TNT Express, one of four integrated express delivery companies operating around the world, announced Friday it will sell in-house airline TNT Airways and Pan Air Lineas Areas SA to ASL Aviation Group on the condition that European Union regulators approve TNT's sale to rival UPS.
UPS offered last spring to buy TNT for $6.5 billion, but EU competition authorities have yet to grant approval because of concerns the deal would leave consumers without viable alternatives for package delivery services in some markets that would keep prices in check. Atlanta-based UPS and TNT are trying to convince regulators that their merger is not anti-competitive
, but UPS is reportedly preparing to make concessions that would give up some TNT assets.
Under EU citizenship rules, an airline that operates within domestic Europe must be more than 50 percent owned and effectively controlled by nationals of EU member states or by EU governments.
To maintain continuity of service, the transaction includes a service contract for ASL to fly the planes within the UPS-TNT air network. ASL will be invited to bid with other airlines for the outsourced air business in Europe when the contract expires.
ASL currently owns three airlines with a combined 90 aircraft in freighter and passenger services, two support service companies (maintenance and parts) and various leasing entities. ASL, owned by Compagnie Maritime Belge N.V. and 3P Air Freighters Ltd., had revenue of 410 million euros ($523 million) last year. Its airline portfolio includes Air Contractors, an all-cargo airline based in Dublin, Ireland; Europe Airpost of France, which uses Quick Change Boeing 737 aircraft that fly passengers during the day and can have the main deck switched out to fly cargo at night as well as some 737 freighters; and Safair in South Africa.
TNT said almost all employees of the airline will stay with ASL except for a small number who will transfer to the TNT Express hub in Liège, Belgium. Activities at the hub will not be impacted by the change in airline ownership for at least one year following completion of the proposed sale to UPS, which will develop long-range plans for the facility with the involvement of employees and local government officials, TNT said.
"We are grateful to the employees of TNT Airways and
Pan Air for their outstanding contribution to TNT Express. We have found a new
ownership and control structure that secures the future of the airlines,
ensures service continuity and safeguards jobs in Liège," Interim TNT CEO Bernard Bot said in a statement. "This is an important
step towards completion of the proposed UPS-TNT Express merger and a positive
outcome for the airline employees."
Pan Air Lineas is a cargo airline based in Madrid. - Eric Kulisch