FedEx pilots reject initial deal, moderated talks likely

(Reuters) – The company and the pilots union said on Monday that FedEx pilots had rejected a preliminary contract deal with the package delivery company and that the two sides would likely reopen negotiations under the supervision of the National Mediation Council.

The Airline Pilots Association (ALPA) did not explain why members voted 57% to 43% to reject the deal. FedEx (FDX.N) said it was “disappointed” in the pilots union’s vote, adding that it “will have no impact on our service.”

FedEx shares were near flat late in the session, down just 0.3% at $258.80.

“Our members have spoken and we will now regroup,” FedEx ALPA President Capt. Chris Norman said in a statement. The union represents 6,000 FedEx pilots.

FedEx’s interim deal included a 30% pay increase and a 30% increase in old pensions for pilots.

Earlier this month, United Airlines (UAL.O) and its pilots — also represented by ALPA — announced an initial deal that included a cumulative pay increase of up to 40.2%.

American Airlines (AAL.O) and the Allied Pilots Association are reviewing their initial deal after the UN agreement. Over the weekend, American Airlines pilots indefinitely postponed their approval vote after the airline strengthened its bid.

With fewer pilots and rebounding demand, US unions have enjoyed enhanced bargaining power in negotiations over the past year.

Meanwhile, FedEx competitor United Parcel Service (UPS.N) is in contract talks with the 340,000 of its employees who sort and deliver packages. This UPS contract expires at midnight on July 31st. If those workers went on strike, the UPS pilots said they would be out of work, too.

Additional reporting by Priamvada C in Bengaluru and Lisa Bertlin in Los Angeles; Editing by Devika Siamnath, Susan Heavy and Hugh Lawson

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