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Airline Division News, Week Ending, September 10, 2016

Atlas Air Pilots Picket Corporate Headquarters, demanding a fair Contract

Holding signs reading “Our Families Deserve Better” and “Atlas Air Worldwide Holdings Pilots Ready to Strike,” pilots from major DHL and Amazon contractor Atlas Air are protesting outside the Purchase headquarters of their airline’s holding company, Atlas Air Worldwide Holdings (AAWW), to demand company executives stop denying them of a fair, industry-standard contract. This week marks the current contract’s amendable date – the date pilots are due a new contract by management. 

The current contract provided for negotiations to commence 270 days prior to the amendable date. AAWW executives met with Teamsters Local 1224 to negotiate new contract terms, but abruptly stopped discussions this past spring. Since then, AAWW has steadfastly insisted that the Atlas Air pilots merge their contract with the recently-acquired Southern Air pilots’ existing bankruptcy contract rather than amend and modify their contract, as required by federal law. 

AAWW owns three airlines that fly for DHL: Atlas Air, Inc., Polar Air Cargo, Inc. and Southern Air Holdings, Inc. The multi-million dollar company is trying to force pilots from the three carriers into a sub-standard contract that would have a devastating impact on pilots, their families and the entire cargo industry. As a result, AAWW pilots are increasingly leaving for better opportunities, and at a time when a pilot shortage is becoming an industry-wide concern, the company’s ability to keep up with the demands of DHL, Amazon and other customers could be at risk.  

“Atlas contracts with some of the world’s biggest and most profitable companies, and it isn’t too much to ask that the pilots who keep Atlas’ operation running have industry-standard pay and safety protections so our families have the stability we need and deserve,” said Mike Griffith, an Atlas Air captain who has been with the cargo carrier for 18 years. “Atlas needs to get serious now about working with us to come to a fair contract agreement, or pilots will keep leaving Atlas at a record rate and we won’t be able to deliver for our clients like Amazon and DHL.” 

Pilots from the three AAWW carriers and two other cargo airlines, ABX and Kalitta Air, recently voted with 99 percent support to strike should it be necessary. A strike would cripple DHL’s global operation as these carriers account for 70 percent of DHL’s total global flying, and AAWW is its largest contractor. A strike could also have a significant impact on  the e-retailer recently signed contracts with Atlas and ABX’s parent company, ATSG, for its Prime Air operation. 

AAWW and its biggest customers, DHL and Amazon, have all seen profits rise in recent years. Adjusted net income attributable in 2015 to AAWW’s common stockholders totaled $125.3 million, or $5.01 per diluted share, on revenues of $1.8 billion. DHL reported €59.2 billion (66.7 billion US dollars) in increased consolidated revenue this past year, with the express division – which includes the operation of AAWW – being its strongest and most profitable division. Amazon is posting record profits quarter after quarter: the second quarter of 2016 was its most profitable quarter yet, with $30.4 billion in sales and $857 million in profits. Prime, for which Atlas and ABX pilots fly, is one of Amazon’s most profitable divisions. 

Despite rising profits, AAWW has been trying to force pilots into sub-standard contracts that would suppress wages and lower quality of life issues for pilots at these carriers and throughout the industry.  According to a comparison study conducted by Teamsters Local 1224, AAWW pilots are paid considerably less and work much longer hours than pilots who fly for UPS or FedEx. Pilots at Atlas, Polar and Southern reported being forced to fly long hours with minimal rest time in between flights, which leads to dangerous fatigue.

Grievance Filed over Flairjet’s Use of Flight Options Nextants

Early last month, Flexjet Chairman Kenn Ricci announced that Flexjet acquired FlairJet Ltd. from Marshall Aviation Services. 

Later in the month Flight Global reported that Raymond Jones, the London‐based Managing Director of Flexjet Ltd., stated, “By the end of the year we also hope to start introducing the first Nextant 400XTis into the fleet.” The report, which also included statements from CEO Mike Silvestro, indicated that the 400XTis will be sourced from Flexjet’s U.S. fleet of 21 aircraft.  

On July 13, 2016, Arbitrator Herb Fishgold issued the Fence Agreement Award that provided protections for pilots and their work, as Mr. Ricci’s Directional Aviation Capital (“DAC”) conglomerate merged various operations. The Agreement includes the following provision: “Flight Options Aircraft shall not be sold, leased or transferred in any fashion to Flexjet LLC or One Sky Flight, LLC, or any subsidiaries to avoid or evade the terms of this Fence Agreement Award. In addition, this Fence Agreement Award shall be applied and interpreted pursuant to LOA 1-001, LOA 1-002 and LOA 1. Directional Aviation Capital of the 2010 Agreement.”

On September 2, Local 1108 filed the attached Class Action Grievance citing, “Said transfer and use of such Flight Options Aircraft is in direct violation and is in flagrant breach of the Fence Arbitration Award, Section 1.5 and the other provisions and obligations.” Arbitrator Fishgold will again preside over the dispute. Management has begun attempting to stall the arbitration process, stating that they are not able to meet to resolve this dispute until after January 1, 2017, just after the projected date senior executives plan to introduce the first Nexant aircraft into the Flairjet operation.  

Flight Options pilots have endured two furloughs, bogus management VSP offers, mass fleet “recalibrations,” displacements to lesser paying positions and, now, the elimination of what was once the most profitable and largest Beechjet fleet in the world. In a message to the membership, the Executive Board of Local 1108 said, “While the pilots are more than enthusiastic to see DAC expand its holdings to become a potential world aviation leader, we will not stand by silently as the pilots that were here from the beginning are brushed aside simply because of their pro-union beliefs and Mr. Ricci’s admitted vitriolic anti-union animus. We will continue to protect our work at every turn –– together –– as a Union of pilots for pilots.” 

Union continues to propose JCBA at Flexjet while Management pushes for Arbitration over Pilot Ratification

Flexjet ngotiations resumed on Tuesday morning, August 23, 2016, in Cleveland, OH. This was the second of two bargaining sessions scheduled in August to attain a Joint Collective Bargaining Agreement (“JCBA”)  

On Tuesday, the parties agreed to work in separate caucus developing new proposals. Wednesday morning formal bargaining began at 9:45 am. Flight Options and Flexjet Sr. VP of Flight Operations Joe Salata presented the Company’s Integrated Collective Bargaining Agreement (“ICBA”) proposals for Sections 9—Uniforms, 29—Retirement Plan and 30—Duration.  

As with previous management offers; these documents were not consistent with the type of negotiations required by the Railway Labor Act (“RLA”). Management’s proposals tracked their intended goal of integrating the Flexjet pilots into the existing Flight Options pilots’ 2010 Collective Bargaining Agreement (“2010 CBA”) without affording either pilot group any improvements to wages, benefits or working conditions.  

After a brief exchange with Union negotiators, the Company declared they had no other proposals to offer. The Union negotiators requested the status of all Union JCBA proposals currently in management’s court. Mr. Salata responded that the Company was reviewing and drafting counter-proposals. He declared that management was “prioritizing its drafts” to pursue their minimal integration philosophy. When asked if the Union will see JCBA counter-proposals any time soon, the response was "not necessarily."

Next, the negotiators requested the status of all of the Union’s past proposals for various Letters of Agreement (“LOA”). When specifically asked about the proposed LOA to give Flexjet pilots disciplinary representation, management declared they wouldn’t negotiate over it until after the implementation of their purported ICBA. Management offered no definitive response to the Merger Protocol LOA and said the Flexjet New Hire and Professional Standards LOAs and ASAP Memorandum of Understanding (“MOU”) were “under consideration.” 

The Union’s VSP LOA generated the most conversation. Management declared that a VSP “no longer meets the same goal as was needed earlier in the year.” When asked if the VSP LOA was being rejected, the Company’s negotiators would only reply that the VSP does not currently meet their goals, without explaining what those goals were.  

After some follow-up debate and questions about the availability of previously requested documentation, the morning’s face-to-face bargaining session ended at 10:30 am. When they reconvened later in the day, the Union negotiators presented JCBA Sections 7—Displacement, Furlough & Recall, 10—Sick Leave and 26—Internment, Missing, Hostage, Prisoner of War & Hostile Areas of Operations. Following a brief question and answer session, the parties broke for lunch at 1:00 pm.  

Union negotiators presented a Joint Negotiating Committee (“JNC”) Release from Duty LOA. Because the Company has refused to address the Union’s Merger Protocol LOA; the provisions of the JNC Release from Duty LOA were broken out into a separate document. This was done to facilitate reaching agreement regarding expenses and duration of leave required for members of the JNC to attend future bargaining sessions. Management had no questions, comments or responses to this LOA.  

The afternoon session concluded with Union negotiators asking if the previously requested Flexjet ASAP MOU information had been received. Management stated they had been unable to contact the person at Company Headquarters that could provide the needed information.  

Members are reminded that they are welcomed and invited to join the Union’s negotiators at the next bargaining session. Additionally, the content of ALL proposals and counter-proposals from both your Union and management are accessible on the IBT Local 1108 Virtual Union Hall (“VUH”). A read-only forum specifically dedicated to JCBA negotiations has been developed and is now available for viewing. Please don’t delay in registering on the VUH at: and reviewing existing and future proposals. 

 Local 2727 AMT’s and Related Picket UPS 

Teamsters Local 2727 AMT’s and related classifications picketed at customer locations in Indiana this week protesting deep concessionary contract proposals that would significantly increase health care costs and do little to improve wages for its members, said Local 2727 President Tim Boyle. “In 2013 insurance premiums for our members were raised upward of 500 percent. Now the company proposes an additional 430 percent increase in insurance premiums in the first year of a new contract. Efforts to negotiate a fair contract for workers have proven fruitless due to the vast differences in positions over health insurance benefits.”   

Teamsters’ Local 2727 members are planning more protests and will continue to inform the public of the unmitigated corporate greed UPS is exhibiting through informational pickets and other means. “I had hoped that we would not need to make the strike preparations but the company is leaving us little choice,” Boyle said.  

Bargaining sessions are scheduled to resume October 11, 2016 through October 14, 2016 at the National Mediation Board in Washington, D.C.

Airline Industry News 

Governmental and Regulatory

Transportation Security Administration Administrator Peter Neffenger will visit Capitol Hill to meet with individual members of the House. Topics of discussion will include security on flights to and from Cuba, TSA funding, security checkpoint wait times and more. 

The Federal Aviation Administration is warning travelers to avoid turning on or charging Samsung Galaxy Note 7 phones while flying because of concerns about the devices catching fire.

Airlines, Industry and Labor 

The International Air Transport Association reported 5% increase in demand a for air cargo in July on a year-over-year basis. "July was a positive month for air freight," said Alexandre de Juniac, director general and CEO of IATA.  

The financial health of US airlines has greatly improved over the past 15 years, writes Aaron Karp. He cites the $12 billion in profit posted by US airlines in the first half of the year. Karp notes that improved profitability is changing the industry globally, enabling carriers to buy new planes and enhance customer service. 

Boeing has completed deliveries of some 478 commercial aircraft through August. Airlines on the delivery list include Southwest, Alaska Airlines, China Eastern Airlines, United and Turkish Airlines. 

The future of the AN-124 aircraft is in serious doubt after Ukrainian manufacturer Antonov said it would not work with Russian companies after January 1 2017, and could halt international AN-124 operations.

Sunday, September 11th marks the fifteenth anniversary of the day that our world was shaken. Just as generations before us were asked, “Where were you when?,” so will each of us by successive generations.  

Each of us is known for who we are and what we do. On that day when thousands lost their lives to an unspeakable horror, we also remember and honor those who ran to the disaster to help those escaping. 

Included in those men and women who answered the call were fellow Teamsters. On that day, that began so simply, they did what union members always do; they stood in support of others.  

As we pause to remember the lives lost and the changes in our lives and the world, let us not forget to offer a special thanks and a prayer for our brothers and sisters who answered the call.