Atlas Air inks 747 freighter contract with FedEx

Editor’s Note: This article originally appeared on FreightWaves.com.

Atlas Air said Wednesday it is operating two Boeing 747-400 freighters for FedEx Express full-time under a new long-term contract. The deal is in addition to the all-cargo carrier’s existing multi-year peak-season contract that provides FedEx with a minimum of five aircraft during the fourth quarter.

The Atlas lease, which includes crew and maintenance, went into effect Sept. 1. The aircraft will be used on routes between Asia, Europe and FedEx’s hub in Memphis, Tennessee, Robert Kirchner, the union chief for Atlas Air pilots, told FreightWaves last week.

FedEx is adding supplemental airlift to keep up with growing international e-commerce volumes in its express network. During its fiscal first quarter ended Aug. 31, FedEx’s international package revenue increased 25.6 percent to $1.3 billion year-over-year, although airfreight revenue fell from $75 million to $47 million because of extraordinary charter activity FedEx provided at the start of the COVID pandemic in 2020 to delivery personal protective equipment and other medical supplies.

Kirchner said the service has already experienced delays because of crew shortages at Atlas Air resulting from disaffected pilots leaving the company. Neither company has responded to queries about the new arrangement or specified it’s exact duration.

Atlas Air pilots have vented their displeasure with the company for not accommodating demands on compensation, scheduling, and working conditions during collective bargaining, culminating in a binding contract set through arbitration that union members have criticized. Under the new deal, pilot pay scales would increase an average of 30 percent, but workers say the increase is off a low base and that the contract fails in other regards.

“We are pleased to grow our long-term relationship with FedEx. This agreement reflects the continued strong demand for air freight capacity, particularly in the express and e-commerce markets,” said John Dietrich, Atlas Air Worldwide Holdings president and CEO, in a statement.