DHL Airways Discloses Plan to Sell Itself to Chairman

DHL Airways Inc., the cargo airline for DHL Worldwide Express Inc., disclosed yesterday during a government hearing that it planned to sell the business to its chairman and chief executive, John Dasburg.

The relationship between DHL Airways and DHL Worldwide, which is owned by Deutsche Post of Germany, is being investigated by the Department of Transportation to determine whether DHL Airways is in violation of federal laws that limit the stake that a foreign entity can hold in a United States airline. DHL Worldwide owns a 25 percent stake in DHL Airways, the legal limit for a foreign investor.

The FedEx Corporation and United Parcel Service Inc., which have been waging an aggressive lobbying campaign against DHL Airways and DHL Worldwide, contend that the structure is a ruse to skirt the foreign-ownership limits. DHL Airways receives about 90 percent of its revenue from DHL Worldwide.

The sale plan comes just weeks after DHL Worldwide announced its own plans to acquire the ground delivery business of the rival Airborne Inc., leaving its airline-delivery business independent to avoid any questions about foreign ownership.

The sale of DHL Airways to Mr. Dasburg, the former president of Northwest Airlines, is an attempt to further defend its relationship with DHL Worldwide. However, some legal experts expect that the Department of Transportation’s chief administrative law judge, Ronnie Yoder, may apply another test of foreign ownership or control: the source of DHL Airways’ revenue. If Judge Yoder determines that DHL Airways is controlled by DHL Worldwide by providing it with a majority of its revenue, DHL Airways could be barred from flying, though analysts suggest that such an outcome is highly unlikely.

Under the terms of the deal between DHL Airways and Mr. Dasburg outlined yesterday, Mr. Dasburg would acquire DHL Worldwide’s 25 percent stake in DHL Airways and also acquire the remaining 75 percent from William Robinson, a United States citizen.

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