Judge will decide DHL case
An administrative law judge will resolve the dispute over the ownership of DHL Airways as part of an amendment to the $79 billion Wartime Supplemental Appropriations bill approved by the House and Senate on Saturday.
The amendment, sponsored by Sen. Ted Stevens, R-Alaska, also prohibits DHL Airways from carrying Defense Department cargo for the next six months.
The measure is a victory for FedEx Corp. and United Parcel Service, which have argued that DHL Airways is effectively controlled by Deutsche Post World Net, the German mail and express giant. DHL and Deutsche Post have denied the charges, saying DHL Airways is owned and controlled by William Robinson, an American citizen.
DHL had no comment on the amendment. UPS said it “reaffirms UPS’s longstanding concern regarding Deutsche Post’s ownership and control of DHL Airways.” UPS added that it looks forward to “the expeditious appointment of an administrative law judge.”
Both UPS and FedEx have argued that DOT should appoint an administrative law judge to resolve the ownership issue.
Responding to a letter from Transportation Secretary Norman Mineta, Congress watered down the original version of the amendment, which would have changed the criteria DOT uses in determining a carrier’s ownership. Mineta said such a change “could have serious, unintended consequences,” such as preventing U.S. air carriers from accepting lucrative foreign contracts to avoid any danger of having their operating certificates revoked.
The bill directs Mineta to appoint a judge to decide the DHL ownership issue.
The original version could have automatically blocked DOT approval of DHL Worldwide Express’s proposed acquisition of Airborne Inc. DHL plans to spin off Airborne’s airline subsidiary, ABX Air, in order to comply with U.S. ownership law. Under that plan, ABX Air would be owned and controlled by American citizens.
FedEx and UPS, however, argue that it would in effect still be controlled by DHL and Deutsche Post since DHL will be its principal customer.
DHL had no comment on the amendment.
Kristin Krause, a spokeswoman for FedEx, said it will welcome the investigation by the administrative law judge to determine whether Deutsche Post effectively controls DHL Airways. “We’re long-term proponents of free trade and open skies as long as there’s reciprocity. That’s not the case with Germany. We can’t fly point-to-point within Germany,” she said.
President Bush is expected to sign the bill even though it contains about $5 billion in additional spending beyond his original request to Congress for supplemental funding for the war in Iraq.
