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Amazon deliveries could be headed for some turbulence in the new year. Pilots for US-based Air Transport International, a cargo airline that ferries Amazon packages from its fulfillment centers to airports nearer to its customers, voted to authorize a strike last month. During the three and a half years the union has been negotiating with ATI, wages in the industry have soared, and ATI’s pilots complain that their pay has fallen behind. Meanwhile, they say ATI is facing record attrition as pilots jump ship to better-paying carriers.
A strike could throw a wrench in Amazon’s logistics network. ATI, owned by holding company ATSG, operates half of the 80 US aircraft currently in service for Amazon, according to an estimate by Planespotters. But the pilots, who are represented by the Air Line Pilots Association union, can’t walk out until at least next year.
Federal law requires airline labor disputes to be mediated by the US government’s National Mediation Board, which will implement a 30-day cooling-off period if it determines the parties have reached an impasse and they refuse arbitration. If a resolution isn’t reached during that time, the pilots can walk off the job or the airline can lock them out. Some 98 percent of ATI’s 640 pilots participated in the vote and only one didn’t vote to authorize the strike.
Amazon outsources the operation of its air service, which it calls Amazon Air, to a small network of cargo airlines whose pilots fly Amazon-branded planes. In the US alone, they collectively operate more than 330 daily flights for Amazon between more than 50 airports, according to the logistics consultancy MWPVL International.
Most airlines that work with Amazon also devote a large share of their businesses to transporting cargo for other customers, including DHL and the US military. In recent years, ATI has gone all-in on the retailer, however. Amazon deliveries now comprise 94 percent of ATI’s flying hours, according to the pilots’ union, making the company and its workers dependent on the ecommerce giant.
ATI’s pilots’ union says that more than a third of the airline’s pilots have left so far this year, after 27 percent of them departed last year. The union says 42 percent of its pilots are currently on probation, meaning they’re in their first year of service. “We’re watching our carrier disintegrate,” says Mike Sterling, chair of the ATI pilots’ union.
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The pilots’ union says they have delivered a 98 percent on-time performance rate, but the rapid turnover and declining experience levels are threatening that. “This market is highly competitive, and ATSG is diminishing its ability to provide quality service to Amazon,” says Sterling. “We think this is a conversation that needs to be had between all three parties.” Amazon and ATI did not respond to requests for comment. During an earnings call in May, ATSG’s former CEO said that ATI’s service quality remained outstanding, but acknowledged that training replacements for departing pilots had raised costs for the airline.
When the pilots’ union negotiated a contract with the company in 2018, pilots’ pay, benefits, and schedules were competitive with similar airlines, says Josh Hoy, a captain who started at the airline seven years ago. He initially looked at the job as just a stepping stone but decided to stick around when ATI’s relationship with Amazon took off. “It was a really exciting time, being on the ground floor of that kind of growth,” he says. “I started to have the conversation with my wife and said, ‘I think this might be the place to stay.’”
However, “as time went on, we’ve fallen far behind,” Hoy says. ATI’s union says its pilots are paid less on an hourly basis than those at all of Amazon’s seven other carriers. “We operate under the same rules, in the same airspace, on the exact same routes. The airplanes cost the exact same to operate,” says Hoy. “Everything is exactly the same, except for our pay.”
No Fondness for Labor
Amazon generally goes to great lengths to avoid engaging with unions and to deter its employees or those who work for its contractors from joining them. The company spent the last year and a half unsuccessfully challenging the first and only union victory at a US Amazon warehouse. When employees of a delivery contractor in Southern California unionized earlier this year, Amazon refused to jointly bargain with the workers and terminated its agreement with the contractor. “Amazon has not demonstrated a real fondness for labor,” Sterling acknowledges. “I would love to change that narrative with them.”
The last and only time Amazon faced a strike by one of its air carriers was in 2016, during the early days of its air cargo operation, when 250 pilots for ABX Air walked off the job. A judge deemed the strike illegal, however, and ordered the pilots back to work the following day. Nonetheless, a former Amazon Air employee told WIRED last year that Amazon suspended its business with ABX for several weeks after the strike ended to demonstrate the relative power it held in the relationship, which soon soured.
ATI’s pilots are taking a less antagonistic tone in hopes of bringing Amazon to the negotiating table. “What we don’t want to do is affect our customers,” says Sterling. “We’ve done a lot to protect our obsession with Amazon.” However, he says the intransigence of ATSG’s management has left the pilots with no choice but to call a strike.
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“This side of Amazon’s network is the most vulnerable to labor strikes,” says Marc Wulfraat, president of logistics consultancy MWPVL. If drivers or warehouse workers strike, the company can shift the flow of products and packages to one of its many nearby warehouses, but airports are fewer in number and farther apart.
Amazon could compensate for a walkout at ATI by shifting volume to other air carriers under the Amazon Air umbrella, but only if they have the capacity to handle the influx at all of the airports. It could also transport some of its packages by truck instead, which it did during the brief 2016 strike. However, this could result in slower shipping times and reduced service, says Wulfraat, which flies in the face of Amazon’s mantra of customer obsession.
Pilots also have the advantage of being generally in a strong position across the airline industry. “It’s still a very, very hot job market” for pilots, says Geoff Murray, a partner who works on aerospace at management consultancy Oliver Wyman. Plummeting demand for passenger pilots during the pandemic sent many into early retirement, worsening an existing pilot shortage that got more acute as the industry bounced back. Wages have soared. Oliver Wyman estimates that captains’ pay at the US mainline carriers, such as Delta and UPS, has increased 46 percent since 2020, while regional carriers have increased pay by 86 percent.
Pilot Drew Patterson came to ATI in 2021, attracted by the work-life balance the airline offered, but as the carrier lost pilots, he has seen his workload creep up and his schedule become more unpredictable. With fewer crews to operate the same number of flights, “everybody else's schedule gets compressed,” he says. “Sometimes you can be away from home for a long time.”
Long-term, he thinks Amazon’s continued growth should be a good thing for ATI and its employees, so he’s been willing to stick it out. But he’s not so sure all of his colleagues will feel the same about current conditions at the company.
“All of this has a real house-of-cards feeling to it,” says Sterling. “We just can’t sustain what we’re doing.”
