Belgian Pilots’ Union Challenges FedEx’s European Operations

When FedEx took over TNT in 2016, TNT Airways was not part of the deal. Part of the current Open Skies Agreements between the US and the EU is a protection clause stipulating that a US company cannot control a majority share in a European airline, and vice-versa, as for example is the case for DHL in the US.

So, TNT Airways had to be bought by a European company. That was found in ASL, a Belgian-Irish group owned for 51% by the Antwerp-based ship-owning group CMB. That operation resulted in ASL Belgium, which has FedEx as its largest client

7th freedom or not?
The first stage of the said Open Skies agreements , agreed on 30 April 2007, granted US companies the right to fly from any EU airport to the US and vice-versa. The same goes for EU carriers flying EU-US routes. Article 2 of the said agreement guarantees 3rd, 4th and 5th freedom for all US and EU carriers.

Article 3 was, however, the tricky one, as it granted 7th freedom to EU cargo carriers, but not the other way round. The Annex 1 section 3 goes even further than the traf-fic rights and forbids the organization of an ‘all-cargo’ service by the US cargo oper-ator in Europe.

Then came stage 2, agreed on 25 March 2010.This stipulated the extension of the 7th freedom rights to US full freight operators in Europe, on condition (sine qua non)  that it could only be implemented when the protection clause on ownership (see paragraph 2 above) would be abrogated.

Protection still in force
To date, this is not the case, the protection clauses are still in force. That means that FedEx and UPS are not allowed to operate flights to or from EU airports unless the flight has a US origin or destination.

“So FedEx’s plans to introduce flights form Liege Airport to other destinations in Europe, are therefore a violation of the Open Skies agreement, explains Jan Roels. Himself an ASLB-pilot, he speaks on behalf of the Belgian Cockpit Association (BeCA), representing the interests of the pilots.

“We have the impression that concern about regional interests and employment, which are of the utmost importance in Wallonia, have led to extensive concessions in this respect”, he adds.

FedEx is apparently not the only airline deviating on this legislation. “A (US) UPS flight taking a package form Helsinki to Madrid via Cologne is also violating the terms of the Open Skies agreement.”

Ethiopian too
Another example is Ethiopian Cargo (ETH), which a few years ago swopped Liege for Brussels, then Brussels for Maastricht and again Maastricht for Brussels and Liege. The extended airline services agreement between Belgium and Ethiopia grants 28 weekly frequencies in 5th freedom.

ETH uses these to fly from Belgium to Hong Kong, Shanghai and Dubai. The Ethiopian delegation requested 7th freedom traffic rights from Belgian airports to Africa and the US. Officially, the Belgian delegation answered that it was not in a position to accept such request.

Officially only cargo loaded in Addis Ababa (ADD) flying via BRU to these "third country destinations is allowed under the 5Th freedom clause. Cargo taken on board in BRU must be considered as 7th freedom.

To comply with the 5th freedom definition, ETH is not allowed to empty their aircraft in Belgium before continuing elsewhere in the world. Otherwise, these flights must be considered as 7th freedom which has not been granted to ETH. Having direct flights from Addis Ababa (ADD) to some of these destinations, BeCA has strong suspicions that ETH does not comply with this restriction and violates the agree-ment.

Social dumping to Irish subsidiary
Apart from its subcontracting operations on behalf of FedEx, ASL Belgium has also launched scheduled flights of its own. ”Mind you, this is a godsend”, says Jan. “It has prevented, over the considerable number of pilots that recently left the company, a non-determined number of additional lay-offs.” But even there, FedEx seems to have its own schemes, says Jan. “We have been flying LGG-JFK for a long time. Now FedEx is planning to fly the same route (or similar NAT-route)  with its own equipment.”

“We (and our government) should be careful and even reluctant when considering granting traffic rights to non EU carriers, often these requests are being presented as "New routes", suggesting unexplored markets, rises in Freight volumes and more jobs and prosperity for the concerned region.”

Quite often, the "more jobs" story turns out to be far too optimistic, and ends up in a fraction of what was initially projected. Compared to the numbers of local jobs getting lost at the BE operator that has been operating the same routes until then, the comparison becomes surrealistic, as BeCA observed.

Moreover, BeCA is not too happy about the fact that the latest aircraft acquisitions made by ASL, have been registered in Ireland. This might lead to the transfer of some pilots to ASL Ireland, which is, according to ASL Airlines Belgium Pilots, a blatant example of social dumping.

FedEx confirms commitment
FedEx Express/TNT says that it remains committed to ASL Airlines Belgium as a strategic service provider to operate a substantial part of the FedEx Express/TNT intra-European air network. “We have a multiyear contractual arrangement with ASL Airlines in the integrated European FedEx/TNT network going forward.”

“In April, we linked the Liege Hub into FedEx Express’ vast global air network with a new intercontinental Liège - Memphis flight. This important milestone not only confirms the FedEx commitment to maintain the TNT hub at Liege, but also creates growth opportunities for our customers, our employees and the employees of our valued service providers like ASL.”
    
Marcel Schoeters in Brussels