DHL/ATLAS/POLAR Connection?
 

Noted a number of DHL threads on 777 and 767. I guess you can add the 747-400 to it. Looks like DHL has awarded two contracts to Polar which will be flown by Atlas crews and aircraft. Just got this today via the union mass mail.

Here is the pdf file to the unions on it that was sent around.

https://crewroom.alpa.org/AAI072/Des...cumentID=42148

It's actually DHL Cargo - and point of fact is that none of it belongs to, is consigned to, consigned for, or otherwise involves the Altas or Polar pilots.

Let me get this strait. It's OK for Polar to get the DHL contract that was being flown by Northwest Airlines and crews. Then under the Polar World Wide Holdings deal with DHL, Polar is awarded it with full knowledge that some of it was to be flown by Atlas under the alliance. When that same flying is then redirected to Atlas only, before even one box shows up on a Polar A/C, it is a sin against all human kind? So It's GOOD for Polar to fly it and bad if Atlas does it instead?

"Polar / Atlas . . . .have entered into a new Alliance agreement".

Was not the old Polar/Atlas alliance agreement terminated on 06/07 of last year, so that the Holden arbitration award (with regards to Polar's downgraded Captains and "paid to stay at home" FE's) could be mitigated?

L38 -
Polar has no freight. It belongs to the customer - in this case DHL. However, following your logic, if Polar did "have" freight it would belong to AAWH who owns Polar. And it is their right to put it on whichever of their business units they think will most efficiently serve the customer.

The old alliance agreement was terminated because AAWH wrongly furloughed Polar FE's during the time period the alliance agreement was in effect. In this case, no Polar pilots have been furloughed so an alliance agreement is within the confines of the Polar CBA.

I doubt that the Polar crewmembers have ever been more valuable to management than the brand name. I think ALL brand names are more valuable to the managers of those airlines (whether freight or passenger) than the pilots who crew them. That's just the reality of the airline world today.

Whale
Hopefully the next time AAWH lands a big ACMI contract they won't decide the customer will be better served by subcontracting it out to Connie or Evergeen.

I agree. But that has been done before and I am sure will continue to be an option for management. Hopefully, if they feel the need to contract out some of the flying, they will keep it in house.

AAWH has used Southern, Evergreen, and many others to supplement their contracts during heavy maintenance times or transition times. If you have been around this business any length of time you know how incestuous it is. Sure seems like it would be smarter to have a group of business units (that could get along) that could supplement and augment each other.

Hard to convince a pilot group that is 50% smaller and has 50 % less aircraft, that the company has a need to supplement its lift.

You are right it probably is. But it seems that DHL wanted two more aircraft; and wanted them right now. AAWH has some more aircraft. Did you just expect them to give those aircraft to the Polar group to fly because you have been so nice and cooperative about the merger?

To me, the message here is clear. If the Polar pilots want access to the flying, get on with the merger. Simple. If they want to be marginalized and reduced to a four or five aircraft business unit with no flying other than minor Japan rights that go with the Polar certificate, then keep behaving the same way.

Like it or not, the company is going to merge the two pilot groups. If I were a pilot in the 50% smaller (actually way more than 50%) group, I would certainly be asking my MEC what the heck they thought they were doing. Wouldn't it be better for all of us to have access to all of the flying? To have an industry leading contract? To have a profitable company that focused on business instead of putting out the fires created by a recalcitrant pilot group?

The average Polar pilot should ask himself what benefit he personally gets out of the continued roadblocks to this merger. I think you will find the answer in the latest announcement by the company.

OTOH, Atlas has done their share of offloading lucrative contracts to other airlines... They have lost a contract to Southern because the Atlas mismanagers insulted a KAL bigwig, are dry leasing an airplane (with maybe another one going) to Tradewinds, and have sold airplanes to Focus and other competitors who have taken markets Atlas previously served (mostly profitably). There is no end to the amazing BS mismanagement will pull to maximize short-term profits and put a better spin on their press releases.

On a semi-related note, look at how Delta and Northwest mismanagers are doing their best to portray the pilot groups as the ones who are torpedoing the merger that a few execs cooked up in a week or 2. Only if you read HARD between the lines will you find that (1) regulatory approval will be questionable at best; and (2) the "principles" of the alleged merger that were announced by the execs have not come to any firm agreement even between the boardrooms!

This type of management is cyclic, i.e., nothing new. I remember Flying Tigers subbing work to Evergreen and Southern, Evergreen subbing work to Connie and Polar, World subbing to Atlas and Polar, UPS subbing out to all of them, and so on. These guys all went to the same business schools and talk to each other all the time. It's all about maximizing revenues. It could be worse, they could shift our flying to regional jets like the scheds did.

Actually I am surprized that DHL is doing anythiing at all. They lost 900 million last year; Merrill Lynch and Morgan Stanley both pushed to shut down the U.S. operations but the new boss decided to downsize. I wonder where all this supposed lift is going and how long it will last. With economy dropping as fast as it is the old adage "when the US gets a cold the world gets pneumonia" is going to kick in sometime.

"Actually I am surprized that DHL is doing anythiing at all. They lost 900 million last year"

That is true, however the majority of the losses were in the domestic express small package/document business where they compete head on with Fedex/UPS using a plethora of subcontractors. The DHL freight forwarding operation that used to be Danzas, AEI and several other bought out and amalgamated forwarders caters to the heavylift bulk market. I think that division is profitable and has capacity to fill some 74`s. I would guess that even if they pulled out of the domestic package business there would still be a freight forwarding operation and associated lift.

The real loser here might be NWA. I wonder if their 747 cargo division can stand to lose the DHL freight.

As flite idol pointed out, most of those assessments are based on the ground segment of their freight market. AFAIK, DHL is still pushing forward to complete their air links around the northern hemisphere. Once that is complete, maybe their US ground ops will take off again...

Bottom line to the connection
DHL freight
Polar Contract
Atlas flying it

Layinlow - even tho you work for FedEx now, I will answer your obvious wind up.

Freight is consigned to DHL (owned by another person)
DHL contracts with AAWH to provide the lift.
AAWH selects one of its business units to do the job.
Freight goes to addressee on way-bill

Just like the current Polar guys, you seem to think that anything Polar touches is "theirs." This adolescent thought process and their associated tantrums are what created this situation for them in the first place. Perhaps they will be so pissed off at the company that they will turn in their wings too?

I can see it now - Robbobbin in his uniform standing at attention outside Cato's door with his wings in his hand....

Or perhaps he will try to shake Cato's hand and poke him with the pin like he did with Prater. Assault by union pin. :D

All very childish. It is time to grow up and join the real world. Otherwise we will be singing folk songs about the "brave" Polar pilots who are long remembered but no longer with us.

"A dragon lives forever but not so little boys
Painted wings and giant rings make way for other toys."

Unfortunately the future of USA /world competition dictates consolidation. That is, consolidation industry wide and in all sectors. Whale FR8, Belowmins, and others do have valid points.

What to do with those stubborn non-accepting Polar pilots thumbing their nose at the lions den while facing extinction? Make folk heroes out of them?

Please read this http://www.sec.gov/Archives/edgar/da...085exv10w3.htm prior to saying PACWW has no assets.

Have a good one

flite idol

I thought you might like this little tidbit that concerns your posting about what DHL is giving up. It is way more than you might think. Fed Ex expects to pick up 35% of the DHL air freight and 25% of the ground freight. UPS is expecting to pick up 25% of the ground freight; as for the rest of the routes, I cannot say but DHL is going "lean and mean" (their words). It had been rumored that Fed Ex was going to buy out DHL but they decided because of the anti-trust problems it would be better just to let them die on the vine and pick up the pieces. That is what is being done. Both Fed Ex and UPS are going to profit over this. So, I wonder where this leaves the DHL/Polar situation as Fed Ex has already increased the Japan, Asia, US frequencies.

Thats interesting Layinlow. I guess time will tell but there will be changes in the US market for sure.

If you take into account the staggering losses from the US market it's hard to image layinlow being anything but RIGHT. The management team under the new CEO's leadership (Frank Appel) however are stating they are fully committed the US market. Read these:
http://www.cargonewsasia.com/secured...&article=15764

http://www.euro2day.gr/articlesfna/60501213/

https://www.cep-research.com/ceprese...ws_070308.html

Just to let you know. The information that I passed along is not rumor or innuendo but based on statements made by the respective companies. The economy is definitely slowing down and as they say, when the US gets a cold, the world gets pneumonia, at least when it comes to economies. I am old enough to have been through this stuff before, fortuantely working overseas. Aviation historically is always the last to show the effects of a slowing or rising economy.
As the the Polar/Atlas/DHL connection? Who knows but I am not getting warm fuzzies.

Non returnable Deposit
 

DHL have already paid $150 million (non-returnable) for a stake in PAWH and just signed 3 year contracts for 2 400's ILN ANC HKG ANC ILN.
If I read the articles correctly, the problem is with DHL Domestic US ( ABX, AStar ), not international.

A simpler way to put it, FedEx's cash cow is the US domestic, same with UPS. DHL it is intrenational market..
FedEx and UPS have been competing against DHL for years. In the last several years DHL had gotten serious in the US. The fight has been tougher.

PAWH
 

EJetCA,
the link you give is a partial copy of the Flight Service Agreement between THE COMPANY (PAWH) and Atlas Air Inc. To précis,
With regard to the Block Space Agreement (BSA), the Company will utilize six 400F and one 200F and any extra aircraft will come from Atlas Air Inc utilizing Atlas crews. After the SCBA is agreed, all crews will be from Atlas Air Inc. Atlas Air Inc will pay all CMI expenses.
It doesn't mention PAWH owning anything.

We all need to start focussing on the future and making sure, as a collective group our SCBA is industry leading with the AABO bunch stapled to the bottom as FO's.

After looking at the scheduled DHL flights that are to be performed by Atlas for DHL. Will the remaining Polar flights be used only to support more of the block space agreement with DHL? The closing of all the Polar lower 48 crew bases and opening of only the ANC base for Polar seems to dictate that? Will Polar eventually only be carrying DHL and/or the little cargo the current fly?

Habster
FYI you are a bit behind the power curve there good buddy. Fed Ex is heavy into the international market and have purchased companies in Europe, India, Japan, and China. They are moving aggressively into Europe and with 20 757's heading to CDG, and another bundle to China pretty much says it all. Not to mention the 16 777's.
As to layinlow's assessment, he is about right on. The industry is going to go into one of their troughs pretty soon and a lot of ACMI and bottom feeders are going to hit a serious wall. Only those with serious capital to keep it going during this period will prevail. Just look at the history.

>DHL have already paid $150 million (non-returnable) for a stake in PAWH and just signed 3 year contracts for 2 400's ILN ANC HKG ANC ILN.
If I read the articles correctly, the problem is with DHL Domestic US ( ABX, AStar ), not international.<

Actually, the problem stateside is with ground operations. Not the air side.

Stateside Problem
 

I don't know about other places but 3 years ago in my hometown there were no yellow and red trucks to be seen. Now they are everywhere. It costs mega bucks to set up that kind of infrastructure and run it but it's the only way to take on UPS & FEDEX. Plus it was all setup on a strong Euro, taking advantage of the dollar's weakness.

I don't know why Fed Ex and UPS would announce that they're collectively picking up 60% of DHL's flying (Fed Ex 35%, UPS 25%) if all DHL was planning is to reduce the ground operatons.

Trash,

Perhaps you would be so kind as to post a link to the news service where you read this from? My news servers don't have that. I therefore doubt Purple or Brown have announced anything such as you said in your post.

Commercial Appeal March 7th
Front page of the business section bottom article. If I could scan and put it on this site I would.

Here is the article I believe you are referring to. No such announcement. Just speculation on how much Purple and Brown might pick up. Mar. 6 Commercial Appeal business section:

FedEx, UPS look to gain if DHL scales back
By Jane Roberts (Contact)
Thursday, March 6, 2008

Analysts expect money-losing DHL will scale back in the United States and could make the announcement as early as today, handing FedEx Corp. and UPS a boon.

If DHL closes terminals and hubs, analysts say FedEx could get 35 percent of the lost business in the air and another 25 percent on the ground.

If the restructuring costs DHL 2 percent of revenue, FedEx stands to gain $45 million in business, according to a research note published Wednesday by Edward Wolfe. UPS, which has a more powerful ground network, stands to realize $71 million.

In 2004, DHL advertising envisioned head-to-head competition with FedEx in the United State. Today the company may announce it is scaling back its U.S. operations by closing hubs and terminals, which would give a boost to FedEx and UPS.

DHL, a subsidiary of Deutsche Post World Net, is the fourth-largest player in the U.S. overnight package business, with revenues in the Americas for 2008 estimated at $2.3 billion.

With 9 percent market share, DHL trails the U.S. Postal Service, (32 percent) FedEx (31 percent) and UPS (25 percent).

DHL joined the competitive U.S. overnight business in 2003 when it purchased Airborne Freight for about $1 billion, rankling FedEx and UPS, which accused the monopoly Deutsche Post of investing in a U.S. carrier to fight them on their own turf.

Both pressed the issue in lawsuits, which Airborne eventually won.

Airborne was the low-cost alternative to the big players, claiming about 10 percent of the domestic air express market and 2 percent on the ground.

DHL came in promising a threat to the established carriers, but in reality has kicked little sand in their faces, mostly because it has made a series of integration and operational errors that shook customer confidence.

Analysts estimate DHL has lost $2.8 billion in North America, including a recent $748 million write-down in the United States alone, where it has also announced 600 layoffs.

Wolfe expects DHL will close 85 small ground and air terminals -- as much as 25 percent of its U.S. capacity -- to stem the losses.

Satish Jindel, principal transportation analyst at SJ Consulting in Pittsburgh, says DHL will keep the U.S. markets it needs to protect the interests of global customers.

"I expect they will partner with other companies to handle business with smaller U.S. markets," he said.

Tuesday, Deutsche Post said it planned to split its logistics division into two divisions with separate executive boards. A second announcement could come today when Deutsche Post meets with analysts in Bonn, Germany.

Many analysts, including Wolfe, expect a more detailed plan will emerge in April or May when a DHL Teamsters contract will be ratified.

"DHL is in a tough position because if its customers believe there's even a chance it will leave the U.S., its competitive position will be compromised," Wolfe said. "At this point, we expect modest restructuring efforts will be announced March 6 ... with more restructuring to come."

For months, the buzz has been that FedEx or UPS was planning to buy the U.S. assets. That seems unlikely, based on antitrust issues, experts say.

"I think the antitrust people would not look too kindly on it," said Aaron Gellman, professor at the Transportation Center at Northwestern University. "It would be good enough if DHL just disappeared from a competitive standpoint."

Most doubt that will happen. Instead, analysts expect the deeply entrenched DHL will take time to retool and rise again.

"The burden of proof is always on anyone who suspects DHL doesn't have good strategy," said Paul Stewart, chief executive of 4-Elements Inc., a third-party logistics company headquartered in Arkansas. "They are a proven worldwide logistics organization."

Contact Jane Roberts at 529-2512.



http://www.commercialappeal.com/news...sed-to-profit/

Not exactly the same article I read but close enough. Fed Ex and UPS are the 5000 lb gorillas of freight and are not going to cede it easily

That article hvydriver was a few days prior to the one I mentioned. The headline of the item I read was Fed Ex and UPS" to profit from DHL or something close to that.
Both of the carriers have stated their loads are off quite a bit from projections. Fed Ex is better positioned because of the growing foreign markets. They bought a company (ground and air) in China, India and two in Europe. This offsets the declines in the U.S. market. Fed Ex still considers itself a growing airline and with the arrival of the 757's this year and 777's next year, the increased movement into the European markets, the expanding of the Asia market, well, you can do the math. The start of this conversation was the doubts about DHL's connection to Polar with the expected decline of their U.S. presence, (not he plans of Fed Ex or UPS). Those doubts are still there.

>I don't know why Fed Ex and UPS would announce that they're collectively picking up 60% of DHL's flying (Fed Ex 35%, UPS 25%) if all DHL was planning is to reduce the ground operatons.<

This is where I got confused I suppose then. Your statement here implies that there is a news article stating that Purple and Brown are picking up 60% of DHL's US operations. Myself, I don't think that's happening. everyone has an opinion of course, but your statement implies fact.

>Commercial Appeal March 7th. Front page of the business section bottom article. If I could scan and put it on this site I would.<

I went to the Appeal myself and cut and pasted the article in about 15 seconds. That's the only article that was in the business section that was close to what you were talking about in both subject and date that I saw.
Here are the search results for the Commercial Appeal:

http://www.commercialappeal.com/sear...=17&image.y=18

"FedEx, UPS look to gain if DHL scales back" is the article I posted.

Point in fact, your surmise is incorrect if you go back and look at the origination of the thread. Sounds like more shrinkage at Polar Air Cargo since they have little to show for profit outside the DHL deal that is basically flown by Atlas now. Typical upstreaming of funds to the holding company. I would normally have had a lot of problems with this, but the Polar MEC actions of the past have swayed my opinion on this.

It is now a who is going to screw who first first starting back in 2000 with Polar.

PO/5Y threads in general
 

You have probably noticed that quite a few posts on this thread (and others) have been deleted. Some of you have even written to me about it.

After consulting some Mod colleagues & higher ups, I've decided that enough is enough. The back-biting, viciousness, vilification and if I may say so, general airing of dirty washing are no longer welcome here. The signal to noise ratio has become exclusively noise. Should you feel the need to continue, please find another forum. ALPA for example, or make your own.

This thread is of interest to all of us in the market; keep it on topic & it will stay.

Thank you for your time.