Originally Posted by
Spur
Except that labor cost at FedEx is classified as operating expense and not cost of goods sold. As a result increased labor costs have zero effect on 'Gross Profit'.
A more appropriate comparison of cost would be to total operating expense, or to operating profit. You are causing confusion by using a term which at Fedex differs little from revenue, but sounds alot like net income.
I stated the fact that FDX annual gross profit exceeds $30 billion. That's a fact and an appropriate use of the financial term. Maybe you would use a different comparison, but that does not make my comparison incorrect or confusing. It highlights the fact that the FAA's reasoning for exempting cargo carriers based on cost is flawed. I think we both agree FDX and UPS can afford to implement the changes. If the smaller cargo operations cannot compete in that environment, the free market says they will simply go out of business. Luckily, many of those jobs will be absorbed by the bigger companies. This certainly will be the case for many of the regional carriers in the passenger world since the cost of operating the 50 seat jets will surely increase under the new rules.