FedEx pilots reject tentative deal, monitored talks likely

July 24 (Reuters) – FedEx pilots have rejected a preliminary contract agreement with the package delivery firm and the two sides will reopen negotiations, likely under the supervision of the National Mediation Board, the company and the pilots’ union said on Monday.

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

FedEx shares were nearly flat in late trading, down just 0.3% to $258.80.

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

The preliminary FedEx agreement included a 30% pay increase and a 30% increase to the pilots’ old pensions.

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

American Airlines ( AAL.O ) and the Allied Pilots Association are revising their preliminary agreement after the United deal. Over the weekend, American Airlines pilots indefinitely postponed their ratification vote after the airline increased its offer.

With fewer pilots and rising demand, American unions have had increased bargaining power in negotiations over the past year.

Meanwhile, FedEx rival United Parcel Service ( UPS.N ) is in contract talks with 340,000 of its employees who sort and deliver packages. That UPS contract expires at midnight on July 31st. If those workers strike, UPS pilots said they would also stop work.

Reporting by Priyamvada C in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Devika Syamnath, Susan Heavey and Hugh Lawson

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