Astar asks DOT to drop DHL case
Astar Air Cargo, formerly DHL Airways, asked the Department of Transportation on Tuesday to dismiss the latter’s investigation into the all-cargo airline’s ownership. Astar said the airline’s July 14 sale rendered the inquiry moot.
“With completely new owners, who are indisputably U.S. citizens eager to compete with FedEx and UPS, the citizenship of Astar must be treated in the normal manner, not shoe-horned into this docket where it does not fit and does not belong. The issue in this docket, the citizenship of Airways in light of the May 2001 reorganization, is now moot and must be dismissed,” the filing stated.
A federal law passed last spring mandated the investigation, which was prompted by complaints from FedEx Corp. and United Parcel Service that DHL Airways’ ownership structure violated citizenship requirements for U.S. airlines.
UPS and FedEx contend that DHL International and parent Deutsche Post World Net still maintain effective control of Astar because the airline gets most of its business from a DHL’s U.S. subsidiary, DHL Worldwide Express.
Deutsche Post, DHL and Astar contend that the airline’s former principal owner was William Robinson, a U.S. citizen and investor based in Idaho. Robinson and DHL International, which held a minority stake in the carrier, last week sold their shares in DHL Airways for $57 million to an investor group led by John Dasburg, the carrier’s chairman and chief executive. Once the sale was completed, the Miami-based carrier changed its name to Astar.
Robinson defied an order from the administrative law judge presiding over the case, Ronnie L. Yoder, to testify Tuesday. His lawyers contended that his testimony would be irrelevant since he no longer owned a stake in the carrier.
Other Deutsche Post/DHL executives who have refused to testify in the case include Klaus Zumwinkel, chief executive of Deutsche Post World Net; Uwe Doerken, chief executive of DHL International, and Wolfgang Pordzik, president of Deutsche Post World Net USA, the German company’s lobbying arm in Washington.
FedEx and UPS are considering the possibility of going to a federal district court to compel Robinson, Zumwinkel, Doerken and Pordzik to testify.
In a separate action, Judge Yoder last week extended the discovery period for UPS and FedEx to obtain documents from Deutsche Post, the various DHL entities and Astar to July 25. The deadline had been July 18. FedEx and UPS accuse Deutsche Post and DHL of stonewalling. In return, they accuse FedEx and UPS of seeking to maintain their duopoly in the U.S. express market by blocking the emergence of a more formidable competitor. DHL will be a stronger rival once it completes its acquisition of Airborne Inc., the third-largest express carrier in the U.S. market after UPS and FedEx.
Judge Yoder, who operates independently of the normal DOT chain of command, has also asked DOT to extend the deadline for making his recommendations in the case from Oct. 31 to Jan. 31.
