ASTAR Pilots Face Challenges Head On

By Ron Lovas, Senior Communications Specialist
Air Line Pilot, May 2005, p.19

The pilots of ASTAR Air Cargo have faced numerous challenges in the past few years. The pilot group has endured ownership changes at the carrier, as well as competitor challenges regarding the citizenship of the airline. More recently, an administrative law judge ruled that ALPA was guilty of unfair labor practices under the National Labor Relations Act when the union tried to enforce its contractual agreements with the entities of the DHL network.

At issue in the contract dispute is whether DHL violated the side letter that required, with some exceptions, that ASTAR pilots fly all of the DHL air freight in the United States.

ALPA appealed the judge’s decision, which the National Labor Relations Board is now reviewing.
“Job security is of the utmost importance to the pilots of ASTAR, and all our members are frustrated with the status of our scope dispute,” says the ASTAR Master Executive Council chairman, Capt. Jim Bonney. “As we watch the legal process unfold and await the NLRB decision, we are relying heavily on the resources of ALPA and the Association’s leaders to help us defend our contract and protect our jobs.”

The situation confronting the ASTAR pilots is the product of a confusing series of restructurings and acquisitions that has produced a tangle of legal and representational challenges. 

To understand the circumstances that the pilot group now faces, a review of a little history is necessary.

What’s in a name?

For ASTAR Air Cargo’s flightcrew members, the airline’s name connotes a rich history of providing consumers with a quality delivery service. 

ASTAR Air Cargo began operations in 1982 as DHL Airways, carrying freight for DHL, the worldwide express shipping network. The airline was part of a single U.S. corporation that performed all of the operations associated with DHL’s business in the United States--both ground operations (picking up, sorting, loading, and delivering freight) and the air carriage of that freight. In early 2001, Deutsche Post acquired the DHL network, including DHL Worldwide Express, Inc., the U.S. holding company that owned DHL Airways. To comply with the U.S. requirement that U.S. air carriers be owned and controlled by U.S. citizens, the airline operations and the ground delivery operations were placed into separate corporations, and the airline became a cost-plus ACMI (aircraft, crew, maintenance, insurance) carrier for DHL.

In late 2001, UPS and FedEx management began an aggressive campaign to challenge the citizenship status of DHL Airways. In April 2003, a Department of Transportation administrative law judge held hearings on the subject of DHL Airway’s citizenship. While that hearing was under way, an investment group headed by former Northwest Airlines President John Dasburg bought DHL Airways and renamed it ASTAR Air Cargo. The judge concluded that, under the ownership of the Dasburg group, DHL Airways met the citizenship tests, and the DOT upheld that determination in May 2004. FedEx and UPS did not appeal the DOT decision.

In August 2003, while the DOT proceeding was pending, DHL acquired Airborne, Inc., a company engaged in the same type of package express business as DHL. As part of that transaction, Airborne’s airline subsidiary, ABX Air, Inc., was spun off to Airborne shareholders.

After the acquisition, DHL used ABX to continue to fly the freight of Airborne, now a DHL subsidiary. The ASTAR MEC asserted that this violated the scope clause in the collective bargaining agreement between ALPA and ASTAR and a side letter of agreement between ALPA and DHL. The agreement and the letter required, with certain exceptions, that ASTAR pilots fly all of the DHL air freight connected to the United States.

The ASTAR MEC filed a grievance asserting the pilots’ rights under the scope clause and the side letter. DHL then sued ALPA in federal court, asking for a determination that it was no longer bound by the collective bargaining agreement or the side letter. ALPA asked for expedited arbitration. 

While the court case was pending, ABX filed, with the National Labor Relations Board, a suit alleging an unfair labor practice, claiming that ALPA’s enforcement actions were unlawful under the National Labor Relations Act. The federal court then stayed its proceedings pending the NLRB decision on the unfair labor practices charge.

In December 2003, the NLRB’s general counsel issued a complaint against ALPA. A hearing was held in March 2004, and in July an NLRB law judge issued a decision finding that, by filing its grievance against DHL with the objective of forcing it to cease doing business with Airborne, ALPA had violated the “secondary boycott” provisions of the NLRA. The judge’s decision was based in part on the fundamentally incorrect notion that ALPA was seeking to have ASTAR pilots fly ABX airplanes.

ALPA appealed, and the NLRB is now reviewing that decision. ALPA contends that the Railway Labor Act and not the NLRA govern the Association’s actions in the case and that, even if the NLRA did cover them, the pilots’ efforts to enforce the scope clause are entirely legal under that law. As of press time, the NLRB had not ruled on ALPA’s appeal.

“ALPA recognizes the importance of this grievance to the ASTAR pilots and has committed every available resource to see this through to a satisfactory conclusion,” says ALPA’s president, Capt. Duane Woerth. “The job security issue has far-reaching implications for all ALPA pilots. ASTAR pilots have been denied their due process under the RLA by an argument that we believe to be completely devoid of legal merit, and another government agency has hijacked their grievance. ALPA is 100 percent committed to fighting this injustice.”

Negotiations under way

The proceedings before the NLRB and the courts will likely take many months, and quite possibly years. In the meantime, ALPA has begun Section 6 negotiations with ASTAR over modifications to the collective bargaining agreement.

The current agreement, which was reached in December 1998, was achieved using interest-based bargaining. The National Mediation Board has cited that agreement as a textbook example of how that process can work, and the pilots at that time described the agreement as a “quantum leap” from where the group started when they joined ALPA.

“It is too early to tell whether negotiations may provide a solution to our disputes over scope,” says Capt. Bonney. “For that to happen, DHL would also have to cooperate. But we hope that all parties will recognize that a negotiated solution may be preferable to endless litigation.

“Our relationship with ASTAR management, while cordial, is something we always strive to improve,” he says. “To Mr. Dasburg’s credit, he has placed some highly competent individuals in some key positions that relate to the line pilots’ working conditions. These individuals quite often display a willingness to work with us to solve problems, rather than serve as obstacles. Our last contract put us on par with our peers in the overnight express business on pay, schedule, and general quality-of-life issues. Our goal for this contract is to improve on this foundation.” 

The pilot group’s contract became amendable in December 2003. ALPA filed a Section 6 notice in April 2003, but negotiations were delayed because of the multiple sales and restructurings that affected DHL. The MEC negotiating team began direct bargaining with management in January 2005. The parties are once again using an interest-based bargaining approach to negotiations, and the bargaining atmosphere has been cordial and cooperative.

“December 2004 marked the first anniversary of the amendable date for the pilots’ contract at ASTAR Air Cargo,” says First Officer John Coomes, ASTAR MEC Negotiating Committee chairman. “The year encompassed a hectic period during which ownership of the airline changed and its citizenship was challenged. However, at the end of these distractions, management was prepared to enter negotiations. Management and the union attended interest-based bargaining training together, and this began the cooperative process of contract improvement.

“January 2005 brought about the onset of actual negotiations,” says F/O Coomes. “We incorporated an NMB facilitator in the beginning to ensure that we applied the principles of IBB as efficiently as possible. The progress to date has been very satisfying. In just over two months of negotiating, we have tentative agreements for eight sections. We fully expect the pace to slow as we get into the more complex issues, but for now, we are enjoying a collaborative environment at the table.”