DHL plans to start reducing its reliance on a fleet of ABX aircraft in the third quarter.
Prior to a public announcement made Wednesday, DHL on Tuesday night informed ABX Air that it will reduce its U.S. air network, including aircraft operated by other carriers, beginning in July and continuing for 12 to 18 months.
"DHL informed us last night that, starting in the third quarter, it intends, as part of a series of cost-reduction programs, to remove from its U.S. air network 39 of the 55 DC-9 aircraft that ABX Air has dedicated to DHL," said Joe Hete, CEO of ABX parent company Air Transport Services Group. "In addition, DHL has notified us that it has commenced negotiations with UPS that could lead to the assumption by UPS of substantially all of the services that ABX Air currently provides to DHL."
Looking further ahead, Hete said his company would aggressively pursue a strategy of expanding business with other customers. ABX Air has been DHL's principal business partner in the United States since August 2003, when it became an independent publicly held company as its former parent, Airborne Express, was acquired by DHL. Hete said he expected to enforce the two commercial agreements that exist between DHL and ABX.
The Aircraft, Crew, Maintenance & Insurance agreement through August 2010 and a Hub Services agreement that runs through August 2009 provided approximately $280.8 million, or 74 percent of ATSG's consolidated revenue, and $4.0 million, or 64 percent of its pretax earnings, for the first quarter of 2008. The reduction of 39 DC-9 aircraft could affect as many as 500 flight, maintenance and support employees.
ATSG provides air cargo transportation and related services to domestic and foreign air carriers and other companies through five principal subsidiaries, including three airlines.
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