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Saturday, July 14, 2001

FedEx wants to halt DHL's Mexico permit




By James Pilcher
The Cincinnati Enquirer

        Federal Express and DHL are at it again.

        The Memphis-based overnight giant has asked the U.S. Department of Transportation to hold up renewal of DHL Airways Inc.'s operational certificate to Mexico, which is set to expire Jan. 1.

        DHL Airways, which handles the freight for Brussels-based DHL WorldWide Express, also hasasked to expand the certification to be able to fly between any cities in the two countries. ?

        The petition, filed Wednesday, is another in an attempt to ground Erlanger-based DHL Airways. The company, along with DHL Worldwide Express, operates its U.S. hub at the Cincinnati/Northern Kentucky International Airport, where the two companies employ 1,900 workers.

        FedEx has long argued the company was in violation of U.S. law that limits foreign ownership of a domestic airline to 25 percent.

        The company says DHL, the air freight market leader internationally but a minor player domestically, is using foreign funds from its owner, Deutsche Post, to expand in the United States. Deutsche Post runs the German mail system.

        In May, the Transportation Department denied a request by FedEx and Atlanta-based UPS to ground DHL on the ownership issue, but transportation officials vowed to continue an informal review of the situation.

        Previous filings “have raised substantial questions as to whether DHL Airways Inc. is under the control of foreign nationals,” according to the petition. It further stated DHL has provided no evidence it is in compliance with the regulations.

        According to DHL Airways, it meets all federal ownership standards in its renewal application, having recently restructured the airline and appointed new management based in Chicago.

        “This is becoming business as usual, with the competition taking the opportunity of any filing to oppose normal steps,” DHL spokeswoman Tracy Egan said.

        Transportation officials would not say when a ruling could be issued but said they wanted a decision as soon as possible.

       



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