I don't think the sky is falling.

That said, a cut in block hours is never a good thing...how bad would things have to get to invoke 4.A.2.b?

 

Well, how we enter and exit 4a2b and now 4a2c are spelled out on the contract. If it hits those parameters, I’m sure the company will execute those sections without hesitation.

 

For those that don’t know, this is pretty much what happened at UPS and what slowed the airline flying for a couple of years. They started trucking packages further and further taking away from the air side, mostly over the weekends. Fedex’s ground network has grown tremendously, wouldn’t surprise me they started trucking more packages.

 

Ground is the sector struggling the most.

 

Take a listen or read of the earnings call. CAPEX for 2020 and 2021 is in line with 2017-2019. This is what drove some confusion from some of the big investment firm folks on the call. They asked in a nut shell “so if you are making cuts why is the capex basically unchanged?” Thats when Fred got a little testy and said “look guys we have to replace older airplanes. Look at the data attached to the call for the reasons. Fuel savings, maintenance, reliability, etc.” We are not overstaffed currently we are just miss staffed and not balanced from the growing fleets to the dying fleets. Take a look at the airplanes that are to be retired in the next 2 years and then compare that number to the firm order deliveries we have over that same period. Guess what its a net gain or a wash at worst. The sky isnt falling this is a natural business cycle like all companies go through. Its probably a good wakeup call/innovation booster for the top brass at purple.

 

Agreed, if you didn’t listen to the call it’s hard to sift through all of the spin put on by the media. Make no mistake FedEx fell way short, but it’s not the whole story. Wall Street is obsessed with short term success which perpetuates the narrative of doom and gloom for purple. While there are many challenges with some “mistakes” made in the past, to me it is believable that FedEx is doing the best it can to position themselves for long term success and is what I value most.
Regarding another post above I don’t think it makes sense to stop hiring for 2020 although we will all surely find out in the near future. I think it will slow but in my eyes hiring must continue.

 

I think they overhired, big time. Most people are hanging on till age 65 or the Dec 31st before they age out. Most seat positions are not doing AVA in December, even on Dec 24th. Never seen that happen before. Next month we are out of peak, and will be even more over staffed. People are concerned about 4a2b (or I guess it’s 4a2c) coming back. I’m kind of alarmed.

 

That airbus is hampering your ability to rationally think haha. Look this isn’t the first time by a long shot that some fleets/seats had AVA and others didn't around Christmas. The big thing that helped the company with this no AVA around Christmas this year was them pulling out of the automatic AVA LOA. If your only looking at the bus bid pack/numbers you are getting a faulty picture from a dying fleet.

 

Everyone is entitled to their opinion, with that said big retirements hit at 2025 and while some will hang on until the end I wouldn’t be surprised if you see a lot of those folks punching out early 60-62. You can see it already happening. Think about the last time 4a2c was used, I don’t believe we are in the same territory, now if q3-4 are a bust I would likely change my thinking.

 

2025 is five years from now. I doubt they were hiring for 2025, they are doing what they always do.Overhire, underhire, too many, too few.

4a2c has never been used....but what concerns me is that we are doing poorly while the economy is going gangbusters. God help us if the economy takes a dip. I would like to be wrong.