MIAMI – Today begins the final showdown in a five-year struggle between Atlas Air (5Y) pilots and the company’s management for a new collective bargaining agreement.
An arbitrator will listen to contract offers from pilots and management for the next two weeks before imposing a contract that will determine the airline’s long-term future.
The pilots will argue for a contract that is more in line with industry expectations. Atlas, meanwhile, may offer a contract that holds pilot pay and benefits well below those of other cargo carriers.
According to industry insiders, whatever the arbitrator determines, the final decision may have a long-term negative effect on the airline and its pilots.
“Atlas Air’s leadership team has squandered the past few years of growth, created discord with a key employee group, and has now surrendered its future to a third-party arbitrator,” said Robert Kirchner, head of the International Aviation Professionals (IAP), Teamsters Local 2750, the union that represents the pilots.
“This is a clear abdication of leadership,” he continued. “We may now know the reason they provided no insights about the company’s future during the recent quarterly reporting to shareholders. They are no longer making decisions on key issues. Every stakeholder should be concerned that management is wiping their hands of responsibility.”
Atlas Air Not Negotiating?
Atlas Air executives are likely to say again that they don’t have the resources to properly compensate their pilots and that they would go bankrupt if they have to pay salaries and benefits equivalent to the rest of the industry, according to people at the negotiating table. At the same time, these same Atlas executives have profited handsomely from the sale of Atlas stock.
“For the past five years, the company has delayed and gone to court to avoid negotiating seriously,” said Kirchner. “Atlas managers have refused to schedule more than four days per month for contract negotiations and then they have only showed up for a few hours and were disinterested and unprepared to negotiate. All the while we have consistently offered to negotiate around the clock, any time and any place.”
“Atlas leadership has built up such frustration and anger in their most important employee group that morale is at an all-time low and attrition is extremely high, which costs Atlas millions in recruitment, training and missed flight opportunities. If we keep going in the same direction, Atlas will remain the training academy for UPS, FedEx, and the rest of the airline industry,” said Kirchner.
He goes on to say that no matter the outcome of arbitration, Atlas Air management has created a no-win situation for investors and the future of the airline. “If the arbitration goes in the company’s favor, workforce discontent will soar. You can’t grow an airline with high turnover and low morale.”
More to the Story
But it seems that times are not so bad at Atlas. According to CNBC, in February, the airline forecast an increase in first-quarter revenue as the airline, which works closely with Amazon, reaped profits from higher demand during the pandemic.
Atlas flew to a profit of US$360m in 2020 from a net loss the year earlier of US$293m. Revenue in 2020 rose 17% to US$3.2bn. Also, Amazon increased its stake in the company in January, Atlas said.
Atlas Air shares were trading the morning of March 18 at US$60, up from about US$19.60 a year ago.
While it continues to expect strong demand, 5Y says that pandemic-related expenses, such as premium pilot pay, will weigh on its bottom line in the first quarter.
Featured image: Atlas Air N497MC Boeing 747-400F(SCD). Photo: John Leivaditis /Airways