Unions representing TNT Airways workers have been “reassured” by management pledges over thefuture of the Liege-based airline after UPS’ planned acquisition of TNT Express even though Cologne
will be the long-term major European air hub of the enlarged company.TNT Airways appears likely to be sold to an EU-based company in order to comply with laws onforeign ownership of EU airlines and would then operate flights to and from Liege on behalf of UPSas a sub-contractor, similar to UPS’ current arrangements for intra-EU flights at its Cologne hub,observers believe.
TNT Express managers met with union officials at Liege yesterday to explain plans for theairline, and the need to change ownership of the airline. In their merger agreement, UPS and TNTsaid that “a legal, organisational and management structure” for the airline that complied with allrelevant laws was needed by the time the deal was closed, which is expected to be in the June –September third quarter of this year.
Yannick Docquier, from the CSC Transcom union, told Belgian news agency Belga after the meetingthat he had been reassured. “It is not a question of UPS selling TNT Airways but of changing theownership to respect European legislation. That is purely legal. We are reassured since nothingwill change at the level of staffing, operations and practical working. TNT Airways is acompetitive company and will undoubtedly find a European owner. It will have UPS as a client, whichis TNT Express at present,” he stated.
Meanwhile, the minister in charge of airport operators in the Wallonia region of Belgium, AndréAntoine, told the regional parliament yesterday that TNT Express has a contract to use LiegeAirport until 2036. TNT’s original 20-year agreement for the Liege hub, signed in 1998, wasextended to a new 30-year agreement in 2006, he explained.
TNT Express spokesman Ernst Moeksis told CEP-Research: “For the immediate future, UPS recognisesthat it cannot have majority ownership or effective control of TNT Airways. Therefore, UPS and TNTare currently working towards a legal solution to ensure continuation of TNT Airways’ existingoperations upon completion of the merger.”
UPS already uses sub-contractors for the majority of its intra-EU flights, includingDanish-based Star Air, a subsidiary of shipping group Maersk, which now has a fleet of 11 B767freighters. “We use several sub-contractors in Europe,” confirmed Anton Van der Lande, spokesmanfor UPS Europe. US routes and some intra-EU routes are operated by UPS under bilateral airagreements, however.
With sorting capacity to be expanded to 190,000 packages an hour by end-2013, the Cologne hub issignificantly larger than TNT’s Liege facility, which can sort 90,000 parcels a night. “Over timeCologne will be the main hub for air express,” Van der Lande added. UPS operates a total of 221daily flight segments in Europe, serving 55 European airports, including 38 daily departures fromCologne.
TNT Express has already embarked on a restructuring of its air operations in order to reduceoperating costs. This includes downsizing the fleet by eliminating 10-12 aircraft from the45-strong intra-European fleet and halving the size of the intercontinental fleet, which currentlyconsists of two B747Fs and two B777Fs. In early March TNT announced a code-share, capacity-sharingagreement with Emirates Sky Cargo for its B777 flights to Hong Kong and New York.
