Judge rules for DHL in US airline case
The protracted dispute between UPS, FedEx and DPWN in the US could be drawing to a conclusion following a ruling by an administrative judge appointed by the Department of Transport. The dispute has focused around the ownership status of the airline which DHL, DPWN’s express subsidiary, uses as its US carrier. UPS and FedEx asserted that the airline, Astar Airways, was effectively controlled by DPWN, even though it was technically owned by US citizens in line with existing regulations. The judge examining the case has decided that Astar Airways meets all the legislative requirements, effectively backing the case of DPWN.
Although the ruling by the judge is only a recommendation to the Department of Transport, it is believed that given the DOT’s previous rulings on the issue – which have all gone in favour of DHL – the decision will be rubberstamped. DPWN’s disposal of its share in the airline to a third party last year and a change of management were thought to be important factors in the decision by the judge. This also brought about the change of name from DHL Airways to Astar Airways.
The issue of Astar’s ownership had threatened to impact on DHL’s strategic development in the US market although the company has always maintained that a negative ruling would not de-rail its plans. However, unless the DOT heeds calls by UPS and FedEx to overturn the decision of the judge, DHL will now be able to focus on the integration of its operations with Airborne Express, which it acquired in 2003.
