(UPDATED: Lufthansa announced Sept. 12 that it finalized a contract with pilots that will carry through the end of June 2023. And dnata announced Sept. 8, 2022, that had reached agreement in principal on a new collective bargaining agreement with employees, forestalling a potential strike.)
Airport services provider dnata is making contingency plans for a potential strike by staff at facilities in Australia that could disrupt cargo shipments as dnata grapples with COVID-related backlogs at its cargo terminal in Melbourne.
The news comes as German flag carrier Lufthansa avoided another strike by pilots by tentatively agreeing on a new contract with union representatives.
The Australian office of dnata, previously known as Dubai National Air Travel Agency and part of the Emirates Group, informed customers Monday it is preparing for a potential 24-hour labor action on Sept. 12 that likely will affect cargo and baggage at airports in Sydney and Brisbane.
The ground handling agent has secured replacement workers in Melbourne, Adelaide and Perth and doesn’t anticipate any slowdowns in those locations in the event of a strike, management said in a message to the Freight Trade Alliance, which represents logistics service providers and international shippers.
“Despite our best efforts to build a contingency team in Sydney and Brisbane, we do anticipate some disruption to operations should an agreement with our employees not be achieved in the Fair Work Commission on Wednesday Sept. 7,” dnata said.
The Fair Work Commission is Australia’s tribunal that helps to resolve work-related issues.
In a separate update, dnata said that it is deploying additional staff and management teams to assist the cargo terminal in Melbourne, where a COVID outbreak has reduced staffing levels and resulted in shipment backlogs.
The company said three new recruits began work in Melbourne on Monday.
Most of the backlog involves shipments with large numbers of small pieces rather than containerized shipments. The situation is expected to ease Wednesday when dnata implements a ban on handling passenger aircraft with cargo loaded in the cabin. The tactic, which gained popularity during the pandemic as a way to utilize more space in aircraft temporarily repurposed for dedicated cargo service, is much more labor-intensive because individual boxes must be hand-carried through narrow passenger doors and stacked on seats or the floor.
Import cargo delays have been reduced to four days, from five to nine days, with perishable, medical and other specialty products receiving priority service, said dnata.
Lufthansa gets labor relief
Meanwhile, Reuters and other news outlets reported that Lufthansa and pilots’ union Vereinigung Cockpit (VC) shook hands on a labor deal, leading the union to call off a strike planned for Wednesday and Thursday. Lufthansa Cargo pilots were not expected to show up for work from Wednesday through Friday.
Lufthansa Cargo operates 12 Boeing 777 freighters along with four more in Aerologic, a joint venture with DHL. CityLine, Lufthansa’s intra-Europe passenger subsidiary, flies one Airbus A321 converted freighter for Lufthansa Cargo.
Pilots went on strike last Friday for one day, forcing Lufthansa to cancel nearly 1,000 flights and slowing delivery of cargo.
Lufthansa (DXE: LHA) and VC said they were still negotiating final details after the airline sweetened its offer. VC was seeking a pay raise of 5.5% retroactive to July 1, with automatic inflation adjustments for two years.. After a Munich labor court ruled on Friday, VC adjusted its demands to seek an annual pay increase of 8.2% starting in 2023, in addition to the 5.5% increase this year, according to Lufthansa.
The airline said VC’s original proposal would increase labor costs by about 40% over two years. Instead, it offered a one-time bonus of $900, plus a 5% increase for senior pilots and an 18% increase for new hires.
Labor uncertainty is the latest headwind faced by the air cargo industry this year. Businesses that ship cargo by air, including on passenger aircraft, have been impacted by a summer of travel woes that have led airlines to cancel thousands of flights and some airports to cap daily passenger counts. Typhoons, heat waves, COVID lockdowns and geopolitical tensions in Southeast Asia have also hindered airline operations.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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