Amendment Linked to Airborne Deal Draws Opposition

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The White House and two congressional committee heads objected Tuesday to an amendment to an appropriations bill last week that could block the proposed sale of Airborne's ground delivery operation to DHL Worldwide Express for $1.05 billion.


The amendment stated that any company receiving 50 percent or more of its operating revenue from a foreign entity cannot carry military cargo. Seattle-based Airborne said the amendment aims to block the sale.


DHL Worldwide Express is a unit of Deutsche Post, Europe's largest mail company. 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 United Parcel Service have 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.


Mitchell Daniels Jr., director of the White House Office of Management and Budget, said in a letter to lawmakers considering the change that the plan would harm the Pentagon's immediate need for flexibility in contracting air cargo services for airlift operations to and from the Middle East.


Senate commerce committee chairman John McCain, R-AZ, and its aviation subcommittee chairman, Trent Lott, R-MS, wrote a letter to the appropriations committees objecting to the DHL provision as well.


Insiders said the amendment may not survive a House-Senate conference committee because House of Representatives negotiators object to any amendment that doesn't relate to the war in Iraq, homeland security or aid for passenger airlines.


Congressional leaders promised President Bush they would pass the spending bill by Friday.


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