Freight DogsFinally a forum for those midnight prowler types who utilise the unglamorous parts of airports that many of us never get to see. Freight Dogs is for pilots and crew who operate mostly without SLF.
When bilaterals change, both FedEx and UPS will adapt accordingly. One thing is for sure, the packages will move one way or another, and companies really don't care how volume moves, as long as the method is cheap and reliable. In the meantime FedEx and UPS are complying fully with current laws, unless you can prove otherwise. Both FedEx and UPS use contractors in Europe for flying they are not authorized to perform. I was puzzled when FedEx recently was given authority to establish a crew domicile in CGN with US pilots living in Germany, so German authorities must have approved that.
These EU vs US debates will continue forever, or at least until the EU becomes a single sovereign state...
The REAL question is why there are no EU operators that can provide the required intra-EU service. Surely they could do it cheaper with local labor than UPS does with its top-of-the-industry pay and extra costs of foreign domiciles! Don't blame it on the US -- blame it on the EU and its business environment!
Apparently there are still holes in the regulations that allow Fedex to open a US pilot base in CGN. I did not realize this was the case. I always had the assumption that the pilots were positioned into Germany / France for their duty and then positioned out again. They never receive a residence permit did they? I find this hard to believe. Can you show me something where this is stated? If this is the case it means that there is even more reasons to stop this nonsense.
All EU memberstates already have a EU-passport:Click
Just look above the name of the country. Although the EU exists of different member state the foreign politics is dealt with on a European level. So was the open skies agreement.
Again, I understand your argument, so good luck with your cause. All you have to do now is convince both the EU and the US Government to adopt your point of view. Until the EU is represented by one seat in the UN I don't think the US will be inclined to agree, but that is just my personal opinion.
Republican Senator John Thune, a sponsor of the measure, said it sent a "strong message" to the EU that it cannot impose taxes on the United States.
"The Senate's action today will help ensure that U.S. air carriers and passengers will not be paying down European debt through this illegal tax and can instead be investing in creating jobs and stimulating our own economy," Thune said in a statement.
What Are Open Skies?
Open Skies agreements between the United States and other countries expand international passenger and cargo flights by eliminating government interference in commercial airline decisions about routes, capacity and pricing. This frees carriers to provide more affordable, convenient and efficient air service to consumers, promoting increased travel and trade and spurring high-quality job opportunity and economic growth. Open Skies policy rejects the outmoded practice of highly restrictive air services agreements protecting flag carriers.
1 . Each Party grants to the other Party the following rights for the conduct of international air transportation by the airlines of the other Party : the right to fly across its territory without landing ; the right to make stops in its territory for non-traffic purposes ; the right to perform international air transportation between points on the following routes : for airlines of the United States (hereinafter "U .S . airlines"), from points behind the United States via the United States and intermediate points to any point or points in any Member State or States and beyond; and for all-cargo service, between any Member State and any point or points (including in any other Member States) ; for airlines of the European Community and its Member States (hereinafter "Community airlines"), from points behind the Member States via the Member States and intermediate points to any point or points in the United States and beyond ; for all-cargo service, between the United States and any point or points ; and, for combination services, between any point or points in the United States and any point or points in any member of the European Common Aviation Area (hereinafter the "ECAA") as of the date of signature of this Agreement; and (d) the rights otherwise specified in this Agreement .
2 .Each airline may on any or all flights and at its option : operate flights in either or both directions; combine different flight numbers within one aircraft operation ; serve behind, intermediate, and beyond points and points in the territories of the Parties in any combination and in any order ; omit stops at any point or points ; serve points behind any point in its territory with or without change of aircraft or flight number and hold out and advertise such services to the public as through services ; make stopovers at any points whether within or outside the territory of either Party ; carry transit traffic through the other Party's territory ; and combine traffic on the same aircraft regardless of where such traffic originates ; without directional or geographic limitation and without loss of any right to carry traffic otherwise permissible under this Agreement .
3 . The provisions of paragraph 1 of this Article shall apply subject to the requirements that : for U.S . airlines, with the exception of all-cargo services, the transportation is part of a service that serves the United States, and ii for Community airlines, with the exception of (i) all-cargo services and (ii) combination services between the United States and any member of the ECAA as of the date of signature1 of this Agreement, the transportation is part of a service that serves a Member State .
4 . Each Party shall allow each airline to determine the frequency and capacity of the international air transportation it offers based upon commercial considerations in the marketplace . Consistent with this right, neither Party shall unilaterally limit the volume of traffic, frequency or regularity of service, or the aircraft type or types operated by the airlines of the other Party, nor shall it require the filing of schedules, programs for charter flights, or operational plans by airlines of the other Party, except as may be required for customs, technical, operational, or environmental (consistent with Article 15) reasons under uniform conditions consistent with Article 15 of the Convention .
5 . Any airline may perform international air transportation without any limitation as to change, at any point, in type or number of aircraft operated ; provided that, (a) for U.S . airlines, with the exception of all-cargo services, the transportation is part of a service that serves the United States, and (b) for Community airlines, with the exception of (i) all-cargo services and (ii) combination services between the United States and a member of the ECAA as of the date of signature of this Agreement, the transportation is part of a service that serves a Member State .
6 . Nothing in this Agreement shall be deemed to confer on : U.S . airlines the right to take on board, in the territory of any Member State, passengers, baggage, cargo, or mail carried for compensation and destined for another point in the territory of that Member State ;
7. Community airlines' access to U .S . Government procured transportation shall be governed by Annex 3 .
Operator Our next question will be a follow-up from the line of Mr. Tom Wadewitz of JPMorgan.
Thomas R. Wadewitz - JP Morgan Chase & Co, Research Division Yes. Scott, I think you might be disappointed if you didn't get at least a second question on TNT. So I'll try to give you one more on that. I think there have been -- there's been a lot of noise about what the EC is going to do and the idea that they are being really granular in how they're defining markets, that, that might be a challenge. Is there any kind of a high-level comments you can give us in terms of the SO? Did this end up being a bit more challenging, more stringent than you would've expected? Would you say, at the end of the day, it's pretty reasonable what you have in there? Can you kind of shade it in terms of being a little better or a little worse than you would've expected on the SO?
D. Scott Davis - Chairman, Chief Executive Officer and Chairman of Executive Committee I think that it's a complex transaction. And whenever you get into phase 2, you spent a lot of time with the Commission, and our team has spent a lot of time with Commission. I think it's been good, open dialogue. I think we're exchanging information. We got a ways to go. And certainly, we just got the SO Friday night. So we're obviously going through that right now. Over next couple of weeks, we'll spend a lot of time responding to that. I know Dan Brutto has spent a lot of the last couple of months in Europe on this project. Any comments, Dan?
Daniel J. Brutto - Senior Vice President and President of UPS International Yes, sure. I think what I could say is we both have -- they have a case team. We have a team that's working constructively. As Scott said, it's very complex. It's all the 27 member states of the EU that they're tasked with taking a hard look at, and it's just part of the process. The SO is part of the process. We'll go through that. We'll have our response back. But the good news is the team have -- the teams have open dialogue, and certainly, we're going to turn in the documents that is required by the Commission within the timeframe.
D. Scott Davis - Chairman, Chief Executive Officer and Chairman of Executive Committee And we're confident we'll get clearance and we'll get it early in 2013, and we're committed to the transaction.
The USA does not need to get involved. just give Washington a notice that from 01/01/2014, no commercial flights within the Schengen area will be allowed by non EU registered aircraft.
But Ireland and the United Kingdom have not and are not required to implement Schengen while Iceland, Liechtenstein, Norway, Switzerland (EFTA) European Free Trade Association - Wikipedia, the free encyclopedia are part of Schengen but not part of the EU. Then you have Bulgaria, Cyprus and Romania who are part of the EU but have yet to comply with Schengen. All very confusing to an American!
Schengen Area - Wikipedia, the free encyclopedia
"The Schengen rules were absorbed into European Union law by the Amsterdam Treaty in 1999, although the area officially includes four non-EU member states—Iceland, Liechtenstein, Norway, Switzerland—and de facto includes three European micro-states—Monaco, San Marino, and the Vatican. All but two EU member states—Ireland and the United Kingdom—are required to implement Schengen rules. With the exception of Bulgaria, Cyprus and Romania, all other EU member states have already complied."
TNT Express in Talks to Sell Unit to Finalize Takeover by UPS
Talks to Sell Unit to Finalize Takeover by UPS - WSJ.com
Dutch package-delivery company TNT Express NV TNTE.AE +2.86% is in talks with at least two bidders to sell its airline unit as part of its effort to finalize a takeover by United Parcel Service Inc. UPS +3.03%
The talks are at an advanced stage, but they're complicated by concessions UPS and TNT Express may have to make to win approval from European competition regulators, according to people briefed on the discussions.
UPS has already said that TNT Airways needs to be sold before it closes the acquisition of the parent company to comply with airline-ownership rules.
TNT Airways operates a fleet of 28 aircraft from its hub in Liege, Belgium, according to Ascend, an aviation consultant. Most are cargo jets providing long-haul services to Asia and shorter flights throughout Europe to support its parent's package-delivery business.
Potential buyers are being asked to continue providing UPS with service for a year after the close of the company's planned takeover of TNT Express, according to the people briefed on the situation.
They would also have to provide commitments to lawmakers in Wallonia, the southern region of Belgium where Liege has been built into a major logistics center.
Potential buyers include private-equity firms and General Logistics Systems, an Amsterdam-based delivery company controlled by the U.K.'s government-owned Royal Mail Group. GLS declined to comment.
TNT Express said it is talking to interested parties and that a solution needs to be in place when the UPS deal closes. It also confirmed that the airline unit would need to continue providing it with air service.
Scott Davis, UPS's chief executive, reiterated Tuesday that he expected the TNT Express deal to close despite the competition concerns raised last week by EU regulators.
"We're confident we'll get clearance, and we'll get it early in 2013," Mr. Davis said on a conference call after UPS reported a drop in third-quarter profit.
The company said its overall package volume rose 2.9% in the quarter, but soft international trade and more lightweight shipments linked to online shopping dampened results. A big charge stemming from pension restructuring also hurt.
UPS reported a third-quarter profit of $469 million, or 48 cents a share, down 56% from $1.07 billion, or $1.09 a share, a year earlier. Excluding items such as the pension-related charge, adjusted per-share earnings were $1.06 in the most-recent quarter. Revenue was down 0.7% to $13.07 billion. Analysts polled by Thomson Reuters had most recently forecast earnings of $1.06 a share on revenue of $13.31 billion.
The company agreed in March to buy TNT Express for about 5.16 billion euros ($6.73 billion) in an effort to expand its market position in Europe. They had hoped to close a deal by the third quarter, but EU competition officials expressed concern about the impact of reducing the number of companies that control pan-European parcel-transport networks to three from four.
The effort to sell TNT Airways comes as the first-half recovery in global air cargo demand appears to be stalling, according to the International Air Transport Association.
Mr. Davis said the European market for small-package deliveries had remained relatively robust despite the increase in economies in the region moving into recession.
UPS shares were recently up 3.2% at $73.81, with TNT Express 2.9% higher at €8.14.
Whether you fly for a mainline airline, a cargo operation, or a regional carrier, widebody or narrowbody, you are needed, now, in the aviation battle of our lives.
On this issue, we must stand as one, now, or we will be undone.
Last month, the European Union (EU) finally went public with what we have known it’s been plotting to do for some time: The EU is going to again attack our laws on foreign ownership and control.
The goal: to enable foreign investors from around the world—corporations, airlines, and even countries—to buy and take control of our airlines.
Simple, stark, and devastating, this change spells catastrophe for our carriers and our careers—just when some of our airlines are finally recovering from the misery of the last decade.
Once they have control, foreign investors, including state-owned airlines in the EU, China, and the Gulf, can take over our foreign flying, merely by reversing the destination and origination points of a flight, so that what was once ORD-SIN-ORD will become SIN-ORD-SIN. The crews will be foreign-based and operating under a totally different set of safety and security rules.
So we will be feeders for the foreign owners’ international flying. Then they will attack our cabotage rules and go after our domestic markets. Aviation in this country will go the way of the maritime industry, and we’ll be finished.
You can see it unfolding right now. Qantas and Emirates recently announced a “global partnership.” Reading between the lines of the newly-structured alliance, it is clear that Emirates will perform the overwhelming majority of international flying while Qantas will remain largely a domestic feeder carrier.
Although the population of Australia is almost three times as large as that of the Emirates, of the 98 weekly Australia-Dubai flights, Qantas will operate only 14 while Emirates will operate 74. Emirates will also be taking over many of Qantas’ flights into Europe and Asia. Of the 7 daily flights into Heathrow, Emirates gets 5 and Qantas 2.
We have been gearing up for this fight, but we have much to do. In my letter to you earlier this month, I described how we have changed the way we tackle problems in Washington, with a pilot partisan agenda that does not let party politics get in the way of our work in D.C. With a team of highly skilled professional staff and volunteer pilot advocates, we are building the network we need to succeed in Washington.
But it’s not enough. Our recent battles in Washington pale in comparison to the onslaught we are about to face on foreign ownership.
Here’s what we need you to do right now:
First, contact your local council representatives and ask how you can give time to support the pilot legislative affairs network on your airline.
Second, print this e-mail and forward it to your friends, and talk to your fellow ALPA members about this issue, and don’t let up.
Third, talk to pilots from other airlines not represented by ALPA and tell them that their leaders needs to get in line with ALPA on this issue.
Fourth, stop stalling on your contribution to the ALPA-PAC.
Fifth, get your pen and paper and your walking shoes ready, because you’re going to be called on to write letters by the dozens and, when the time comes, to stand up for our profession through marches and demonstrations.
If we are united, we’ll overcome this challenge, again. If we are divided, we will fail, and our jobs will be taken from us, permanently.
On this issue, we must stand as one, now, or we will be undone.
TNT Express assessing options for TNT Airways disposal
TNT Express is preparing to sell a majority shareholding in its TNT Airways (3V) subsidiary, if its planned merger with United Parcel Service (UPS) receives the go-ahead.
The two would-be partners are preparing their response to a European Commission statement of objections to their merger, which is slated for completion in early 2013 (ATW Daily News, Oct. 19 ).
However, if the deal is approved, TNT Express will have to give up its controlling stake in Belgian cargo and passenger airline 3V because companies that are majority-owned by non-European interests are banned from holding controlling stakes in European airlines.
“The divestment will occur a fraction of a second before the deal completes,” said TNT Express interim CEO Bernard Bot, speaking on TNT Express’ third-quarter results conference call. He added that TNT Express is aiming to sell 3V to a bidder that is experienced in airline operations and able to offer a seamless transition “at the moment of completion.”
After the sale, 3V will be independent and able to offer services to “whoever they want,” but the airline will continue to fly some routes for the newly merged TNT/UPS. However, Bot remained extremely tight-lipped on whether there are any plans to keep a non-controlling stake in the airline.
Separately, Bot hinted that 3V’s deal with Emirates, covering 50% of the capacity on three Boeing 777s from Liege, Belgium to New York JFK and Hong Kong, could be coming to an end due to weak demand. “We are in discussions about how that will continue after December. It is likely to take a different form,” Bot said. “In 2012, there will be no big impact and we are hoping to mitigate the effects in 2013.”
The comments came as TNT released its third-quarter results, reporting a 2.1% rise in revenues to €1.8 billion and a €9 million net profit, up from €5 million in the third quarter of 2011. UPS also recently filed its third-quarter results (ATW Daily News, Oct. 23 ).
UPS/TNT deal asks questions of EU competition structures 26/Nov/2012 by Thomas Cullen
Over the past week, the European Union has been convulsed in one of its periodic bouts of organisational apoplexy. The meetings to settle the next seven years budget are typical of its internal processes. Conducted at a glacial velocity and in the most inefficient manner possible, they are characterised by cynical self-interest, disguised with a veil of idealism.
However, it is not just at the strategic level that the EU is a failing organisation. Its ability to act as a regulator also suffers from problems. The so called 'single market' is one of the organisation's few achievements, however the ability of the regulatory structures to manage competition do not always inspire confidence.
The purchase of TNT Express by UPS is a good example. Originally a deal which was to be concluded in the third quarter of 2012, it is now delayed until well into next year as the European Commission will not finish its investigation into the effects on competition caused by the takeover any earlier than January. Yet, despite the length of the enquiry, it is still unclear what the objections- if any - to the deal are.
The content of the 'statement of objections' that the competition authorities of the European Commission have handed to UPS has not been made public. So why is it acceptable that the key staff in the Commission give interviews about the case to journalists, reported in such a manner that they are incomprehensible and only add to the uncertainty? Similarly the commissioner in charge of competition, Joaquin Almunia, gives speeches that apparently outline the principles on which the decision will be made, yet with references so vague and so short that it is impossible for anyone outside Brussels to know what they mean.
In this process, the lack of transparency has been one of the key failings. Either the process is confidential or it is not. It would be better if the Commission could publicly explain its perspectives on the potential takeover, however if it cannot do this it should stop making semi-public comments. It should also seek to make the process as rapid as possible in order improve confidence amongst customers and investors.
The express parcels market is complex and difficult to understand and it is unclear if the Commission fully understands it. The habit of emitting garbled messages does not increase faith in the regulatory process. Of course, the purpose of any market regulation mechanism is to ensure effective competition and thus the best service to the customer. However, that regulation should also ensure that the workings of the market are as transparent as possible. If the processes of the regulator are not understood properly, it injects uncertainty into the market and acts as a brake upon investment.
ASL outlines acquisition plans as TNT and UPS wait on merger By Alex Lennane 11.22.2012
The landscape of Europe’s express market will change dramatically if the EC gives the green light to UPS’s takeover of TNT, not least in the express feeder segment, where significant consolidation is also poised to get underway.
Industry observers had assumed that TNT’s subsidiaries, TNT Airways and Spain’s Pan Air, which had to be sold to a European company under EU airline ownership rules, would take on the feeder services of the newly merged UPS. But, said ASL’s CEO Hugh Flynn, in an interview with The Loadstar, this may not be the case.
“In the short-term we have a contract with UPS, but ultimately there are no guarantees of future business with it,” he said. “We are contracted to do what TNT was doing, but as it becomes UPS the form and contract will change. And how it changes is the million dollar question.”
The deal will come in with immediate affect if the European Competition Commission approves the overall merger between UPS and TNT, a decision which must be made by 15 January.
A spokesman for UPS confirmed that ASL will continue TNT’s operations in the short term. “ASL will continue all TNT Express routes for the combined UPS and TNT Express organization. It is expected that the airlines’ ownership transfer will have no impact at the TNT Express hub in Liege for at least one year.”
After that period, added the spokesman, “ASL will become a key third-party provider of the combined UPS-TNT Express Group, and will be invited to bid for all of the combined group’s outsourced air business in Europe when this becomes open to tender.”
Mr Flynn added: “The network will take on a different shape, but a lot of what happens will depend on UPS and its long-term requirements.”
Sources say that UPS’s plans are wrapped in secrecy owing to corporate governance requirements that could see UPS and TNT competing if the merger is not approved. UPS chose not to comment on what conditions the EU could impose which would see it walk away from the deal. Since announcing the merger plan in March, the US express company has extended the regulatory review period twice and last week met with EU officials to press its case. But it remains confident that the deal will be approved.
According to Bloomberg, the markets believe the deal has a 50:50 chance of success. If UPS pulls out, it must pay a €200m break up fee to TNT.
No information has been made available on other bidders for TNT’s air operations, but Mr Flynn reveals that it has been a long process.
“It’s hard to know how we compared with other bids. In the first round, we were on the low side, but we put in a higher bid in the second. The rhetoric from UPS was that it wanted someone who had the capability to handle all aspects, and who could stay with it for the next few years.”
UPS would not be drawn on its criteria for the sale, saying only: “I cannot give you specific criteria, but ASL is an established group of European aviation companies. The sale ensures continuity to our customers and almost all airline employees will stay with the airlines under the new owner.”
ASL, which has been seeking new investment, is made up of a group of five companies, three of which are express airlines: Air Contractors in Ireland, Europe Airpost in France and South Africa’s Safair, with a combined fleet of more than 90 aircraft. But even with its latest additions, ASL, which “self-funded” the deal, is continuing to seek acquisitive growth. “We are looking at a couple of things in Europe. I think there will be some more consolidation. The dimensions will change for DHL and Fedex. We can provide lift to them all, as a neutral provider.”
Europe’s express supplier market is facing challenging times, with several operators seeking growth outside the continent. Iceland’s Bluebird Cargo is up for sale, while Swiss-based Farnair has invested in an operation in India, and moved aircraft to Papua New Guinea; and West Atlantic has found new business in Chile. The latter two companies told The Loadstar that they thought UPS’s merger plans would create more opportunities in Europe, and that it was a chance for a “shake-out”, but Mr Flynn thinks other express suppliers will find the new marketplace “challenging”.
“With some smaller feeders, the willingness is there, but the capability is not. I think we will see people moving out of the sector, and I think this deal and UPS’s takeover of TNT will make it harder for others, I’m sorry to say. I think there may be some casualties.
“The deal represents a paradigm shift. The feeder industry has tapered down over the past decade. Several have gone out of the business. We’ve hung in, largely because of strong contracts with large aircraft investors. It’s important to provide outstanding service, and you need to be solid enough to be dependable.”
Before the EU announces its decision, ASL will focus on its near-term future. “The next few weeks won’t be about TNT. The deal was really drawn out, so now we need to focus on our business from a planning point of view in anticipation of a TNT transitionary plan. We’ll ready ourselves for that,” Mr Flynn said.
It is time that the EU says no to the ever growing dominance of the American cargo airlines in the European Express freight market. I am getting sick and tired of hearing every night more and more yankee cargo pilots on the ATC frequency. In return, we never ever have a chance to operate in the US ourselves.
EU commitee, do something about this! The open skies agreement has to be changed as soon as possible. If not, in the near future at least 300 European pilots and with the subcontractors many more will lose their jobs in favour of UPS and Fedex who exetnd their illegal practices in Europe more and more: flying cabotage and basing pilots with their families for as long as five years in Europe without paying taxes and/or social security in Europe.
Make a new EASA rule that intra EASA flights must be operated by EASA licence holders and EASA member state registered aircraft.
It is bloody overdue that we kick the Yanks out of our airspace if they are not willing to allow us the same rights in the USA.
And all you Americans telling us that they are not,performing Cabotage... learn the true meaning of cabotage. it is a flight by an airline belonging to a different zone, performing domestic flights in another economic zone. Schengen zone is one economic area, and is considered domestic for all legal purposes. so your airlines ARE breaking the law.
Now the aircrew performing these flights are just doing their jobs, earning bread on the table. It is at the Political level that we must act, not on our collegues.