ABX Air uncertain on future as DHL pulls out
NEW YORK, Nov 11 (Reuters) - ABX Air, which handles packages for DHL Express in the United States, faces 6,000 or so layoffs and an uncertain financial future after the German shipping company decided it would pull out of the domestic U.S. market.
The DHL contract generates almost three-quarters of sales for parent company Air Transport Services Group Inc (ATSG.O), worth about $280 million in the second quarter.
Deutsche Post AG's (DPWGn.DE) decision on Monday to pull its DHL Express unit means that ABX Air will likely have to lay off most of its 7,000 or so employees.
"A substantial majority of our employees dedicated to DHL's domestic package network will not be required by DHL after January 2009," the company said in a statement on Monday.
ABX Air may yet handle DHL's international business in the United States, a spokesman for Air Transport Services said, but that would depend on whether DHL agrees on a plan to use rival United Parcel Service Inc (UPS.N) to handle its U.S. packages instead.
ABX Air and Air Transport Services are still assessing the impact of DHL's move on their business, the spokesman added, and will likely file their delayed quarterly financial report later this week.
Air Transport Services' shares fell 12 percent to 22 cents on Nasdaq. (Reporting by Bill Rigby, editing by Maureen Bavdek)
