Airborne Blasts Airline Ownership Bill

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Airborne Inc. criticized United Parcel Service and FedEx this week, charging that the two companies were trying unfairly to block the proposed sale of Airborne's ground delivery operation to DHL Worldwide Express for $1.05 billion.

Seattle-based Airborne said a Senate appropriations bill introduced last week aims to block the sale. An amendment states that any company receiving 50 percent or more of its operating revenue from a foreign entity cannot carry military cargo. DHL Worldwide Express is a unit of Deutsche Post, Europe's largest mail company.

"We believe this amendment is clearly influenced by UPS and FedEx, who are attempting to prevent competition by redefining the decades-old citizenship requirements for ownership of air carriers," Airborne said in a statement. "The structure of the proposed DHL and Airborne transaction is transparent and clearly meets all current regulatory requirements. ABX Air will be a totally independent company and will be 100 percent owned by public shareholders."

The statement continued: "Given UPS and FedEx's 79 percent stranglehold on the U.S. express delivery market, their opposition to this transaction is entirely predictable, and it is no surprise that they would attempt to protect their duopoly in any way they can. Their attempts to delay our transaction will limit opportunities for American workers and deny choice to American consumers."

If DHL Worldwide's acquisition of Airborne's ground delivery operation goes through, Airborne's air business would become an independent public company called ABX Air Inc. The deal is to close this summer.

FedEx and UPS also filed separate proposals with the U.S. Department of Transportation charging that the acquisition may violate U.S. limits on foreign control of domestic airlines. They charge that DHL Worldwide effectively would control Airborne's air operations despite the plans to spin it off into a publicly traded company. U.S. law restricts foreign ownership of U.S. airlines to no more than 25 percent.


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