The said decision is also a part of the company's aggressive campaign – dubbed "DRIVE" – to eliminate billions in structural costs by the fiscal year 2027. It seeks to reduce costs to the tune of $4 billion by the end of fiscal year 2025, including $1.3 billion in its air network and international operations.
"FedEx is at a pivotal moment in history," FedEx President and CEO Raj Subramaniam told investors during the April 5 investor call. "We're transforming our operating model to be more flexible, efficient and an intelligent global network."
In the recent email statement regarding the closure, FedEx said 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 their network.
"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 and its MD-11 crew bases in Anchorage, Alaska and Los Angeles, California," the statement read. "The decision only affects the base of the crews operating these flights and will not impact our current service." (Related: FedEx's freight unit to begin furloughing employees next month due to reduced demand for delivery services.)
The carrier airline also has pilot bases at its global hub in Memphis, Tennessee, as well as regional hubs in Indianapolis, Oakland in California and Guangzhou, China.
FedEx Express positions pilots across America, 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.
Back in 2021, the airline closed its Hong Kong pilot base due to the strict Wuhan coronavirus (COVID-19) quarantine requirements for pilots returning from overseas trips, which significantly hampered its ability to operate efficiently.
The base closures are part of a multilayered cost initiative since last fall to right-size operations and make long-term transformational changes. A restructuring will see FedEx combine separate air, ground and parcel businesses under one roof to improve network efficiency as announced earlier in the month.
FedEx pilots to hold strike if contract negotiations are not finalized in May
FedEx pilots are now left in the middle of uncertainty as they try to close out a contract deal after two years of talks.
"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 and a push toward moving Express freight on slower modes of transport, essentially cannibalizing the FedEx Express flight network," the Air Line Pilots Association (ALPA) said in a statement.
Pilots for FedEx Express, represented by ALPA, picketed on Wall Street earlier this month and said it was "extremely disappointing" that contract negotiations remain open. Negotiations began in May 2021.
Meanwhile, they already 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. The strike authorization vote closes on May 17.
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