As Amazon Turns a Blind Eye to Growing Operational Risks, Veteran Pilots to Run Mobile Billboard Near Company’s Headquarters Exposing the Truth Behind Prime Air’s Challenges
SEATTLE, Aug. 30, 2017 /PRNewswire-USNewswire/ — Today Teamsters Local 1224 pilots who fly for Amazon’s new air delivery operation will begin running a mobile billboard warning CEO Jeff Bezos, investors and customers about intensifying operational problems at their airlines that spell trouble for Amazon’s logistics ambitions. In recent months, the e-commerce giant and its logistics partners have tried to downplay growing operational risks surrounding Prime Air while refusing to acknowledge the staffing, attrition and recruitment issues ensnaring Amazon’s air cargo contractors. Local 1224 pilots say Amazon isn’t being upfront about mounting concerns for Prime Air’s success and that stakeholders deserve to know the truth.
“We want Prime Air to succeed. That’s why it’s our responsibility to expose the ticking time bomb behind the marketing hype and let customers and investors know what’s really going on,” Griffith said. “Our airlines are hemorrhaging pilots at a record rate, and with customers counting on us to deliver, Amazon can’t afford to ignore the substandard pay and conditions that continue to undermine its operations. The busiest time of the year is fast approaching, and Amazon should urge its airlines to work with pilots on addressing the staffing crisis and getting Prime Air back on track.”The billboard will be traveling regularly around Amazon’s headquarters in Seattle and will direct viewers to a website with information about the issues at the pilots’ carriers that threaten Prime Air, particularly as the logistics industry is already preparing for peak holiday delivery season.
The pilots fly for airlines owned by Atlas Air Worldwide Holdings (AAWW) and Air Transport Services Group (ATSG), which are contracted to operate 40 planes for Amazon Prime Air by 2018. Full implementation of the first phase of contracting is delayed, in part because some of the companies have struggled to get many of the planes off the ground due to extreme and rapidly increasing staffing shortages. At both AAWW and ATSG, staffing, attrition and recruitment issues have been fueled by a nationwide pilot shortage, as well as years-long delays in union contract negotiations and substandard pay.
Despite these risks and growing operational uncertainty at the contracted cargo carriers, Amazon and its logistics partners have continued to push the Prime Air venture forward without confronting issues or making improvements. Atlas Air is rumored to be pursuing financing for six additional Prime Air planes despite its trouble staffing existing assets. Amazon’s public response to the pilot staffing crisis has amounted to an out-of-touch promotional video about its delivery capabilities.
With rotating messages reading “No Prime Air Without Pilots,” “Don’t Ground Prime Air” and “Prime(d) for Disaster,” the mobile billboard will direct viewers to CanAmazonDeliver.com, an informational website that details the intensifying operational and staffing issues at Prime Air carriers. The site also includes tools for customers to ask Amazon executives to make sure its contracted pilots have a fair contract so they can strengthen their ability to deliver for Amazon’s customers.
Amazon has signaled an increased investment in creating and growing its logistics arm. The e-retailer broke out revenues for its logistics operations for the first time in the first quarter of 2017, and earlier this year, the company announced that it will construct a $1.5 billion hub at Cincinnati/Northern Kentucky Airport (CVG) and will partner with German shipping giant Deutsche Post DHL to leverage the shipper’s existing resources at CVG. Amazon has also inked numerous deals to lease freighter aircraft to build out its air cargo fleet and is rumored to be in discussions to purchase as many as 400 new Boeing 767s. The company has also secured warrants to purchase substantial equity in AAWW and ATSG, driving speculation among some analysts that the tech giant may consider acquiring its cargo contractors in the near future.
At the same time, growing issues bubbling beneath the surface at Amazon’s cargo contractors and across the logistics industry threaten to derail the success of Prime Air. Carriers of all types are facing a nationwide pilot shortage that could leave airlines scrambling to replace tens of thousands of pilots expected to retire in the coming years.
Simultaneously, extensive delays in union contract negotiations and years of substandard pay continue to fuel problems at Prime Air’s contractors, including staffing, attrition and recruitment issues at AAWW. The staffing crisis has strained Atlas’ flight operations, leading to significant delays that force the company to reduce pilot rest time to dangerously low levels. The pilots warn that these challenges will only continue to intensify as the company braces for the fourth quarter, when customer demand and operational pressures are expected to surge. In a recent survey of Atlas pilots, 65 percent of surveyed pilots said that they were planning to apply at another airline in the coming year. Many are looking to FedEx and UPS, major delivery companies that offer competitive benefit and pay packages, and ones that Amazon is relying on less and less for its Prime Air business.
ABX Air, a subsidiary of ASTG and a Prime Air carrier, also faces a critical need to attract new pilots as Amazon’s logistics ambitions grow. Absent a stable pipeline of new pilots, the airline could see increased staffing issues extending over the course of the next decade and throughout the duration of its contracted flying for Amazon, as 20 percent of its current pilots will reach the mandatory retirement age within the next five years. That number is expected to surge to more than 50 percent in the next 10 years.
In August, pilots protested outside of Amazon’s headquarters to alert CEO Jeff Bezos and other executives about the issues simmering beneath the surface at their airlines. In July, pilots raised these concerns directly with customers in the lead up to Prime Day, Amazon’s biggest single-day sales event, with a nationwide advertising campaign. The ads linked to CanAmazonDeliver.com.
In May, pilots protested at the company’s annual shareholder meeting to alert investors of what Quartz described as “bad news in the cutthroat world of e-commerce.” These challenges were also outlined in a letter sent to the Amazon Board of Directors from the International Brotherhood of Teamsters’ General Secretary-Treasurer Ken Hall, which called on the company to work with pilots and the union on solutions to these problems.