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T r a n s p o r t a t i o n Air & Expedited

UPS Pilots OK Deal

Contract with IRA boosts pay, benefits, improves work rules for pilots; FedEx inks deal with its pilots


BX Air, the U.S. cargo airline trying to build business beyond DHL Express customers, won a renewed contract from the U.S. Postal Service to operate a big mail terminal in Indianapolis. ABX managed the sort facility since 2004, but said the new fouryear contract expands its role through October 2010 and should generate $17.7 million over that term. It also is the third USPS award ABX has won this year, along with a July contract to manage a sort center in Dallas and a similar one last month for a center in Memphis, Tenn. Each contract also allows for two, two-year extensions if USPS chooses. The new business comes after a second quarter in which ABX's revenue declined more than $47 million, or about 13 percent, mostly because of declining business with D H L Joe Hete, ABX Air president and CEO, said his company has "a proven, tested business model that we intend to follow in each USPS operation."

he Independent Pilots Association put the finishing touches on its five-year UPS contract, getting the U.S. air freight industry past its biggest labor hurdles in a year full of often testy negotiations. IPA said Aug. 30 the 2,652 pilots who cast ballots voted 56.5 percent in favor of the accord.

lines, said the pilot agreement "meets our longstanding goals of rewarding our people while maintaining the ability to remain competitive." The pilot approval at UPS came as rival FedEx Express struck a four-year contract deal with its 4,700 crew members in the Air Line Pilots Association. ALPA was moving quickly to get its ratification process under way. Neither deal came easily. FedEx pilots turned up the heat in recent months in their "informational picketing" as well as rhetoric to protest how long the talks were taking. Finally, the union said their federal mediator told both sides to get it done quickly or face a sharp change in the process. But it was the UPS talks that repeatedly threatened to come apart. In December, IPA formally asked their mediator to release the two sides so the union could trigger a strike countdown against the company. Instead, the mediator called a long recess. When talks resumed in the spring, a battle erupted in the union's top ranks over an offer their negotiators were preparing, and the leaders aired issues to union membership before coming back

It was not a perfect contract... but "we did pretty well."

IPA President Tom Nicholson said the contract boosts pay and benefits, improves work rules and "guarantees our pilots the international tlying in the UPS system." It was not a perfect contract, he said, but "we did pretty well." For UPS, it clears away one labor hurdle as the country's largest transportation company prepares for still-higher stakes in its upcoming negotiations with its Teamster drivers. Bob Lekites, vice president of UPS Air-

Worid Air Loses $7.5 Million

The company that owns freighter and passenger airline World Airways lost $7.5 million in the second quarter as its military business suffered, down from a net gain of $5.5 million in the 2005 period, hut projected a strong third quarter. World Air Holdings also owns North American Airways. Both airline units get most of their revenue from military passenger flights, and handle passenger other specialized passenger business. In addition, its higgest airiine, World Airways, operates seven freighters - five MO-iis and two DC-IOs - for cargo customers including Taiwan's EVA Air and Air Canada. The company said with World Airways military flights in penalty status for much of the quarter it fell in on-time performance, total revenue was up just $4.8 million from the 2005 quarter and it suffered an operating loss. But the penalty has been lifted, and World Air said third-quarter revenue should he nearly $235 million and put operating income as high as $10 million. World Air also said it was buying hack as much as 9 percent of its stock over the next month, and would soon apply to have its shares again listed on a major exchange after coming current in financial reports.

to quickly wrap things up. When secret balloting on the tentative contract was under way, rumors spread that dissidents might be able to defeat it. Beyond the UPS and FedEx deals that could most concern shippers, the year has been full of labor talks in air cargo. World Airways grounded its seven freighters in February before a weeklong strike and lockout gave way to a contract deal. Gemini Air Cargo pilots, negotiating whUe the company was in bankruptcy, first rejected a contract agreement and in August approved a second one by just 51 percent. Some other cargo carriers still have talks under way, including Evergreen International Airlines, McMinnville, Ore. Its pilots, organized as The Aviators Group, had been talking with the carrier for months before signing with ALPA recently to help with "economic and fmancial analysis and communications support" during the negotiations. BY JOHN D. BOYD

30 THAFFIC WORLD September 11.2006