Dhl Buy's 49% Of Astar

[AV8OR]

I don't take it personally Boxes, but just a question.....

I have heard the whole "....but we're Cat II" thing multiple times as a reason while ABX is preferable to Astar. OK, but let's say you're DHL and ultimatley you've got to fund a change in service for your customers, which do think is ultimately more costly......getting us certified CAT II, or replacing the entire C container fleet. Also, which would be quicker?

Unless we are somehow incapable of flying/upgrading our aircraft to Cat II, (which we are doing right now, training on it is happeneing as we type), then I'm not sure I see how ABX thinks that the rise or fall of DHL in the USA will be based on ABX's having Cat II certification before AStar.

 

[abxaviator]

While the C-container fleet does need to be replaced, aged 72's are NOT the answer, those will be in need of replacement sooner rather than later, as well. The ONLY ac in eother fleet ready for the long-term are the 767F's.

As others have stated, this is likely not over, don't change that dial!

 

[fodc8]

I think you missed the most important part of the latest deal. DHL extended the current ACMI with Astar for 12 years. As I have many friends at ABX, I believe Hete has decided to take the ABX Air business elseware. It is no secret that ABX is unhappy with their current ACMI agreement and that Hete has tried to improve it with no success. I believe Hete will try to rebuild the ABX legacy somewhere else. ABX Air will deposit assets into the holding company, and those assets will be purchased by Astar. The ABX Air Certificate will service other customers other than DHL, ie ANA. I wish no ABX pilot ill will but Astar currently hauls 50% plus of the frieght each night. They publish these numbers everyday on the morning lift sheet. ABX has 3 years left on its current ACMI which is the correct amount of time to replace the Cabin door 767's with cargo door aircraft for Astar. Stage 4 in Europe is quickly approching and DHL will need somewhere to send their fleet of 44 757's that currently do not meet stage 4. Everything being said as One ABX pilot told me " A new beginning somewhere else may be good for us in the long run". Astar has always been DHL from it's call sign to it's previous name. The only thing thats changed is Astar is now back as DHL.

 

[AV8OR]

Wow. That's a little bolder statement than I'd have been willing to make. Guess we'll see.

 

[abxaviator]

I was thinking the same thing.

 

[HeavyjetDC8]

I think that fodc8 probably has it right. C containers in general now have a limited shelf life and are on the way out regardless of the CatII ability of the equipment which carries them. The desire of ABX Air to provide service in Japan (and possibly other places) for revenues much greater than those generated from the DHL ACMI agreement is obviously apparent. The spin off and sell via a holding company is certainly a reasonable scenario.

 

[Whistlin' Dan]

I think you missed the most important part of the latest deal. DHL extended the current ACMI with Astar for 12 years. As I have many friends at ABX, I believe Hete has decided to take the ABX Air business elseware. It is no secret that ABX is unhappy with their current ACMI agreement and that Hete has tried to improve it with no success. I believe Hete will try to rebuild the ABX legacy somewhere else. ABX Air will deposit assets into the holding company, and those assets will be purchased by Astar. The ABX Air Certificate will service other customers other than DHL, ie ANA. I wish no ABX pilot ill will but Astar currently hauls 50% plus of the frieght each night. They publish these numbers everyday on the morning lift sheet. ABX has 3 years left on its current ACMI which is the correct amount of time to replace the Cabin door 767's with cargo door aircraft for Astar. Stage 4 in Europe is quickly approching and DHL will need somewhere to send their fleet of 44 757's that currently do not meet stage 4. Everything being said as One ABX pilot told me " A new beginning somewhere else may be good for us in the long run". Astar has always been DHL from it's call sign to it's previous name. The only thing thats changed is Astar is now back as DHL.

I think you're bringing up some interesting points. Nobody ever got rich working for DHL, but a few have gone broke or almost-broke trying to. I believe the ACMI restricts Astar's ability to do outside work, if not by actual edict, then by limitations on how far the crews and other resources can be stretched. Losing DHL's business is not the worst thing that could happen to ABX. Trying to undercut the lowest bidder for their business IS.

 

[ABXbooger]

I wish no ABX pilot ill will but Astar currently hauls 50% plus of the freight each night

How is that possible? We fly almost 30 767's each night and then the 50+ DC-9's and then the odd DC-8...then many of the 767's turn around and head back for the day sort. I think those numbers are off.

I also recall reading the press release that Astar and DHL put put saying they hauled about 1/3 of the freight.

Is the name really going to be changed back to DHL? I thought I had read that this is a minority buy-in and everything else will stay the same.

I wonder what the DPWN shareholders are going to think when the learn that they just bought a company that charges them 6% more than the other, and gets less of a return...

 

[ABXbooger]

My mistake wasn't the press release, just DHL saying it...


Plantation-based express-delivery company DHL on Tuesday announced it has acquired a minority stake in Miami's Astar Air Cargo for an undisclosed amount. DHL acquired a 49 percent equity interest and a 24.9 percent voting interest in Astar -- just under federal thresholds that restrict foreign ownership of U.S. airlines. DHL is an arm of Germany's Deutsche Post. Jonathan Baker, a DHL spokesman, said the transaction was reviewed by the U.S. Department of Transportation. The deal comes four years after the airline, then known as DHL Airways, was sold by DHL and a private investor to a group led by former Burger King boss John Dasburg for $57 million.

''The business environment has changed significantly since 2003,'' Baker said in explaining why DHL reacquired a stake in Astar. He didn't offer any specifics. DHL has recently targeted aviation investments to support its operations in the United States. It recently invested in New York's Polar Air Cargo, which offers delivery services between the United States and Asia. DHL relies on Astar to handle about a third of its U.S. express domestic air services, Baker said. The transaction ''signals DHL's confidence in the capabilities of Astar,'' said Dasburg, Astar's chairman, president and CEO.

At the time of the 2003 sale of the cargo firm to Dasburg's group, both United Parcel Service and FedEx challenged the deal on the grounds that airline was controlled by Deutsche Post. But a Department of Transportation judge disagreed with the two package-delivery giants. Astar would have had to shut down had the judge ruled the other way, according to a company lawyer at the time. Federal law prohibits foreign ownership of any U.S. airline to 49 percent and voting interest to 25 percent. The law dates back to 1926.

 

[BoxesRus]

I don't take it personally Boxes, but just a question.....

I have heard the whole "....but we're Cat II" thing multiple times as a reason while ABX is preferable to Astar. OK, but let's say you're DHL and ultimatley you've got to fund a change in service for your customers, which do think is ultimately more costly......getting us certified CAT II, or replacing the entire C container fleet. Also, which would be quicker?

Well, my question, rhetorical as it may have been, had more to do with a common sense explanation for not choosing a carrier with better capabilities and performance. The fact that it doesn't make sense is what has me worried.
But, okay, lets bat this CAT II/III & C Container thing around. CAT II/III capabilities are absolutely essential in the Overnight Express Industry. You know, "when it absolutely, positively has to be there overnight....." And, of course, there are going to be the odd nights when even CAT II/III aircraft aren't going to get in to some markets. But neither will UPS or FedEx. And since DHL professes to be in the American Overnight Express business, they are going to have to compete. Overnight customers are fickle. You don't make it in one day and UPS does....you lose the customer to UPS, even if it costs more.
As for the C Container. Okay, they're small. So is most of the product shipped Overnight Express. Just because ABX is the only one doing it doesn't make it wrong for the business. There's a reason for why ABX has used them successfully for over 25 years; the customers love them. The legacy customers like Dell, IBM, Apple and others love them because they can load them themselves, push them off the loading dock at the last minute and still make the flight. For years IBM has threatened to go to someone else if we took C containers out of their distribution cities.

 

[shooter]

I think you missed the most important part of the latest deal. DHL extended the current ACMI with Astar for 12 years. As I have many friends at ABX, I believe Hete has decided to take the ABX Air business elseware. It is no secret that ABX is unhappy with their current ACMI agreement and that Hete has tried to improve it with no success. I believe Hete will try to rebuild the ABX legacy somewhere else. ABX Air will deposit assets into the holding company, and those assets will be purchased by Astar. The ABX Air Certificate will service other customers other than DHL, ie ANA. I wish no ABX pilot ill will but Astar currently hauls 50% plus of the frieght each night. They publish these numbers everyday on the morning lift sheet. ABX has 3 years left on its current ACMI which is the correct amount of time to replace the Cabin door 767's with cargo door aircraft for Astar. Stage 4 in Europe is quickly approching and DHL will need somewhere to send their fleet of 44 757's that currently do not meet stage 4. Everything being said as One ABX pilot told me " A new beginning somewhere else may be good for us in the long run". Astar has always been DHL from it's call sign to it's previous name. The only thing thats changed is Astar is now back as DHL.

I don't know, don't you think they will just mod. to stage 4? While it would be a nice fit for the US market, they have a need for them in the EU. Which brings up another head scratcher for me. I had read that Polar was looking at getting a 767 type on their cert. to diversify their fleet from just 747's. Does Astar have something like this being looked at? I ask because I still wonder who will get the new 767-300ER's DHL ordered. Not to bash Astar, but your fleet are dino's and something really needs to be done about that. It may be that you (Astar) buys ABX, but who knows how this will all play out. I just know I'm done when it's done. No more aviation after ABX for me, baby.

 

[erwaz]

ASTAR has alwas been DHL. Its just a shell game DHL plays very well. DHL is also a private company. DHL likes private companys not public. I personaly feel that there is nothing in the ABX fleet that is worth two nickels except for the 10 767 with cargo doors for DHL. Having said that, I do hope that ABX will be apart of the whole DHL Plan. I have friends at ABX and I do not want to see them on the street. I would much rather work with them as one company called DHL.

 

[shooter]

ASTAR has alwas been DHL. Its just a shell game DHL plays very well. DHL is also a private company. DHL likes private companys not public. I personaly feel that there is nothing in the ABX fleet that is worth two nickels except for the 10 767 with cargo doors for DHL. Having said that, I do hope that ABX will be apart of the whole DHL Plan. I have friends at ABX and I do not want to see them on the street. I would much rather work with them as one company called DHL.

wow, you should really get to know your company structure. DHL is NOT a private company. Its owned by a very publicly traded company Deutsche Post World Net. The only difference is now the investors of Deutsche Post now have to wonder where their money goes when it flows into Astar. To be transparent with the cash (you know to show the investors you are not stealing their money by not having to report to the public) Astar will have to become public. You know how you do that? Buy or be bought by ABX or take your company public. Which do you think is more likely to happen?

 

[erwaz]

DHL is not a public company. Yes DP is public but DHL is seperate and private. Astar will not become public unless JD deceids to sell. And yes the sale of Astar to Abx is one posibility although a long shot at best. What ever happens I do hope we all come out on top because we all want our jobs at the end of the day. Lets not get mad at each other. We are just all along for the ride brother.

 

[shooter]

DHL is not a public company. Yes DP is public but DHL is seperate and private. Astar will not become public unless JD deceids to sell. And yes the sale of Astar to Abx is one posibility although a long shot at best. What ever happens I do hope we all come out on top because we all want our jobs at the end of the day. Lets not get mad at each other. We are just all along for the ride brother.

agreed, I hope we all come out on top. I am not mad and hope I do not come across as mad. But DHL is a publicly traded company through DPWN. All its financial statments and operating expenses are reported through them. Polar is a publicly traded company and soon, Astar will be too. They have to be public or the investors would fume about non-disclosure of the finances.

 

[erwaz]

I am just a bumb pilot so you may be right!

 

[shooter]

I am just a bumb pilot so you may be right!

you don't have to take my word for it. here is the publications link from DPWN to view the annual report/Q1/outlook etc.

http://investors.dpwn.de/en/investoren/publikationen/index.html

 

[shooter]

F.Y.I.

I know Daz is being all hush hush about the cost of the 49%, but it will come out in the 2nd quarter report or the annual at the latest. As they reported the Polar purchase.

 

[AV8OR]

Well, my question, rhetorical as it may have been, had more to do with a common sense explanation for not choosing a carrier with better capabilities and performance. The fact that it doesn't make sense is what has me worried.
But, okay, lets bat this CAT II/III & C Container thing around. CAT II/III capabilities are absolutely essential in the Overnight Express Industry. You know, "when it absolutely, positively has to be there overnight....." And, of course, there are going to be the odd nights when even CAT II/III aircraft aren't going to get in to some markets. But neither will UPS or FedEx. And since DHL professes to be in the American Overnight Express business, they are going to have to compete. Overnight customers are fickle. You don't make it in one day and UPS does....you lose the customer to UPS, even if it costs more.
As for the C Container. Okay, they're small. So is most of the product shipped Overnight Express. Just because ABX is the only one doing it doesn't make it wrong for the business. There's a reason for why ABX has used them successfully for over 25 years; the customers love them. The legacy customers like Dell, IBM, Apple and others love them because they can load them themselves, push them off the loading dock at the last minute and still make the flight. For years IBM has threatened to go to someone else if we took C containers out of their distribution cities.

OK, now I understand where you're coming from. At first I didn't think you answered my question, "which would be more expensive", but toward the end I realized in a round about way what you are saying that since the CATII DC-9 C container system is fundamentally superior to the A container sysytem that DHL seems to be favoring in the long run, it is crazy for them to invest in AStar. I got it. Thanks for the reply.

 

[fodc8]

The entire World is A container. The only airline using C containers is ABX Air. I know you guys have been with this system for so long it's hard to come to the realization that this system is on the way out. DHL strategic plans include an all A container fleet. New cities being served by Astar are being completely converted to process A containers only. Ultimately the C container issue will make or break any deal ABX gets, not Cat 2. When your 767's begin getting cargo doors I will be the first to say your back in the game. Rumor of you getting them and actual 767's with doors showing up are two different things. Didn't Hete take 3 of ABX Air's 767F to Japan? I wonder how DHL took that?