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.