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FedEx Corp expects its air express unit will lose half of its business with the Postal Service when an existing contract expires, making more pilots expendable. The Postal Service three years ago began shifting a large amount of volume from air to ground transportation to reduce red ink and become more competitive. Declining postal volumes have been a significant drag on FedEx Express’ recent performance, company officials publicly acknowledge. Postal delivery at 29 daytime cities where FedEx flies domestically is in jeopardy of being eliminated at the end of the government’s fiscal year. The loss of a substantial portion of Postal Service work means FedEx will have 200 to 300 more excess pilots by October. The cargo airline plans to lower guaranteed flight hours for pilots and offer early retirement packages because it already has hundreds of surplus pilots with the shipping market in a prolonged downturn.

PostCom Bulletin / Freight Waves