ABX Air Declares DHL in Fault of Agreement

[Batfish]

If they move charters to CHI then they have to pay 100% of the overhead. How is that better than DHL paying some of the overhead costs for ABX?

Unless I misread it, DHL is only paying the overhead on DHL flying not the charter stuff. They don't pay the overhead on that regardless. So if ABX wants to grow they need to do it outside their current company. Someone correct me if I read it wrong.

batfish

 

[abxaviator]

Yes, that is wrong. As long as revenues from no-DHL sources do not exceed 10%, DHL was picking up the tab.

 

[shooter]

Listen to what Dr. Zumwinkel has to say starting about 17 minutes in.


http://download.world-television.com/dpwn/20071108/dp_ak_qanda_081107.mp3

The Q&A that struck me the hardest was from John Allan at the end of the press conference (not the investors' conference if you are wanting to listen).

QQ- I have a question on the US. John Allan you said that you are looking very hard at what you can do in the US. You have a relatively broad foundation there. Are there any considerations possibly to stop doing certain business there? Domestic Air, Domestic Ground maybe? Are there maybe some things you want to discontinue? Regarding under performing businesses, you said that you bought two small express companies in Holland and Belgium and they were competitors. Are there maybe other sales of under performing businesses planned in other parts of the group? Another question on transparency for investors follows.

John Allan- As far as the US is concerned, of course we have some highly successful businesses in the United States. The Logistics business in the US are market leaders with great performance. So the US in not all (pause) a problem. We have been very open and I think realistic with you today in saying that we are working very hard to work out the best way forward for our US Express Business. It is important to us. Um, but you know we are not going to make predictions and give guidance that we are not capable of meeting. As far as the options that we would consider, in order to address that, I think you know there are no sacred cows in our business. Um, ahh, we are prepared to look at you know all sorts of different options. The challenge really is what is best for the business and what is best for our share holders. And we will take whatever time period is necessary to make sort of calm deliberate judgments about that. But with the emphasis being that can we re-start the rather encouraging recovery we saw over a period of about 9 months from the autumn of last year to the early summer of this year. As far as the rest of the group is concerned you know we regularly review our portfolio to ensure that we don’t hold businesses that may be more valuable outside. Earlier this year we sold a business from the logistics division (name inaudible), a business which was really a recycling business. We determined that we did not contribute any particular value to that business but that it would be more attractive and valuable outside the group. Therefore we sold it. And this is not something that happens in a dramatic way. We just regularly review our portfolio and it may be that there will be some smaller businesses that we ultimately conclude that should not be part of our group. Answer to regional EBIT and transparency follows.

 

[Batfish]

Yes, that is wrong. As long as revenues from no-DHL sources do not exceed 10%, DHL was picking up the tab.

WOW! Thanks for the correction, it clears up the confusion. batfish

 

[Bitter]

hey shooter, what struck you the hardest, from what John Allan said?

Call me dumb, all I got, was, change is in the wind, and no one is invulnerable!

Who is the sacred cow?

Any speculation on what will be announced in January?

 

[shooter]

hey shooter, what struck you the hardest, from what John Allan said?

Call me dumb, all I got, was, change is in the wind, and no one is invulnerable!

Who is the sacred cow?

Any speculation on what will be announced in January?

oh wow, I don't want to read too much into this. But when you look at the 2Q reports, they had a boost in stock prices due to the rumor that UPS was looking at a "partnership" of sorts with DHL. And when they start asking questions about selling off portions of the US market like the "Domestic Air" or ground, it makes me nervous. They said the Domestic ground was growing at about like 15% I think they said. And International from the US market is growing strong as well. But the Domestic Air........not so good. Would they outsource US air? who knows, but I don't trust them. They don't even pay their bills to contractors.

 

[thestable1]

Do you think ABX is going to wait until Jan to get new hires up and running? Don't bother saying it . . . I know all of us that have applied should think very hard about coming over there right now. Ok that said what about that court case with the KIX domicile, when is that?

 

[shooter]

hey! whats for lunch? I'm outie..........

(thought I would lighten the mood in this thread!)

 

[LarryinTN]

If they add flying to one of the CHI carriers then they're paying 100% of the overhead costs. If they add charter flying to ABX then they're paying up to 100% of the overhead costs. It's either a wash (100% vs. 100%) or it's a slight advantage to ABX.

I think that they'll put new hires into class as soon as they get the background checks done. They have plenty of 767 and DC9 class seats open that could take new hires if they are available in time.

 

[xspud]

Do you think ABX is going to wait until Jan to get new hires up and running? Don't bother saying it . . . I know all of us that have applied should think very hard about coming over there right now. Ok that said what about that court case with the KIX domicile, when is that?

RE New hires: LJ's right, I agree they'll go ahead and bring people in as soon as the info is in. There's a DC9 class scheduled for Dec 10, I think there's another 767 class in Dec, also. A new hire would only go to the 767 if they were going to KIX, people have standing bids in for 767FO ILN. I wouldn't expect any other classes until January.

RE KIX: There's a court hearing Nov 26-27.