Astar asks U.S DOT to reject FedEx-UPS motion

Asserting that its competitors “will stop at nothing to prevent competition,” Astar Air Cargo, formerly DHL Airways, urged the U.S. Department of Transportation to reject a joint request from FedEx and United Parcel Service to refer the probe of Astar’s ownership to the agency’s inspector general. Astar charged that its opponents were pulling out all the stops to delay a resolution of the controversial case.

FedEx and UPS are acting “like a punch-drunk bully who flails at anything in his path,” said Ray Lutz, Astar’s vice president of business development and strategic planning.

The DOT on July 30 ruled that the inquiry by the department’s chief administrative law judge, Ronnie L. Yoder, should be confined to the citizenship of Astar after the airline was sold on July 14 to an ownership group led by its chairman and chief executive, John Dasburg.

But FedEx and UPS insist that evidence regarding the prior ownership of the airline is relevant to the issue of control. The U.S. integrators carriers contend that Astar is actually controlled by Deutsche Post and DHL International, two foreign entities, because it gets most of its cargo from a U.S. subsidiary of DHL International, just as DHL Airways did. U.S. law requires that U.S. airlines must be majority-owned and controlled by U.S. citizens.

Astar contends that FedEx and UPS are simply trying to preserve their duopoly in the U.S. express market by blocking competition. It called the motion to refer all the documents and submissions in this proceeding to the inspector general “legally flawed and factually baseless.”