UPS may join FedEx in DHL complaint

United Parcel Service may join FedEx Corp.’s request that the U.S. Department of Transportation defer a renewal of DHL Airways’ authority to fly between the United States and Mexico pending completion of an informal review of DHL’s ownership status.

“We think the FedEx filing has merit. There’s certainly reasonable cause for raising this issue,” UPS spokesman Tad Segal said Friday. “They (DOT) should really resolve this ownership issue before routinely granting renewal of licenses.”

Segal said UPS would probably decide within the coming week whether it will file a brief in support of the FedEx complaint.

Tracy Egan, a spokeswoman for DHL, dismissed the FedEx move as “a routine gambit.” She described the DHL request for a five-year renewal of its Mexico authority as “absolutely mundane.”

FedEx and UPS say there are still questions about the ownership of DHL Airways, which was recently split off from the rest of DHL’s operations. DHL Worldwide Express, headquartered in Brussels, is controlled by Deutsche Post, the German postal authority. U.S. law limits foreign ownership of a U.S. airline to 49% of the equity and 25% of the voting stock. DHL contends that its restructuring last spring put it in full compliance with U.S. law.

DOT rejected complaints by UPS and FedEx in May that would have grounded DHL’s operations in the U.S., but said it would review the ownership of DHL Airways.

DHL currently operates three daily flights from its hub in Cincinnati to Mexico City, Guadalajara and Monterrey, for a total of 21 flights per week. These flights, all on DHL Airways’s aircraft, allow the carrier to provide next-day service from most U.S. cities to Mexico City, Guadalajara, Monterrey, Ciudad Juarez, Nuevo Laredo, Tijuana and Mexicali.

Egan said the carrier was not seeking any expansion of its Mexican authority, but only a slight alteration in one route
Journal of Commerce