FedEx Change of Operations?
Scott Stratton, leader of FedEx's Air Line Pilots Association unit, said the union hadn't received an official briefing on the potential restructuring, but was open to talking.
FedEx declined comment.
Helane Becker, analyst with Dahlman Rose & Co., speculated FedEx would offer an early retirement program rather than using layoffs.
In 2003, with the economy still recovering from Sept. 11, 2001, terrorist attacks, FedEx dangled voluntary buyouts as part of a push toward 10 percent operating margins.
The offer got more takers than the company anticipated and trimmed about 3,600 from the payroll by June 30, 2005.
In 2009, the company eliminated 3,100 jobs, some of them involuntarily, in an effort to balance expenses against weak demand coming out of the great recession.
One round of those cuts slashed 1,000 jobs companywide, including an estimated 500 in Memphis, where FedEx employs about 30,000.
Becker said in a research note she expects FedEx to follow a strategy similar to what DHL outlined recently: increasing revenues and productivity and reducing costs.
"We believe the focus will be on replacing three-crew, three-engine aircraft with two-crew, two-engine aircraft," Becker wrote. "This will save approximately $500 million annually on maintenance costs, fuel costs and crew costs. Older aircraft comprise about 25 percent of FedEx's fleet, so the bottom line impact of $1 a share is very real."
FedEx Express' fleet modernization program calls for 48 Boeing 727s, four MD 10s and 10 MD 11s to be replaced by newer, more-fuel-efficient aircraft, including Boeing 757s, 767s and 777s over the next five years.
With Express margins languishing - the last three quarters were 4.4 percent, 5.2 percent and 5.3 percent, respectively - Becker and others believe fleet replacement and network rationalization will be accelerated.
"I think it's going to be more aggressive," she said. "They'll probably push it along and make it happen faster."
...Every aspect of your working life is covered, including safety, wages, benefits, pensions, seniority, schedules, dispute resolution, life insurance, clothing allowance and dozens of other issues. And before the company can change one thing, you have to agree to it.