Pilots at ABX Air, which flies express cargo routes for Amazon Air and DHL Express, have ratified a new six-year contract.
Parent company Air Transport Services Group (NASDQ: ATSG) announced Wednesday that the airline division of the International Brotherhood of Teamsters had finalized the collective bargaining agreement.
Labor peace “represents a crucial step as we pursue future growth opportunities with our airline,” said ABX Air President David Soaper in a statement.
Negotiations for the amended contract began in early 2014. Under the Railway Labor Act, labor contracts for air crews do not expire but can be updated.
A year ago, the Airline Professionals Association (Teamsters Local 1224) publicly complained that management was delaying and obstructing negotiations. It said the company’s unwillingness to invest in its crews had hurt morale and made it difficult to attract skilled pilots.
ABX, which operates converted Boeing 767 freighters, has more than 230 pilots. Pilots at ATSG’s other contract carrier, Air Transport International, are represented by the Air Line Pilots Association.
“Throughout nearly seven years of negotiations the focus was on securing industry-competitive wages, benefits and quality of life for the pilot group while still providing ABX Air a cost structure from which to grow the business portfolio,” said Airline Professionals Association President Tim Jewell in a statement provided to FreightWaves. “The successful resolution of this contract should provide our pilots, ABX Air and our customers the stability each desires and allow ABX Air to expand in our segment of the industry.”
The Teamsters, through two separate local units, also represent pilots at Atlas Air (NASDQ: AAWW). The sides have been embroiled in testy contract talks for several years.
The union has created issues for Amazon (NASDQ: AMZN) at both airlines, limiting Amazon’s ability to freely adjust its network. Four years ago it orchestrated a one-day walkout at ABX over pay for extra flying during the peak season, forcing dozens of flights to be canceled and raising concerns at Amazon about reliability. Amazon, frustrated by the labor divisions at Atlas, transferred flying responsibility for two leased freighters from Atlas to Air Transport International in September 2019. All of Amazon’s growth with ATSG in recent years has been at Air Transport International.
“The fact that ATSG has had this other pilot group that had a contract that was current and were not creating issues for Amazon has been a significant strategic advantage for ATSG and has allowed them to take business from Atlas,” said an industry analyst who closely follows ATSG but didn’t want to be named commenting outside of formal channels.
Terms of the new ABX agreement were not disclosed.