Conference Call to Calm ATSG Investors
In the wake of a decision announced in late May by Deutsche Post to enter into an agreement with UPS to provide DHL delivery services in North America, current DHL contractors ABX Air and parent company, Air Transport Services Group (ATSG), has held a conference call to brief nervous investors.
Emphasising that come what may with regard to the DHL - UPS deal, ATSG Chief Executive Officer Joe Hete, said that the company was confident that the company will be in a position to meet its financial obligations and that out of the company’s five principle operating units, four are expected to “continue to grow and prosper, no matter what DHL chooses to do.”
However in addressing Deutsche Post’s intentions to see DHL transfer its business away from ATSG to UPS from 2009, Joe Hete remarked that the “transition and integration that DHL is proposing with UPS is not necessary” given ATSG’s alternative proposal. Hete also said that the DHL-UPS proposal creates risk for DHL in the domestic market, as “connecting two highly globalised air networks, along with their related technology and communications systems, will be an extremely challenging, very expensive undertaking”.
Underlining that a credible alternative to the DHL-UPS proposal does lay on the table for Deutsche Post, Hete also said that ATSG’s proposal is superior to what UPS has offered and would help DHL preserve market coverage, service offerings, competitive positioning and control of shipments. This as well as avoiding the impact of outsourcing business to one of its primary competitors.
Despite the potential loss of its biggest client, ATSG has said that redeployment of dedicated DHL assets such as DC-9 and 767 aircraft, away from the the DHL contract, would be able to serve other customers, on more attractive business terms. The fleet of 44 767’s is said to be a critical asset for the company going forward.
Source: Air Transport Services Group
