ABX Air

ABX Air

http://www.abxair.com/

ABX Air, Inc.

OST-2003-15863

Served August 6, 2003

Notice, the Department directs ABX to file in this docket within 7 calendar days (August 15, 2003), a copy of the public material that it submitted to the Department on July 15 with its notice of substantial change. Public comments on the procedures will be due within 21 days thereafter (September 5, 2003).

On July 15, 2003, ABX Air, Inc. filed a notice with the Department under section 204.5 of our rules (14 CFR 204.5) reporting a substantial change in its ownership and operations. According to the notice, the ground operations of Airborne, Inc., ABX's parent, would be sold to DHL Worldwide Express B.V., and merged into a subsidiary of that company, Atlantis Licensing Corporation d/b/a DHL Express ("DHL Express"). ABX would be separated from Airborne, becoming an independent public company wholly owned by Airborne's stockholders at the time of the separation. ABX also reported that it would enter into various commercial agreements with the new DHL Express, including an Aircraft, Crew, Maintenance, and Insurance (ACMI) services agreement, a hub and line-haul services agreement, a transition services agreement, and a sublease for space at the Wilmington Air Park. In addition, DHL Holdings (USA), Inc., will make a loan to ABX and will provide performance guarantees for DHL Express' obligations under the ACMI and hub and line-haul services agreements.

This is to advise the Air Carrier Fitness Division that on August 14, 2003 at approximately 10:20 PDT (1:20 EDT), Airborne, Inc. announced that its shareholders had approved the separation of ABX Air, Inc., pursuant to which ABX will become an independent company, wholly and directly owned by Airborne's stockholders at the time of the separation. In addition, the shareholders approved the acquisition of Airborne (minus ABX) by Atlantis Acquisition Corporation, a wholly owned indirect subsidiary of DHL Worldwide Express B.V. . As communicated to your office yesterday, of the: 30.9 million votes cast, 88.4% were in favor of the transaction and related proposals. The transaction is described more fully in the materials delivered to the Department on July 14th in connection with the Section 204.5 Notice of Substantial Change for ABX.

A review process similar to that used in carrier selection proceedings for limited-entry route authorities would impede the free flow of information, open up the notifying carrier's confidential information and plans to opponents and subject it to one-way attacks, and severely restrict - if not effectively preclude - ongoing discussions between the Department and the notifying carrier about the substantial change and resolution of any issues related thereto. Clearly, such a process is inimical to the process and objectives of continuing fitness reviews.

Counsel: Silverberg, Goldman, Robert Silverberg, 202-944-3300 / O'Melveny Myers, Donald Bliss, 202-383-5300

ABX’s independence going forward is rooted in the past. ABX, like ASTAR, is a former in-house airline, now claiming to be independent of its former control relationship. The “controller” is now foreign-owned, still supplying 98% of ABX’s business. ABX investors have already been warned that a significant reduction in the scope of services under the ACMI agreement “would have a material adverse effect” on ABX’s results.26 It is now up to the Department to determine in an open and transparent manner whether the separation of these sister companies will create a company that is able to operate independently.

UPS appreciates the opportunity to provide its views on an appropriate means of conducting an inquiry into the citizenship of ABX, and particularly appreciates the Department's recognition of the need for transparency in complex citizenship cases. UPS continues to believe that nothing is gained by an across-the-board decision to exclude such matters from formal, public view. A more-particularized approach that reserves formal adjudication process for situations in which the applicant's full submissions indicate such a need appears to be the most effective and efficient course.

ASTAR and its predecessor Airways have been the target of numerous DOT filings in dockets opened by FedEx and UPS over a period of years, frivolously challenging the DOT's determinations of citizenship and fitness over and over again. The FedEx and UPS petitions were not motivated by altruism or patriotism, but rather by their desire to drive ASTAR out of the marketplace.

Because these petitions lacked merit, DOT rejected them, repeatedly upholding its own determination that Airways was a citizen. Undeterred, FedEx and LIPS were able ultimately to force an adjudicatory hearing, which is ongoing, regarding Airways' and now ASTAR's citizenship. As a result, ASTAR has been compelled to undergo the significant burden of adversarial litigation and discovery to demonstrate -- as was already done by Airways -- that it is, indeed, a citizen of the United States. As set forth in the next section, none of this drain on DOT's resources will have served any public interest, but rather will have simply advanced FedEx's and UPS's goal of making life very difficult for any company that has the temerity to compete with them.

Supplement of United Parcel Service Co. to comments previously submitted to bring to the Department's attention newly available information relating to the Airborne Express ground operations serviced by ABX that materially changes both the scope and complexity of the issues to be reviewed in this proceeding.

With the announced integration and the establishment of the "New DHL" as successor to Airborne Express, ABX will be serving a different and much larger Germanowned enterprise than at the time this proceeding was instituted. Through its ACMI contract, the ABX fleet of some 116 U.S. registered aircraft will now be dedicated to, and become an integral part of, the Deutsche Post-owned DHL Worldwide Network. Virtually all of ABX's revenues will come from this vast German-owned aggregation of express and forwarder companies. While it remains to be seen how, and to what extent, ABX's provision of its 116 U.S. registered aircraft will be coordinated with the 38 U.S. registered aircraft now also being supplied under an ACMI agreement to DHL by ASTAR Air Cargo, Inc. (formerly DHL Airways, Inc.), the two companies combined could (assuming no further fleet growth) offer some 154 U.S. registered large jet all-cargo aircraft for exclusive use by the Deutsche Post in offering commercial air transportation services between points solely within the United States.

OST-2003-15863 - Notice of Substantial Change in Ownsership Filed Under 14 CFR 204.5

Hereby moves to withhold from public disclosure (i) certain information in Exhibits ABX-S-12 (an ACMI agreement), ABX-S-14 (a Hub and Line-Haul Services agreement), and ABX-S-20 (a Master Separation Agreement), and (ii) Exhibit ABX-S-24, a list of agreements with non-DHL entities for the provision of services. These Exhibits are being provided to the Department as part of ABX's submission of updated fitness information.

Counsel: ABX and O'Melveny & Myers, Donald Bliss, 202-383-5300, dbliss@omm.com

The updated fitness information consists of an explanatory cover letter from W. Joseph Payne, Vice President, General Counsel & Secretary of ABX, as well as 26 exhibits, numbered Exhibits ABX‑S‑0 through ABX‑S‑25.

Counsel: ABX and O'Melveny & Myers, Donald Bliss, 202-383-5300, dbliss@omm.com

ABX proposes to operate cargo flights in the U.S-Colombia market. Initially operations will be conducted between Miami, Florida and Bogota, Colombia. ABX will transport general freight and cargo. The carrier currently operates domestic and international cargo flights on a scheduled and charter basis, with its fleet of 28 Boeing 767, 15 DC-8 and 72 DC-9 aircraft.

Expeditious action on this application is requested to enable the carrier to start up the proposed service by August 1, 2005 or as soon thereafter as ABX can obtain all necessary approvals.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com

ABX Air, Inc. hereby requests expedited consideration of the ABX Application for an Exemption filed in the above-referenced Docket on July 8, 2005. The 15-day period for filing answers to the Application provided for by Rule 307 of the Department's Rules of Practice (14 C,F,R, § 302,307) has expired and no answers were filed. In addition, counsel for ABX has polled each of the carriers served with the Application and all but Federal Express advised counsel that they have no objection to the Application. Accordingly, counsel for ABX requests expedited consideration of the Application to enable the carrier to institute the U.S.-Colombia cargo service described therein as soon as possible.

Exemption for two years pursuant to 49 U.S.C. §40109 to provide scheduled foreign air transportation of property and mail between a point or points in the United States via intermediate points to a point or points in Colombia and beyond to points in the Western Hemisphere.

OST-2005-22552 - Certificate of Public Convenience and Necessity - Foreign Air Transportation of Cargo and Mail

Pursuant to 49 U.S.C. § 41102, Part 201 and Subpart B of Part 302 of the DOT's Rules of Practice, ABX Air, Inc. hereby requests issuance of a certificate of public convenience and necessity authorizing ABX to engage in scheduled foreign air transportation of property and mail between any point or points in the United States and any point in the countries listed in Appendix A to this application.

ABX also requests authority to integrate this certificate authority with all services ABX is otherwise authorized to conduct pursuant to its existing exemption and certificate authority and consistent with applicable agreements between the U.S. arid foreign countries.

This ABX application conforms to the scope of the authority granted other all-cargo carriers by Order 1999-12-7, October 13, 1999, and subsequent authority granted by Order 2004-5-23, or is otherwise consistent with the Open Skies air sevices agreements between the United States and the foreign countires.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3304, rsilverberg@sgbdc.com

By this order we tentatively find that it is in the public interest to grant to each air carrier in the above-captioned proceeding the blanket route integration certificate attached as Appendix A to this order.

In response to the Notice, we received more than 20 submissions to the Docket from U.S. carriers seeking blanket route integration authority. The applicants of record are listed above, in the caption for this proceeding. For the most part, the carriers requesting such authority urged us to grant it in the broadest possible terms so that it would encompass prospective or future awards of authorities, as well as all currently held authority, and would be valid for an indefinite period or, alternatively, the longest possible duration, as opposed to the five-year term described in the Notice.

We have tentatively decided to grant to each applicant of record a blanket route integration certificate covering all of its current and prospective international route authorities. We tentatively find that the award of such authority, with the enhanced operational flexibility and administrative convenience it would accord to the holder, is consistent with the public convenience and necessity. The authority would be subject to standard route integration and certificate conditions, and such other conditions as the Department may establish. The certificate would be awarded for a five-year duration and open to renewal. Consistent with the Notice, we will use a self-executing final order (Appendix B) to issue to each applicant of record an initial five-year blanket route integration certificate of public convenience and necessity in the form attached as Appendix A, assuming no objections and upon completion of the 49 U.S.C. § 41307 Presidential review.

We have considered requests that we issue longer term or even indefinite route integration authority. However, we tentatively find that it would be more reasonable in the circumstances presented to award the authority for an appropriate and suitably limited length of time to give us the opportunity to review our streamlining approach to blanket route integration authority before renewing it. We tentatively regard five years as the appropriate length of time for this purpose.

We note that some applicants of record may have previously submitted applications requesting route integration authority, among other things. To the extent superseded by the action taken here, we will deem those portions of pending applications as moot, as Department action on them would be duplicative and narrower in scope than the blanket route integration authority we intend to issue, and we will deem all such requests to have been dismissed without prejudice.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com

ABX Air, Inc. hereby requests the Department of Transportation disclaim jurisdiction over the transfer of the certificates of public convenience and necessity and other operating authority issued to ABX to facilitate the formation by ABX of a holding company. Once the reorganization is completed, ABX will be the wholly-owned subsidiary of ABX Holdings, Inc. ABX hopes to complete the formation of the holding company to coincide with its annual stockholders' meeting scheduled for May 9, 2007. Accordingly, ABX respectfully requests that the Department issue the necessary disclaimer of jurisdiction on or before May 8, 2007. To this end, counsel for ABX intends to poll each of the parties listed on the attached certificate of service and report the results to the Department as soon as possible to enable DOT to act promptly on this request.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3304, rsilverberg@sgbdc.com

Counsel for ABX Air, Inc. has polled each of the carriers served with the Application of ABX Air, Inc. for a Disclaimer of Jurisdiction filed in the above-referenced Docket on April 27, 2007 and hereby reports that the Application is unopposed. Accordingly, ABX respectfully requests that the Department act on the Application on or before May 8, 2007 so that ABX may announce the receipt of DOT approval of its corporate reorganization at its annual stockholders' meeting to be held on May 9, 2007.

We have examined the information provided by ABX in support of its request for a disclaimer of jurisdiction and conclude that the corporate reorganization proposed by ABX is not a transfer within the meaning of section 41105 of the Transportation Code. In reaching this conclusion, we find that the proposed corporate reorganization will have no effect on the ownership, control, management, citizenship, financial condition, or operations of the air carrier. Therefore, in light of the foregoing, we have decided to grant ABX’s request for a disclaimer of jurisdiction over the proposed reorganization of ABX. We orally advised ABX of this decision on May 25, 2007.

ABX Air, Inc. hereby requests renewal of its exemption authority granted by Notice of Action Taken, dated August 9, 2005, which perrnits ABX to engage in scheduled forei air transportation of property andmail between a point or points in the United States via intermediate points to a point or points in Colombia and beyond to points in the estern Hemisphere. The exemption authority is set to expire on August 9, 2007.

ABX respectfully requests that the Department act on this request as expeditiously as possible so as to renew the exemption authority before its expiration on August 9, 2007. ABX requests this authority be renewed for an additional period of two years.

Although ABX is not currently utilizing its U.S.-Colombia scheduled service exemption authority, it remains extremely interested in doing so when market conditions will support such operations. Renewal of ABX's U.S .-Colombia exemption authority will provide the carrier with the flexibility to promptly implement service in the market and meet the demands of the shipping public at the appropriate time.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com

Renewal of scheduled foreign air transportation of property, and mail between points in the United States and points in Colombia and beyond to points in the Western Hemisphere.

ABX’s renewal application was not timely filed under the terms of 14 CFR 377.10 (c). In the circumstances presented, including the absence of opposition to ABX’s application, we will grant the carrier a waiver of the advance filing requirement.

ABX hereby requests an exemption and designation permitting it to engage in scheduled foreign air transportation of property and mail between Los Angeles and Guadalajara. This application is being submitted in response to the Department's September 12th Notice inviting applications from U.S. carriers for exemption authority in connection with the additional designations that become available on October 26, 2007 under the U.S.-Mexico Air Transport Agreement for services between the U.S. and Guadalajara and Monterrey. As noted, ABX is also filing today a separate application with the Department for authority to provide scheduled foreign air transportation of property and mail between Los Angeles and Mexico City. a designation for which is now available under the U.S.-Mexico Air Transport Agreement due to the recent decision of Florida West International Airways. Inc. to forgo its effort to institute scheduled service between the U.S. and Mexico and return the authority to the DOT for reallocation. See letter from Charles F. Donley, dated September 13, 2007. tiled in Dockets OST-2005-22151 and OST-2006-24671.

ABX intends to commence scheduled all-cargo service between Los Angeles and Guadalajara within 90 days of its receipt of authority from the Department to conduct such operations, or as soon as it is able to obtain authority from the Mexican Government to conduct scheduled all-cargo operations.

ABX intends to operate between Los Angeles and Mexico seven days per week on a year-round basis (with 5 weekly operations between Los Angeles and Guadalajara or greater as demand warrants). ABX may, however, reduce its operations to Mexico to six days per week during periods of' low demand.

ABX will use Boeing 767-200SF freighter aircraft to conduct the operations set forth in Exhibit 1 . The aircraft that ABX will use for these operations is already in the ABX fleet as it is the same aircraft with which ABX currently conducts its charter operations on behalf of Aeromexpress.

ABX has been operating all-cargo charter flights between Los Angeles and Guadalajara and Mexico City under a charter agreement with Aeromexpress. S.A. de C.V., a foreign air freight forwarder since September 2006. ABX now desires to operate similar service on a scheduled basis.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com

ABX hereby requests an exemption and designation permitting it to engage in scheduled foreign air transportation of property and mail between Los Angeles and Mexico City.

ABX understands that five carriers are currently designated to provide scheduled all-cargo service to Mexico City (Amerijet, UPS, ASTAR Air Cargo, Centurion Air Cargo and FWIA) and that three carriers (ASTAR, Centurion and FWIA) are currently designated to provide scheduled all-cargo service in the Los Angeles-Mexico City city-pair market. However, by letter dated September 13, 2007, counsel for FWIA advised the Department that FWIA was foregoing its effort to institute scheduled all-cargo service between the US and Mexico and that it was returning its authority to provide such service to the DOT for reallocation (See letter from Charles F. Donley, dated September 13, 2007, filed in Dockets OST-2005-22151 and OST-2006-24671). This decision by FWIA makes available one designation for a US carrier.

ABX intends to commence scheduled all-cargo service between Los Angeles and Mexico City within 90 days of its receipt of authority from the Department to conduct such operations. or as soon as it is able to obtain authority from the Mexican Government to conduct scheduled all-cargo operations.

ABX intends to operate between Los Angeles and Mexico City seven days per week on a year-round basis. ABX may, however, reduce its operations to Mexico City to six days per week during periods of low demand.

ABX will use Booing 767-200SF freighter aircraft to conduct the operations set forth in Exhibit 1 . The aircraft that ABX will use for these operations is already in the ABX fleet as it is the same aircraft with which ABX currently conducts its charter operations on behalf of Aeromexpress.

ABX has been operating all-cargo charter flights between Los Angeles and Mexico City and Guadalajara under a charter agreement with Aeromexpress. S.A. de C.V., a foreign air freight forwarder since September 2006. ABX now desires to operate similar service on a scheduled basis.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com

OST-2007-29318 - Exemption - Los Angeles-Guadalajara All-Cargo
OST-2007-29319 - Exemption - Los Angeles-Mexico City All-Cargo

ABX attached a proposed flight schedule to each application showing a Los Angeles-Guadalajara/Mexico City service with stops in both Guadalajara and Mexico City and service to points beyond. ABX notes that it would not carry local traffic between Guadalajara and Mexico City and that the United States has "open-skies" aviation agreements with all of the countries to which it proposes beyond service.

ABX Air, Inc. hereby requests an exemption from the terms of 49 U.S.C. 41101 and the Department's rules to the extent necessary to permit it to conduct all-cargo scheduled foreign air transportation between a point or points in the Eastern Zone of the United States, as defined in the U.S.-Venezuela Air Transport Agreement, as amended, and Maracaibo and Valencia in Venezuela. ABX requests this authority be effective for a minimum two-year period.

See Order 1989-3-30 and Order 2007-7-4. The carrier currently operates domestic and international cargo flights on a scheduled and charter basis, with its fleet of 40 Boeing 767, 2 DC-8, and 57 DC-9 aircraft.

ABX proposes to operate cargo flights in the U.S.-Venezuela market. Initially operations will be conducted between Miami, Florida and Maracaibo and Valencia, Venezuela. ABX will transport general freight and cargo.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com

We have decided to grant the Joint Applicants' request for an exemption from the provisions of section 41105 until we have ruled on the de facto transfer request. The Joint Applicants correctly noted that our grant of exemptions in cases such as this is contingent upon the carriers involved, in this case ABX, CCIA, and ATI remaining separate and independently operated corporations until a ruling has been made in the underlying defacto transfer case. In this case, as in previous cases, we see no reason to withhold exemption authority pending Departmental action on the certificate transfer application. As long as ABX, CCIA, and ATI remain separate entities, should we disapprove the proposed transfer, either in whole or in part, ABX Holdings could divest itself of CCIA and ATI. The Joint Applicants should not construe our grant of this exemption as a decision to approve the related defacto transfer application or any aspect of that application

Exemption authority for two years under 49 U.S.C. 40109 to provide: Scheduled foreign air transportation of property and mail between a point or points in the Eastern Zone of the United States, as defined in the U.S.-Venezuela Air Transport Agreement, as amended, and Maracaibo and Valencia, Venezuela.

ABX hereby requests an exemption to permit it to conduct scheduled all-cargo foreign air transportation between a point or points in the United States, via intermediate points, and La Paz, Oruro, Cochabamba, Sucre, Santa Cruz, Robore, and Puerto Suarez, Bolivia, and beyond. ABX requests this authority be effective for a minimum two-year period.

ABX proposes to operate cargo flights in the US-Bolivia market. Initially operations will be conducted between Miami, Florida and Santa Cruz, Bolivia and beyond. ABX will transport general freight and cargo.

By Order 2007-6-18 the DOT disclaimed jurisdiction over the corporate re-organization that resulted in the creation of ABX Holdings, Inc., of which ABX Air, Inc., became a wholly-owned subsidiary.

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com

Counsel for ABX Air, Inc. has polled each of the carriers served with the Application of ABX Air, Inc. for an Exemption filed in the above-referenced Docket on January 14, 2008 and hereby reports that the Application is unopposed. In the absence of any objection, ABX urges the Department to act promptly on the Application.

Scheduled foreign air transportation of property and mail between a point or points in the United States, via intermediate points, and La Paz, Oruro, Cochabamba, Sucre, Santa Cruz, Roboré, and Puerto Suárez, Bolivia, and beyond.