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UPDATE 1-Pilots strike at cargo airline serving Amazon, DHL as holidays near

(Adds aviation expert comment, details of Amazon air expansion)

By Nick Carey

CHICAGO Nov 22 Pilots at ABX Air, an express cargo airline that serves online retailer Amazon.com Inc and DHL Express, went on strike on Tuesday, a critical time for retailers with the holiday shopping season about to kick into high gear.

Some 250 pilots, who are represented by the Teamsters union, went on strike in the early morning, affecting around 75 flights, mostly for Amazon and DHL, a unit of Deutsche Post AG .

Pilots went on strike because ABX, owned by Air Transport Services Group Inc, has violated its contract by asking them to work emergency hours over the last two years because of a staffing shortage, then failed to grant them compensatory time off or allow pilots to take earned vacations, the union said.

"Our pilots are striking so that we can have the status quo of our contract restored, and we would like that to be in the next minute so we can return to serving our customers," said Tim Jewell, a pilot and secretary treasurer of Teamsters Local 1224, which represents ABX pilots. "But if the company chooses not to do that our members are prepared to continue striking."

Air Transport Services Group said in a statement that ABX was taking multiple steps to tackle an "illegal work stoppage" including seeking a court order to get pilots back to work.

"We expect the court will uphold our position that the actions taken by the union to refuse work assignments is not legal, and the issues involved constitute a minor dispute to be resolved via arbitration under terms of our current labor agreements," ABX Air President John Starkovich said in a statement.

The strike comes just ahead of Cyber Monday, which is the biggest day of the year for internet shopping and is expected to break records this year.

Amazon has contracts with the major U.S. package delivery companies United Parcel Service Inc and FedEx Corp , giving it alternatives to ABX.

In May, Amazon also entered into a long-term agreement with Atlas Air Worldwide Holdings Inc under which the company would provide cargo services to the online retailer using 20 Boeing Co 767-300 freighters.

"We work with a variety of carriers and are confident in our ability to serve customers," Amazon spokeswoman Kelly Cheeseman said.

DHL, however, said the strike had affected deliveries of goods into the United States.

"Due to a work stoppage affecting our airline partners, inbound deliveries to portions of the Americas will be delayed today," the company said in a statement. "We are continuing to monitor the situation."

Matt Barton, an aviation industry economist with FlightPath Economics, said he expects the strike will be short, so will only cause a "relatively minor shortage" for Amazon.

But he said the long-term problem is a nationwide shortage of pilots, as older pilots retire and too few step up to replace them, which portends more strikes in the coming years.

"Call it a canary in the coal mine or a shot across the bow, but this is happening now," Barton said. "We are going to see pilot wages rise and problems like this for the next 10 to 15 years." (Additional reporting by Nandita Bose in Chicago and Ankit Ajmera in Bengaluru; Editing by Leslie Adler and Lisa Shumaker)

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