Atlas completes Southern Air purchase as strike threat looms

The deal announced in January involving Atlas Air Worldwide Holdings’ (AAWW) acquisition of Southern Air Holdings has been finalized. With the US$110 million purchase, Atlas has expanded its fleet to 79 aircraft and strengthened its business relationship with DHL Express, which has raised concerns within Atlas’ pilots union.

U.S.-based Southern Air Holdings, which was a privately held, is the parent company of two airlines: Southern Air and Florida West International Airways. Southern Air currently operates five 777Fs and five 737-400Fs exclusively for DHL Express on long-term CMI contracts. Until recently, Florida West operated up to three 767-300Fs in Latin American service from its base in Miami, but it no longer has any aircraft of its own and operates three 767-300Fs on an interchange basis with LAN Cargo.

Meanwhile, APA Teamsters Local 1224, a union representing the AAWW’s American pilots, has expressed concern over the growing influence that German-held Deutsche Post DHL will have over their operations and began voting among its members last week to decide whether to strike over the issue.

According to the union, the pilots are mostly objecting to the possibility that Southern Air and Florida West, along with AAWW’s other carriers, Atlas Air and Polar Air, will come under increasing foreign control, which may adversely affect their contracts. Under the deal with Southern, the expected revenue related to DHL will rise to 27 percent, placing the two American companies further under the control of a foreign entity. DHL already provides AAWW with financial and operational assistance and holds a 49 percent equity stake in Polar Air.

The Teamsters have also said AAWW and its subsidiary carriers are trying to force pilots at both AAWW and Southern into an “amalgamated” contract that will “have a devastating impact by suppressing wages and lowering quality-of-life issues for pilots at the two companies.” Since the beginning of the year, pilots for Atlas and Polar have been working to amend their collective bargaining agreement (CBA), saying their their current contract is “grossly below industry standard,” the union said. A Teamsters-sponsored comparison study found that pilots flying for AAWW planes for DHL are paid “considerably less and work far more” than pilots who fly for U.S.-based integrators, such as UPS or FedEx.

A vote for a strike, which began April 1, is a lengthy process that may take several weeks to reach a conclusion, the union added.