TNT Express assessing options for TNT Airways disposal | ATWOnline
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 [2]).
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 [3]).