DHL continues to revamp its US air operations

DHL Express ended its disastrous attempt to compete in the US domestic express market in 2008, but since that time, its US international business has grown strongly. The company requires a considerable amount of dedicated lift to support this US business, including domestic feeder service as well as international lift.

In the period immediately following the cessation of US domestic express service, most of the required feeder lift was supplied by Air Transport Services Group (ATSG. though its ABX Air subsidiary), while Polar Air Cargo (a DHL/Atlas Air Worldwide Holdings joint venture) supplied much of the international lift. But over the course of the six years since 2008, DHL has added another major US partner, and also shifted some of the domestic flying.

The new partner, Southern Air, began operating four 777Fs in international service for DHL in 2011, and this year Southern began operating the first of five 737-400Fs in regional feeder service in both North and South America. While the 777Fs were originally operated by Southern on an ACMI basis, DHL took over their leases in 2013, and Southern now operates them (and the 737-400Fs) on a CMI basis.

DHL has also added aircraft to its agreement with Atlas, going from the original six 747-400Fs operated by Polar to ten now (including several 747-8Fs). These freighters, all operated on an ACMI basis, are mostly used in trans-Pacific service. In 2012, Atlas and DHL reached an agreement under which Atlas began operating five 767-200BDSFs (formerly operated by ABX) for DHL in US domestic service on a CMI basis, and in 2013 Polar began operating two DHL-owned 767-300Fs on a CMI in Asia.

And the changes continue… This week Atlas announced that DHL will add another four 767-200BDSFs to the CMI agreement, with the first beginning service in December of this year and all four in service by the end of January 2015. These aircraft are currently operated for DHL by ABX Air, but with the DHL/ABX CMI agreement on these freighters expiring, ABX parent ATSG said “DHL sought bids to operate the aircraft from other vendors earlier this year.” ATSG also pointed out that “this reduction in CMI operations for DHL will likely reduce ATSG’s earnings from continuing operations by less than one cent per share in 2015,” and that “Excluding those four aircraft, ATSG currently operates twenty-one freighter aircraft over scheduled routes for DHL, including seventeen Boeing 767s and four Boeing 757s.”

In summary, once the five 737-400Fs are redelivered to Southern Air and the four 767-200BDSFs are moved from ABX to Atlas, DHL Express will be using almost fifty freighters, operated by three carriers, to support its US international express business. The chart at right shows the breakdown of the fleet by aircraft type and operator (note that the chart also includes two 767-300Fs operated by Polar for DHL in Asia and that some of the 737-400Fs will be operated in Latin America).