May 1, 2018

Management Grievances Update

Dear Atlas & Southern Air Crewmembers,

I would like to update you on recent developments regarding negotiations and next steps with respect to the Atlas and Southern management grievances.

We have continued negotiations under the Framework Agreement. From our perspective, these sessions have proven constructive. In earlier negotiations we reached tentative agreements (TAs) on 14 Articles.

We are now at a stage in negotiations where the Articles are more complex with more significant operational and economic considerations. As a result, progress has slowed as these more difficult topics are being discussed.

We did recently reach an additional TA – Article 23 – on Furlough and Recall. Currently, the focus is on Scheduling and Training. While some progress is being made, there are still significant differences between the Company and the Union.

Ultimately this comes down to economics and the total cost of the entire joint collective bargaining agreement (JCBA). The Union has yet to put forward an economic ask for retirement, compensation and benefits that would provide clarity on a path to a full agreement. The goal is to negotiate as many, if not all articles, as we did in the last session of negotiations, now more than eight years ago.

As you know, the federal court in the Southern District of New York recently ordered the Union to arbitrate the Company’s pending management grievances. These grievances were filed at both Atlas and Southern on April 14, 2016 and on January 24, 2017, respectively. Subsequent to the Court’s ruling, the Company promptly sought to select arbitrators for each grievance to move the process forward. The Company also asked the Union to agree to consolidate the two grievances into one arbitration for both Atlas and Southern to expedite the process. The Union, however, chooses to have an arbitration for Atlas and a separate hearing for Southern, which will inevitably take more time.

As there will be two separate arbitrations, two separate arbitrators will hear each case. Arbitrator George Nicolau will hear the Atlas grievance in New York City on September 24-26. The Southern grievance will be arbitrated before Arbitrator Richard Bloch on October 16-20. Both arbitrators offered several dates this summer for the respective hearings, for which the Company was available; the Union, however, is not available for either arbitration until the fall. Both gentlemen are veteran arbitrators with many years of airline industry experience.

As a reminder, these grievances are to determine the application of Section 1.F in the Atlas CBA and 1.B.3 of the Southern CBA for joint negotiations due to the Atlas-Southern merger. The Company’s position is that the contractual language which the parties have all agreed to clearly applies, while Union leadership contends otherwise.

We will continue to provide updates as developments occur.

Thank you as always for all that you do for our customers.

John W. Dietrich
President & Chief Operating Officer
Atlas Air, Inc.