Pilots who fly for Amazon Air earn 33% less than their colleagues at UPS and FedEx for flying the exact same planes (AMZN)

March 21, 2019 at 13:57 PM EDT

Ted S. Warren/AP

More than a dozen current and former pilots who fly for Amazon Air told Business Insider about a culture of overwork and underpay at their employers, which contract air services to Amazon.
ABX, ATI, and Atlas pilots, who fly your Amazon Prime packages, all make considerably less than pilots at other cargo airlines, including FedEx and UPS.
"Amazon is doing everything possible to keep their shipping expense low because it's ballooning," one analyst told Business Insider.

The pilots who deliver your Amazon Prime packages are paid considerably less than their peers at other air cargo carriers.

Business Insider interviewed 13 current and former pilots who worked with third-party airfreight companies that fly Amazon Air-branded planes. The pilots worked for subsidiaries of Air Transport Services Group (ATSG) and Atlas Air Worldwide Holdings. All are based in the US and fly both domestically and internationally.

These airline companies provide Amazon with leasing, staffing, maintenance, and insurance. The pilot groups who work with Amazon are ABX Air, Air Transport International (ATI), and Atlas Air. ABX and ATI are owned by ATSG, and Atlas Air Worldwide Holdings owns Atlas Air.

These pilots are all unionized. ABX and Atlas pilots are in the Teamsters Local Union 1224, while ATI pilots are in Air Line Pilots Association International (ALPA).

Amazon and Atlas Air did not respond to repeated requests for comment from Business Insider.

In a statement regarding other issues at ATSG, a spokesperson told Business Insider regarding pay and union negotiations, "Contract negotiations continue to be conducted under the auspices of the National Mediation Board, and we look forward to their satisfactory conclusion."

Even a first-year captain at FedEx earns more than a captain who flies for Amazon Air who has been with the company for decades

Boeing 767 captains with the maximum years of company tenure at ATSG and Atlas earn up to $246 an hour, according to their labor contracts and information posted on salary report website Airline Pilot Central.

But serving as a captain on the same plane with the maximum years of company tenure is much more lucrative at other cargo airlines.

Pilots with the maximum years of experience earn $313 an hour at FedEx and $309 at UPS. (Maximum experience at UPS and FedEx is 15 years, while it's capped at 12 years at Atlas, ABX, and ATI.)

Even smaller cargo airlines, like Kalitta Air, pay better than ATSG or Atlas. Kalitta 767 captains earn $273. No other airlines flying 767s had salary information publicly available.

So, the average Amazon Air captain makes about 33% less than the average FedEx and UPS captain for flying the same plane once reaching the maximum years of experience.

The split in pay is so remarkable that even a first-year captain at FedEx earns more than a captain at Amazon Air who has been with the company for decades ($258 an hour at FedEx).

For those who are starting as first officers or co-pilots, there's a similar discrepancy in pay.

The average first officer with maximum years of experience at an Amazon Air contractor earns $148 an hour — nearly $100 less than their peers at FedEx and UPS.

ABX and Atlas pilots have not received a raise in a decade

Pilots are almost universally unionized. Even pilots at FedEx, whose labor force is not completely unionized, are in a union. Meanwhile, an ongoing pilot shortage has forced airlines across the spectrum to raise wages.

"In the last two to three years, we've seen really significant salary increases," Bob Seidel, the chief executive of Alerion Aviation, previously told Business Insider. "People are desperate to keep their airplanes staffed."

But ABX Air and Atlas Air pilots have not received a raise in nearly a decade.

The union contracts at ABX and Atlas have been amenable since 2015, meaning they are still in effect but available to be negotiated. Negotiations, which are reaching their fifth year, have been challenging, according to each pilot Business Insider spoke with. Pilot union negotiations are often lengthy — FedEx's most recent pilot labor negotiations lasted two years, while UPS' went on for 3 1/2 years.

However, the ABX and Atlas contracts now in place were negotiated during the financial crisis, and pilots said the contract was "concessionary" in many ways. They allowed their pensions and healthcare matches to freeze, gave up vacation days, and took a pay cut. Pilots said that was to save the airlines, which were financially struggling. Atlas Air had declared bankruptcy several years prior.

ATI pilots, who also fly for Amazon Air, won a new labor contract in 2018. The new union contract had average wage increases of 41%-51% for captains and 45%-55% for first officers. Still, pilot pay is lower than other cargo airlines — ATI captains with decades of company experience earn 27% than captains with the same experience flying the same jet at FedEx.

To keep Amazon as a customer, the pressure is high on Atlas and ATSG to keep labor costs minimal. (Amazon recently hit the headlines for ditching another third-party logistics company.)

"Amazon is doing everything possible to keep their shipping expense low because it's ballooning," Marc Wulfraat, the president and founder of supply-chain consultancy MWPVL International, told Business Insider.

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