; and Guangzhou, China.
The airline closed its Hong Kong pilot base in late 2021 because draconian COVID quarantine requirements for pilots returning from overseas trips significantly hampered its ability to operate efficiently. Most pilots were relocated to Oakland.
The base closures are part of a multilayered cost initiative since last fall to right-size operations with the downturn in international and e-commerce shipping volumes as well as make long-term transformational changes. A restructuring, announced earlier this month, will see FedEx combine separate air, ground and parcel businesses under one roof to improve network efficiency. The efforts, launched after FedEx’s operating income significantly underperformed, are expected to generate $6 billion in permanent cost reductions.
A major focus is efficiently deploying crews, aircraft and commercial linehaul.
FedEx plans to save $700 million per year in its air network by rerouting nonpriority shipments to ground transport and third-party carriers, deemphasizing its hub system in favor of more direct routes and consolidating other functions. The company is also accelerating the retirement of its MD-11 fleet by two years. FedEx operated 58 of the older, tri-engine jets and 119 Boeing 757-200s as of March 1.
FedEx officials have said they will reduce flight hours by more than 10 percent this quarter compared to last year and over the long term invest less in future aircraft as more flying is outsourced.
FreightWaves first reported in late March that FedEx planned to close its heavy maintenance facility at LAX next year and move those functions to its large regional hub in Indianapolis.
The closure of the pilot bases raises uncertainty for FedEx pilots as they try to close out a contract deal after two years of talks. Earlier this month pilots began voting on whether to give union leaders a mandate to call a strike if federal mediation and other steps fail to break the impasse.
“In the final stages of contract negotiations, senior FedEx executives have introduced career-altering changes for the dedicated pilot — a corporate-wide restructure with a new emphasis on outsourcing, pilot base closures, forced pilot downgrades (which equates to a pay reduction) and a push toward moving Express freight on slower modes of transport, essentially cannibalizing the FedEx Express flight network,” the Air Line Pilots Association said in statement last week marking FedEx’s 50th anniversary.
The strike authorization vote closes on May 17.
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