Air Freight Carriers Have Good and Bad News as Cargo Services Increase but Union Gets Restless

RUSSIA – LUXEMBOURG – JAPAN – SOUTH KOREA – News from two cargo airlines this week and a mix it would seem of good and bad. Whilst AirBridgeCargo Airlines (ABC), Russia’s largest international cargo airline and a part of Volga-Dnepr Group, has announced it is increasing its Boeing 747 freighter flights linking Tokyo and Seoul with Moscow, competitors Luxembourg based, freight only Cargolux seem to have labour problems brewing once again.

First the good news, Starting from 1 October, ABC will increase its scheduled flights from Moscow to Tokyo’s Narita Airport and on the onward connection to Seoul, Korea, to three services a week. ABC’s flights to Tokyo and Seoul’s Incheon International Airport will operate every Wednesday, Thursday and Saturday. ABC says the extra frequencies reflect the company’s traffic growth in the Asia Pacific region and extends its commitment to the Japanese and Korean air cargo and manufacturing markets, which it began in 2007 and 2010 respectively. Volga Dnepr Group’s Vice President for Japan and South Korea, Anton Khodakovskiy, commented:

“Asia Pacific as a whole is vital for Volga-Dnepr Group with three of the world’s top five economies located in the region. We see fundamental changes in APAC, with the constantly growing importance and influence of Asian economies as well as increasing intra-Asian trade and fast-growing consumer demand.”

Having achieved a creditable ‘Delivered as Promised’ performance of up to 90% between the start of the year to August 31, above the industry average, the new services should help ABC’s customers to meet increased consumer demand, especially in the automotive sector. Over the last eight months, ABC’s tonnage from Japan and Korea has grown by 40%. The highest level of growth has been seen on the company’s routes to Europe and Russia, where volumes rose 20% and 46% respectively over this period. Overall, ABC transported 6,810 tonnes of cargo from Japan and Korea in the eight months to the end of August.

Things at Cargolux unfortunately do not appear to be so settled. The all freight carrier has been warned by the Luxembourg Confederation of Christian Trade Unions (LCGB) that it has advised company pilots to only work to the terms agreed last year under the Collective Work Agreement (CWA) following fierce disagreements which we wrote about at the time.

LCGB says that in the past Cargolux pilots volunteered to fly during their off days or extended their duties beyond the times foreseen in the Collective Work Agreement on a regular basis. Over the years the union claims that this has allowed the company to react to market demands in a way no other airfreight carrier could have during challenging times of high demand. The communication to the airline is a thinly veiled threat saying ‘this retrieval of good will could likely create network disruptions resulting in considerable delays.’

The LCGB is upset at the fact the company has seconded a second aircraft to its Italian subsidiary, Cargolux Italia, giving reason to the concerns previously raised by LCGB that Cargolux management is going down a path of outsourcing and social dumping. Cargolux Italia will immediately operate flights to and from Luxembourg, flights that were previously flown by Cargolux (Luxembourg) which is seen as a threat to the home country’s jobs.

Now the LCGB has presented Cargolux management with an agreement in the form of a Memorandum of Understanding (MoU) which outlines a basic commitment to jobs in Luxembourg, this covers both pilot employment and all other department functions currently undertaken in Luxembourg. The MoU insists that any expansion of company activities will comply with the terms of the CWA giving local staff confidence that the company is not seeking to sidestep the terms it has agreed by outsourcing jobs and services abroad.

It seems if a written commitment is not received from the Cargolux management the union says it intends to use the pilots as a tool to persuade the company that all areas, and it makes special mention of maintenance, are protected to this ‘mindset of outsourcing and social dumping’.