Airborne Inc criticizes airline ownership proposal
Airborne Inc. lashed out at rival package carriers United Parcel Service and FedEx Corp. over a proposal being considered by the U.S. Senate to toughen ownership rules for air carriers.
Seattle-based Airborne contends the amendment, added to a Senate appropriations bill last week, is aimed at torpedoing DHL express mail company’s planned $1.05 billion buyout of Airborne’s ground-delivery operations. DHL is a unit of German postal service Deutsche Post, Europe’s largest mail company.
“It is no surprise that they would attempt to protect their duopoly in any way they can,” Airborne said in a statement Monday. “Their attempts to delay our transaction will limit opportunities for American workers and deny choice to American consumers.”
Represenatives of UPS and FedEx denied that they are trying to quash competition.
“Airborne has been a very strong competitor since 1943 to UPS and we do not think a duopoly exists,” said UPS spokesman David Bolger.
He and FedEx spokeswoman Sandra Munoz said their companies have complained for more than two years that the U.S. Department of Transportation needs to look at foreign ownership and control issues, particularly with regard to Deutsche Post’s investment in DHL.
Under the proposed buyout, which needs regulatory approval, DHL would buy Airborne’s ground delivery operations. Airborne’s air operations will be renamed ABX Air, and remain in the hands of its existing shareholders. U.S. laws prohibit foreign control of domestic airlines.
Currently, foreign entities can own no more than 25 percent of a U.S. air carrier. The amendment to the Senate appropriations bill would require air carriers to be “effectively controlled” by U.S. interests.
UPS and FedEx contend that the DHL-Airborne deal would skirt current laws; DHL could exert control over Airborne through the service agreement, Bolger said.
