ABX buys Pace

[B737Dvr]

what a big puff of smoke!

Yeap, I just got done listening to the concall myself and I was amazed that Joe was asked directly if there was an acquisition. I find it curious why he hesitated, but eventually said no flat out. So there it is.
It was said that the biggest constraint on ABX's procurement of non-dhl based business was the lack of aircraft availability. From what I heard on the call, of the 12 DAL 767's bought; 2 were brought online in jun of 05', 2 will be brought online this year(1 for the full Q4 and the other for half of it, for you ABX guys), and then Joe was asked his guess on the other 8.....to which he replied that he hoped to get 6 in 2007 and the last 2 in 2008.
The other big question is the avialability of hanger space for additional business. In reference to the flat panel mod question Joe got, her basically said there was no pipeline for it, just a big market potential for the 75/76's out there already and it's commonality to the 737NG family. This could also be constrained by the lack of hanger space in which to do the mods, so that could also be holding back any possible pipelines.
IAI, according to the call is the only modifier for the 767's and Boeing expect to have their facility up and running in Q2 of 2007, which explains why Joe hopes to have 6 done next year.
Well as far as the Pace deal.....he said that with their new board member, they have worked on development of new non-dhl business this summer and will continue to do so in the fall.

from the above flat out rejection of an acquisition and the delay in getting aircraft done....i don't really expect any developments on the pace deal in the near future, the only thing i see pushing that up to this year, would be the announcement of a DOD, CRAF type deal, where abx will use the 767 in the pax configuration, and then utilize the pace pax certificate to get this going quickly......so in the meanwhile we all wait........

any thoughts anyone?

 

[abxaviator]

Just goes to show, a rumor is just that until it isn't, eh?

 

[goastar]

"Don't forget who we all work for, this is just where the darts landed today.[/quote]

In todays news HRL,LBB,OKC,postponed indefinitely. Enjoy your continued 36hr layover.

 

[erichartmann]

Astar does not do 36 hr. layovers because we have a domestic certificate in addition to flag and supplemental certificates. When ABX buys Pace, ABX will get a domestic certificate and your 36 hr. layovers will be gone.

First, ABX could have a domestic certificate now if management wanted it. They prefer to opearate under the supplemental certificate for what I suspect are economic reasons. I was told the record keeping provisions of a domestic certificate are far more onerous than those of the supplemental.

Second, it's not so easy as just aquiring the certificate.

Third, 36 hour layovers are enshrined in our contract. Management is required to use them if a suitable follow on trip exists.

Last, of course, the aquisition of Pace has apparently not taken place (yet).

I think it suggestive that Hete hesitated before saying no.

 

[B737Dvr]

First, ABX could have a domestic certificate now if management wanted it. They prefer to opearate under the supplemental certificate for what I suspect are economic reasons. I was told the record keeping provisions of a domestic certificate are far more onerous than those of the supplemental.

Second, it's not so easy as just aquiring the certificate.

Third, 36 hour layovers are enshrined in our contract. Management is required to use them if a suitable follow on trip exists.

Last, of course, the aquisition of Pace has apparently not taken place (yet).

I think it suggestive that Hete hesitated before saying no.

Pace also continues to operate under supplemental rules, although they are approved for Domestic ops...for the same economical reasons.

The fact that Joe hesitated could be due to many different reasons, but ultimately, I don't think anyone is affected unless some sort of MAJOR announcement is made concerning any new contracts (ie. DOD, CRAF etc).

The only affect any new biz like flat panel mods, new mx with more hanger space etc etc..... will be to the bottom line and for mx people.

In my opinion, the only thing that will affect crews on either side, would be some sort of MAJOR announcement (like a new DOD, CRAF contract) going into effect asap...thereby utlizing pace's pax certificates....(thats when things would get interesting)....but unless something like that happens, any new freight biz would have to wait till the new 767 come off the line, which puts this all out of the near future pipeline........

If this acquisition is just a signature away, i say again, unless some sort of MAJOR pax flying announcement is made, then people on either side will remain unaffected and this would just be a boost to the bottom line's earning capability......

any thoughts?

 

[inplaneview]

In regards to Pace and other rumors...I'd bet something significant is in the works. Reference Joe's specific comment on merger and acquisition when he introduced Fritz Reed in the press release:
"Fritz Reed has a broad background in corporate legal and financial management and consulting, with particular experience in strategic and business development, including mergers and acquisitions. I am looking forward to his contributions as we expand and diversify our base of business at ABX Air."

 

[erwaz]

Don't be surprised if Astar And ABX merge.

 

[Narco-leftseat]

Don't be surprised if Astar And ABX merge.

I won't be surprised at all, DHL loves to have multiple carriers, but let's face it, The competition in the US consists of two of the best run, best managed, most efficient companies in the World....you know who they are.

Of course DHL loves the leverage they posses to replace an airline with rising labor rates. (Morelike refusal of concessions) I think the costs of staffing two loading systems, two maintenence departments, two scheduling departments, two planning departments, two dispatch departments, two security departments, two training departments....you get my drift.....Has cost them greatly. Although DHL doesn't pay directly for these departments, it is reflected in the cost that is passed on to them.

Once again folks, DHL has been financially spanked and put to bed by trying to outsmart/outplay the best folks in the industry who operate one cohesive, yet fully represented carrier a little bit down the river from ILN....