PPRuNe Forums - View Single Post - Polar Air Cargo to get four 747-400F's!

13th Oct 2007, 18:18

#50 (permalink)

JohnGalt

Join Date: Oct 2007

Location: Galt's Gulch

Posts: 13

Likes: 0

Received 0 Likes on 0 Posts

I would like to add my 1 cent opinion on the ongoing tri-feud between AAWWH, the Polar union, and the Atlas union concerning the “merger.”

Its obvious the Polaroids do not want to merge with the Atlas folks, primarily due to the scab issue caused by Atlas pilots crossing the “line” during Polar’s strike in 2005 and “Polar contract scope issues.”

What is not so obvious is why do the AAWWH/Atlas guys want to so desperately merge w/PACW and create a “crew-leasing” subsidiary under AAWWH?

Simply put, job security----Recent Japan-US bilateral route authority awards.

……24 Sep 07----Today it was announced that Polar Air Cargo Worldwide, Inc. (Polar) will expand operations in Japan following the conclusion of recent U.S.-Japan bilateral civil aviation negotiations.

In addition to an existing six weekly frequencies to Tokyo with related service to one destination beyond Japan, Polar has been granted another six frequencies to Japan, excluding Tokyo, with the right to fly to two foreign destinations beyond this new point. Including the new rights, Polar can now serve a combined total of 12 frequencies in Japan and 18 frequencies beyond. Polar will also have the latitude to choose the new destination in Japan, as well as the points outside of the country…..

This is why DHL has bought 49% of PACW, guaranteed 40% capacity of all Polar flights for 20 years, and wants the other 51% ownership if/when the US-EU “open skies” negotiations (currently in progress) allow for 100% foreign ownership of “US cargo” airlines.

Polar is poised for growth via DHL wanting to expand its international express operations from Asia to US in 2008. But how does Polar grow? Either separately as a stand alone company controlled by DHL or in partnership (DHL/AAWWH) as a subsidiary of AAWWH who wants to use Atlas Air as an ACMI carrier for PACW.

Atlas Air, as an ACMI carrier, lives and dies by the contract. Currently DOD is or will be in the decline airlift mode. Emirates, Atlas’s largest customer, is buying its own freighters and dropping -200 service to numerous destinations. Unless Atlas can generate more contracts with other carriers, it is likely it will be in the retrenching/downsizing mode. Remember also L-38’s post, Atlas Air can’t fly Polar routes in Japan. It can only do so if there is “one crew force flying under both certificates.” Hence, the extreme desire upon the part of AAWWH and Atlas Air folks to consumate a merger with Polar ASAP and create a “crew leasing subsidiary.”

The wild card----Harbert Management Inc/partners now own about 55% of AAWWH. The banks, who got 100% ownership of AAWWH upon emergence from bankruptcy are in the process of selling off their entire inheritance (in lieu of debt). Harbert is a private equity firm that “slices, dices, and restructures” mismanaged, poorly run, undervalued companies. It has already demonstrated their intent. Buy AAWWH (an undervalued asset), cut a deal with DHL (49% PACW) to the legal limit “currently” allowed by US law, install DHL mgt at Polar (CEO, CFO), and wait for further developments (??100% foreign ownership law change??).

If Polar is spun off by Harbert to DHL, Polar fleet and crew size can only grow----at the detriment to Atlas Air, their ACMI business, and their crews.

So it’s a race of time-----US law change on 100% foreign-ownership before/after possible merger of the two pilot unions and creation of a “crew-leasing” company at AAWWH that will service both PACW business and Atlas Air business.

When the pie is cut by Harbert, the Polaroids want it all, the Atlas guys want a slice.

IMHO

Reply