DHL Express launches new freight airline in Europe
DHL Express is transforming its international air network with the establishment of a freight airline in Austria and other changes in response to strong volume growth and customer expectations for faster delivery of e-commerce orders.
The parcel carrier said on Tuesday it was filing applications with Austrian authorities for a new airline that will operate mainly European freight flights and plans to convert its DHL Air UK unit to an intercontinental long-haul carrier. . DHL also leases four other 767-300 freighters to support operations in North and South America.
The express delivery company said it expects the new airline to be formed and start operating on intra-European routes later this year using a fleet of mid-size Boeing 757 freighters which will be transferred. by DHL Air UK.
The British unit will make the transition to serve long-haul markets by expanding 767 freighter operations and adding new Boeing 777s to its fleet.
“With the planned structure, we will achieve both a flexible and even more resilient air network in Europe and better global integration by increasing our intercontinental flights,” said Roy Hughes, executive vice president of network operations in Europe, in a press release.
DHL Aviation is a division of DHL Express, part of Deutsche Post DHL, based in Bonn, Germany, which provides airlift capacity for the company’s parcel business. It is an umbrella organization for several airlines owned, co-owned or chartered by DHL Express. DHL Aviation is also making its network available to logistics companies who need to travel from airport to airport, increasing efficiency by helping to fill planes or using them when they are between shuttle assignments. for the express network.
Carriers that fly for DHL Aviation include AeroLogic, ASL Aviation, SmartLynx, Cargo Air and Condor.
E-commerce is pushing package integrators like DHL to continue expanding their fleets and has increased the prospects for sustained growth in the air freight industry as a whole. UPS Airlines (NYSE: UPS) are expected to take delivery of 11 planes this year – three 767s, two MD-11s and 11 747-8, spokesman Jim Mayer said. Boeing delivered another 747-8 last week.
FedEx (NYSE: FDX), which is also strengthening its fleet, received a 777 cargo ship from Boeing on Tuesday, according to a photographer who documents the activity at the Boeing complex in Everett, Washington.
The pandemic has radically shifted consumer behavior towards e-commerce, as people under lockdowns and social distancing rules relied on virtual purchases instead of going to the store to purchase products. And they’re making it clear that they want higher levels of service from retailers, who in turn demand more from service providers.
EMarketer estimates that global e-commerce sales will exceed $ 5 trillion and account for more than 20% of total retail sales, up from around $ 1.7 trillion and 13% of total sales in 2018. The pandemic has pushed forward three-year e-commerce growth in the United States. , two years in China and five years in Latin America, according to the researchers.
Eighty percent of cross-border e-commerce is transported by air, which represents more than 20% of the total value of global e-commerce, according to the International Air Transport Association.
Deutsche Post DHL (DXE: DPW) recently posted the best results for the first quarter of its 50-year history, with Express posting a 32.5% revenue gain and 26.3 volume growth. DHL Express was able to increase the volume of fixed-term international shipments by more than 25% compared to the first quarter of 2020. The company said it expects continued volume growth as more as more companies are offering digital sales channels to consumers and as companies are increasing their shopping online. platforms.
DHL Express said the new strategy of DHL Air UK, based at East Midlands Airport, is designed to adapt to the rapidly changing shipping environment. The airline will increase flights between the UK, the Americas and Asia by adding more than 767 midsize and introducing large 777 freighters. Officials said the renovated airline is expected to begin 777 operations in early 2022.
DHL Express received 11 of the 14,777 ordered from Boeing in 2018. In January, it ordered eight more 777s, with the first deliveries scheduled for next year.
The express carrier is also adding upgrade flights and planes to its Southeast Asian air network, which has also seen a boom in e-commerce.
Separately, Air Transport Services Group (NASDAQ: ATSG) said Monday evening that its leasing subsidiary, Cargo Aircraft Management, had agreed to lease four more converted 767-300 freighters from DHL Express’s US subsidiary for seven years each. Three of the four planes will be delivered in the second half of this year and the fourth will be integrated into the DHL fleet in early 2022.
Neither company has indicated who will fly the plane leased for DHL.
The four additional aircraft will bring to 17 the number of 767 belonging to ATSG flying under the DHL banner. Another ATSG subsidiary, ABX Air, operates eight aircraft in the DHL network.
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