The ASL Aviation Group from Ireland has come to an agreement to purchase both of Dutch logistics company TNT Express’s airlines, TNT Airways and Pan Air Lineas Aereas. This agreement is pending the approval of UPS’s acquisition of TNT Express from the European Union. UPS announced that it would buy-out TNT Express for 5.2 billion Euros back in March, but this transaction has drawn heavy fire and opposition from the European Competition Commission, who is currently unsure whether or not to allow UPS to carry out this deal.
As a group mentioned in an earlier blog, according to the European Competition Commission, there are only four global “integrators” in the express delivery business that combine both ground and air modes of transport: UPS, DHL, Fedex, and TNT Express. Currently, Fedex has a very small market share in Europe, meaning that the majority of transportation needs in Europe would be handled by only two companies, thus causing backlash from the European Union.
TNT Express was required to sell their airlines before the UPS merger (if it gets approved) because stiff European Union regulations make it very difficult for European registered airlines to be owned by non-European companies, such as UPS. According to TNT Express’s deal with ASL Airlines, if the transaction is approved, ASL commits to handle all of TNT Express’s air freight post-merger as well as maintain TNT Airways’ headquarters in Liege, Belgium and inherit all its employees. This clause in the contract may put to rest the concerns that the UPS and TNT merger would lead to lay-offs.