LAXintl From United States of America, joined May 2000, 22241 posts, RR: 51 Posted (7 months 2 weeks 5 days 13 hours ago) and read 2323 times:
TNT is preparing to sell its shareholding in TNT Airways.
With the acquisition of TNT by UPS, regulations would bar non-EU company from controlling stake in European airline.
As envisaged TNT would sell the airline to a bidder that would be able to takeover and offer seamless transition.
Once sold, TNT Airways would be free to sell it services to other parties but would still continue to operate "some" routes for UPS.
In addition TNT's deal to share capacity on 3 Liege based 777 Freighters with Emirates would likely come to an end in December as well.
HPRamper From United States of America, joined May 2005, 3701 posts, RR: 8 Reply 2, posted (7 months 2 weeks 4 days 18 hours ago) and read 1594 times:
The airline isn't going away or selling planes off, at least at this point. This is basically a move to spin-off the airline from the rest of the company.
LAXintl From United States of America, joined May 2000, 22241 posts, RR: 51 Reply 3, posted (7 months 2 weeks 4 days 17 hours ago) and read 1486 times:
Per the UPS earnings call, the future owner would be required to operate I believe the count was 26 aircraft for UPS for a 1-year period at Liege.
But like article indicates, the divested carrier would be free to pursue its own alternate business interest otherwise.
So I would think the future of the Liege hub would also be up in the air especially considering UPS last year launched a $200mil expansion at CGN.
From the desert to the sea, to all of Southern California
blueflyer From United States of America, joined Jan 2006, 3161 posts, RR: 1 Reply 4, posted (7 months 2 weeks 4 days 16 hours ago) and read 1425 times:
In the short term, the TNT Liege hub isn't going anywhere. Even taking into account the current expansion work, UPS's Cologne hub doesn't come close to having the infrastructure it needs to handle TNT's volume in-house. That would require another expansion bigger than the current one. Keep in mind that in the European marketplace, UPS is third behind TNT until the merger is completed. Once completed, UPS' volume will more than double overnight.
In the long term, UPS could expand its hub and move everything to Germany, but I think it unlikely, and frankly ill-advised.
While they are not as strident as they have been, there are still grumblings from certain corners in Germany about trying to ban all night flights. Keeping LGG is a cheap way for UPS to insure itself against the remote but real possibility they might have to move in the future.
Finally, given the combined TNT-UPS volume, I think it would be a mistake to put all their Continental European eggs in the same basket.
Even though they're close to one another, I expect LGG to remain open, albeit focused on European shipping, with CGN becoming a trans-continental platform. I think TNT will keep only the 734s in its fleet, and perhaps retain the contract with Icelandair for a handful of 757s (unless UPS has a few they can spare and send over to TNT). The 777s will probably end up with FedEx, Qatar or Southern (for DHL ops), the 747s will join the UPS fleet and the remaining aircraft (733s and 146/Avro) sold or retired piecemeal.
LAXintl From United States of America, joined May 2000, 22241 posts, RR: 51 Reply 5, posted (7 months 2 weeks 4 days 13 hours ago) and read 1215 times:
I'm not sure the viability of running two hubs mere 76 miles apart.
Besides the physical duplication of infrastructure and their operating cost, segregating the hubs based on type of freight will lead to lots of duplication of flights.
For instance does it make sense to dispatch 2 aircraft from a spoke like Stockholm with half loads to the two separate hubs simply because one is intra-Europe traffic, and other is intercontinental cargo? Makes more sense to have a single plane fly the entire load and dump it all at the unified hub for sorting and beyond connection. DHL and Fedex also really only operate a single express hub in Europe.
Lastly regarding the fleets, I don't think its going to be up to UPS what happens with the fleets once the carrier is sold. Beyond the 1-year commitment to provide some flying for UPS, its the new owners that will have carte blanche to make the changes they believe are in their own interest.
From the desert to the sea, to all of Southern California
PITrules From United States of America, joined Jun 2000, 2714 posts, RR: 3 Reply 6, posted (7 months 2 weeks 4 days 11 hours ago) and read 1046 times:
Quoting blueflyer (Reply 4): In the short term, the TNT Liege hub isn't going anywhere. Even taking into account the current expansion work, UPS's Cologne hub doesn't come close to having the infrastructure it needs to handle TNT's volume in-house. That would require another expansion bigger than the current one.
Also consider that UPS' current airplanes are not at 100% capacity, and they will truck and rail as much of the new volume as possible before using an airplane.
Then there is the unrealistic issue of operating two nearby hubs, which LAXintl explained.
blueflyer From United States of America, joined Jan 2006, 3161 posts, RR: 1 Reply 7, posted (7 months 2 weeks 4 days 10 hours ago) and read 953 times:
The short distance between the two hubs is unusual, but nothing else is.
There are many reasons to have a single hub, and there are many reasons not to. DHL doesn't have a single hub in Europe. The largest one is at LEJ of course, but it also operate regional hubs in BGY, BRU, CPH, EMA and VIT, two of which even have their own intercontinental connections (BRU and EMA).
Just like DHL doesn't have a flight from every station to every hub (ARN, to use your example, flies everything through LEJ, other cities send out three or four DHL flights to different destinations every night), I am not advocating that every UPS station in Europe would have two outbound flights. While the CGN hub would be an intercontinental hub, it could also handily cope with trans-European freight from cities with not enough volume to justify two flights, so the larger stations would fly both to CGN and LGG and the smaller ones to CGN exclusively.
Frankly, there is nothing new that isn't done already by DHL in Europe as demonstrated, but also in Asia, as well as by FedEx and UPS both in Asia and North America.
As for the fleet, it is technically correct that it would be the problem of the new owner of TNT Airways, but it might be easier to sell the airline if it comes with a pre-arranged agreement to dispose of some of the most problematic aircraft.
blueflyer From United States of America, joined Jan 2006, 3161 posts, RR: 1 Reply 9, posted (7 months 4 days 11 hours ago) and read 482 times:
A natural fit, and now ASL gets to boast they serve all the three big integrators, with FedEx using capacity from Air Contractors and DHL getting lift from all three current ASL subsidiaries.
I wonder, does anyone else provide lift to DHL, FedEx and UPS? Best I can do is Icelandic Group, with Icelandair Cargo flying for TNT and Bluebird flying for UPS and DHL.
Quoting PITrules (Reply 6): The sorting capacity of LGG is 30,000 packages per hour:
That page is highly unreliable. Some information has been updated recently, some hasn't been updated since the opening of the hub. If you look a little higher up on the same page, it says current capacity will be doubled in 2004. We're in 2012. Capacity has doubled twice or thrice since, headcount has gone up by 75%, tonnage has increased more than proportionally, etc...
I wish I had a link to support my assertion, but not everything can be found online just yet. Either way, everyone involved in the transition, including UPS' own people, would tell you UPS can't handle TNT's volume in-house.
Even if UPS were able to accommodate TNT's volume overnight, they may not want to anyway. TNT has received a number of subsidies, tax breaks and other financial inducements to set up and grow their operations at LGG. They do come with strings and penalties if the beneficiary doesn't hold up their part of the deal. Having gone through years of mergers and acquisitions, government lawyers have become very good at making sure at least some of these penalties are transferred to a new owner until their expiration.
Quoting PITrules (Reply 6): Then there is the unrealistic issue of operating two nearby hubs, which LAXintl explained.
So unrealistic that UPS has formally asked for the ongoing studies of a high speed night-time freight train service to include a link between Liege and Cologne...
PITrules From United States of America, joined Jun 2000, 2714 posts, RR: 3 Reply 10, posted (7 months 4 days 9 hours ago) and read 482 times:
Quoting blueflyer (Reply 9): I wonder, does anyone else provide lift to DHL, FedEx and UPS? Best I can do is Icelandic Group, with Icelandair Cargo flying for TNT and Bluebird flying for UPS and DHL.
MNG and Star Air are big providers to UPS.
Quoting blueflyer (Reply 9): That page is highly unreliable. Some information has been updated recently, some hasn't been updated since the opening of the hub. If you look a little higher up on the same page, it says current capacity will be doubled in 2004. We're in 2012.
Highly unrealiable? It's TNT's own page, so I'll take it at face value. I did look higher up on the page as you said, all I saw was:
"TNT announced on 25 May 2004 the expansion of the TNT Express European air hub in Liege
"announced", as in past tense, in what is clearly a historical essay on the page.
Quoting blueflyer (Reply 9): So unrealistic that UPS has formally asked for the ongoing studies of a high speed night-time freight train service to include a link between Liege and Cologne...
Like I said, UPS will exhaust all means of ground transport before using an airplane. Furthermore, they've got to please regulators so they will of course talk up LGG.
LAXintl From United States of America, joined May 2000, 22241 posts, RR: 51 Reply 11, posted (7 months 4 days 1 hour ago) and read 481 times:
Yes good deal for ASL.
ASL really grows its portfolio now. Add another 2 airlines to its existing Air Contractors and Europe Airpost certificates.
Though, I do wonder what the long term future will be, as the deal only provides guarantees on TNT Express flying and the the Liege hub for only “at least one year.”
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