Say Agreement Would Axe 10,000 Jobs, Slash Competition

The head of the world's largest pilots union called a DHL/United Parcel Service proposal to transfer all DHL flying from ASTAR and ABX to competitor UPS "One Bad Deal" for workers, air express competition, and the US economy in testimony before the US House Judiciary Committee Tuesday.

"The proposal is bad for pilots, bad for ASTAR, bad for competition in the US air express industry, bad for southwestern Ohio, bad for American workers, and bad for the US economy," said Capt. John Prater, president of the Air Line Pilots Association, Int'l (ALPA), after his testimony. "Congress must meticulously scrutinize this proposal and ensure that it is thoroughly reviewed by the antitrust authorities before it goes forward."

As ANN reported, in May DHL parent company Deutsche Post announced it was negotiating to transfer all North American flying currently performed by ASTAR and ABX to UPS. The German company asserted the move was necessary, if DHL had any chance at all to be profitable in the US market... where it faces near-overwhelming competition from cargo giants FedEx and UPS.

ALPA claims that although it held a 49 percent stake in ASTAR and had two representatives on the airline's board of directors, Deutsche Post did not inform ASTAR or its employees that it had been negotiating with UPS for six months. At the same time that Deutsche Post was cutting the deal with UPS, ASTAR was negotiating a collective bargaining agreement with ALPA.

"The agreement stems from once-secret discussions between UPS and DHL, which were deliberately hidden from affected companies, employees, and public officials," continued Prater. "In ALPA's case, the secrecy was clearly intended to deprive ASTAR pilots of the chance to protect themselves, in both bargaining and litigation."

ALPA says the central issue in the most recent contract negotiations between ASTAR and ALPA was job security. While DHL was making demands with respect to the job security provisions of any agreement between ASTAR and ALPA and requiring settlement of the ALPA-DHL litigation, DHL and its parent, Deutsche Post, were negotiating to hand over all ASTAR flying to UPS.

Prater was joined at the hearing by dozens of the 525 pilots ALPA represents at ASTAR Air Cargo, who have flown cargo for DHL for more than two decades. "This backdoor deal would spell financial disaster for thousands of families across Ohio who are already reeling from hard economic times," said Capt. Pat Walsh, chairman of ALPA's ASTAR pilot group. "We need Congress to act quickly to put the brakes on this proposal."

"It is hard to see how the proposed DHL/UPS alliance would benefit US consumers," added Prater. "We urge the Judiciary Committee to ask the parties not to implement this deal until and unless it has been reviewed by the Department of Justice or the Federal Trade Commission."

FMI: www.alpa.org,  www.dhl.com, www.ups.com