DHL Airways Chairman Makes Ownership Bid

Share this article:
DHL Airways chairman John Dasburg leads a group of investors -- all U.S. citizens -- who plan to buy the company, DHL said yesterday.


The news comes as the Department of Transportation is investigating whether DHL Airways violates laws limiting how much a foreign entity can hold in a U.S.-based airline.


Currently, Germany's Deutsche Post World Net owns 25 percent of DHL Airways, the legal limit a foreign investor can own in a U.S. airline. William Robinson, a U.S. citizen, owns the other 75 percent.


DHL expects the purchase to be completed within three weeks. Terms were not revealed.


Reportedly, news of the sale to Dasburg's group was first disclosed at a pre-hearing conference before DOT chief administrative law judge Ronnie Yoder on April 29. Congress had ordered the DOT to investigate long-standing complaints from FedEx Corp. and United Parcel Service that Deutsche Post World Net effectively controls DHL Airways.


The judge sharply questioned DHL Airways attorneys about whether the company met the U.S. government's definition of a U.S.-owned company, according to reports, and put the burden of proof on DHL.


Yoder said he probably would ask the DOT to delay a Sept. 2 deadline it has imposed for a decision in the case.


Even if the ownership change goes through, FedEx and UPS likely will claim that DHL Airways remains under Deutsche Post World Net control. At the conference, DHL Airways acknowledged that about 90 percent of its revenue last year came from DHL Worldwide.


The outcome of the DOT investigation also could affect plans by Deutsche Post unit DHL Worldwide to buy Airborne Inc.'s ground delivery business for $1 billion. Airborne's air operation would become an independent public company called ABX Air Inc.


FedEx and UPS also have filed proposals with the DOT charging that the Airborne acquisition may violate U.S. limits on foreign control of domestic airlines.


Meanwhile, Airborne Inc. reported yesterday a net loss of $5.6 million in the first quarter compared with net income of $5.3 million in first-quarter 2002. Airborne said that operating costs were much higher for the quarter, which ended March 31, due to escalating fuel costs, extreme weather, pension and healthcare costs, and expenses associated with the announced merger with DHL.


Airborne's revenue totaled $825 million for the first quarter, up from $791 million last year. Domestic revenue rose 4.2 percent to $744 million from $714 million a year ago. International revenue increased 5.3 percent to $80 million. Total international volume decreased 2.1 percent in the quarter, though revenue per shipment rose 7.5 percent. The international segment recorded a loss of $1.7 million in the first quarter of 2003, the same as a year ago.


Total domestic shipment volumes at Airborne increased 3.5 percent from the first quarter of last year. Ground Delivery Service volumes averaged 220,000 shipments daily in the first quarter, exceeding management's target of 210,000 daily and up from the 92,000 shipments daily in the first quarter of last year. Air express shipments decreased 8 percent.


Share this article:

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in News

News Byte: Comcast Expanding Global Ad Delivery Through Partnership

News Byte: Comcast Expanding Global Ad Delivery Through ...

Through a partnership with Adstream , Comcast's AdDelivery Service expands its footprint across the globe.

40 Under 40 2014: Nominations Are Now Open!

40 Under 40 2014: Nominations Are Now Open!

It's time to nominate the 2014 crop of young marketing luminaries for Direct Marketing News's 40 Under 40 Awards. The deadline is Friday, June 6, 2014.

News Byte: MediaCrossing Partners with ASL Marketing on Youth Marketing Tool

News Byte: MediaCrossing Partners with ASL Marketing on ...

The digital media trading firm and marketing database company aim to help marketers target 13 to 34 year olds.