Santa's sleigh cannot fly without its pilot.
With the peak holiday shipping season fast-approaching, global package delivery giant FedEx is paying retirement-age pilots bonuses of $40,000 — and potentially as much as $110,000 — to keep them flying into next year, according to two sources with knowledge of the matter and a contract seen by Reuters.
The bonuses, outlined in the latest pilot contract and previously unreported, reveal that a wave of pilot retirements, global pilot shortages and rising cargo demand fueled by the growth of global e-commerce are straining the world's largest air delivery fleet.
Any problem in maintaining capacity for FedEx, which many economists consider a barometer of U.S. economic strength, disrupts supply chains at a time when they are already being destabilized by international trade tensions.
FedEx and rival United Parcel Service, which is trying to recruit hundreds of pilots this year but is not paying bonuses, play a crucial role in global supply chains from aerospace to retail, particularly during the holidays when average daily delivery volumes can double.
FedEx spokeswoman Bonny Harrison declined to comment on pilot pay or its use of bonuses to manage the timing of retirements. She did point to details of a pilot recruitment campaign it launched publicly in April and said FedEx had about 5,000 aviators on its payroll.
"FedEx Express is well staffed with pilots at this time, however we're always looking toward the future," Harrison said.
Two senior FedEx managers familiar with the strategy told Reuters the company offered cash bonuses to retain retiring pilots through the holiday shipping surge that stretches from the U.S. Thanksgiving holiday in November through year-end.