UPS makes unsolicited bid on TNT Express

[sn26567]

This could have serious consequences on TNT operations in Liège: Atlanta-based United Parcel Service makes unsolicited $6.4 billion bid on TNT Express. The TNT Express board rejects the bid, but talks go on. TNT Express is the second largest European parcel delivery company; UPS is only a minor player in Europe.

More: http://www.bloomberg.com/news/2012-02-1 ... go-on.html

[liege-bierset]

"This could have serious consequences on TNT operations in Liège:"

André,I agree it would, but could you elaborate a bit your view on this.
In September, UPS have announced an investment of 200M USD in Cologne (new sorting line) to be on stream by end of 2013.
On top Fedex are not out the race (and they have cash).
Does anybody know how the saga is going to finish ?

[sn26567]

"This could have serious consequences on TNT operations in Liège:"

André,I agree it would, but could you elaborate a bit your view on this.

You have given the answer yourself: UPS is vased in Cologne, close to Liège. If they take over TNT, they will have their European hubs close to each other: a waste of money that will ask for rationalisation. In Liège or in Cologne? In both cases, Liège will be seriously affected, for good or for bad.

But as you have also rightly stated, FedEx is not yet out of the race...

[simulator]

Shows once more that airports should never put all their "eggs" in one basket...
Diversify, it's nice to have a good reputation as being "an excellent freight base".... but what if that freight base is suddenly affected by an (un)foreseen circumstance (e.g. TNT being taken over and leaving EBLG)...
Liège has a beautiful passenger terminal, easy access roads, good parking facility, why is it not utilised to it's capacity?
Why are (major) maintenance firms not interested in Liège?...
C'est dommage...

[Acid-drop]

15 years ago, TNT analysed both airports and they move from Cologne to Liège.
Liège was then only a potato field with some lights.
Now it's a lot better, so it should remain better than Cologne.
But the best player doesn't always win ...
You can make sure UPS won't give up they newest investment in Cologne and that the german know how to do lobbying.

Liège cargo is doing well, I believe TNT is less than 50% of the traffic now.
The pax activity is not developed for political reasons.
Everything could change in the future, but it stays a nice place for easy development, lots of space, political help with subsidies and so on, a lot of human resources, and the guaranty that night flights will remain.

[Ogerlio]

These bids on TNT happens from time to time. it's not UPS or Fed Ex first shot at it.

As said, we might wonder what they have in mind in terms of LGG usage. The expansion plan is described on their website with north side being enlarged to make a full apron ISO the military area, a new maintenance facility near the Hollogne fort, an extension to reach the TGV train lines...

As for us, the TNT staff, nobody can say if it will be a good or bad thing if it ever happens. I think UPS and Fed ex will not give a damn about employees or pilots or planes but will just be happy to make the deal to get the infrastructure and the slots in their hands.

Time will tell but hope these deals get turn down again.

Bye for now.

[Acid-drop]

The LGG development in the north zone is more for other (new) companies I believe.
If i'm not mistaken, TNT has done major investments a few years ago and had no plan for the future, especially not in those difficult times.

I agree with you, the shareholders probably don't care much about TNT staff, and the 5000 jobs (approx) that are active in LGG because of TNT.

I just hope that the management of LGG have prepared this scenario, as we have rumors about this for already 2-3 years. It's time to start the lobbying !

[Acid-drop]

some update
http://www.bloomberg.com/news/2012-02-1 ... offer.html

[Acid-drop]

"Crucially, Cologne/Bonn Airport also offers UPS the possibility to fly at night until at least 2030."
source : http://www.ups.com/content/ru/en/about/ ... 6_hub.html

But wikipedia says "one of the country's few 24-hour airports"

Confusing ...

Frankfurt airport recently moved to a night ban... anything is possible
The night opening hours will be the key for Liège... for the rest they are very similar airports with similar advantages

[Atlantis]

UPDATE

TNT Express decided during a conf call in the late afternoon that they will focus on the European market via their road network. They will stop or strong reduce their intercontinental network.
This means that they will reduce fleet. The B747 will go out of the fleet.
For their flights to/from China they will work with a local partner.

Sourse: Lloyd

[cnc]

? did i miss something about 3V? stop or strong reduce their intercontinental network?

[Acid-drop]

that's insane.
they had great success in asia before that crisis.
they even bought some 777 to grow.
of course the EU network is their biggest strenth and is very stable,but its also a lot less growth when everythig will be good again. and it sure will.
sad news, but i'm not sure it's directly linked to the ups option.
although.... if the main goal is not to have a nice growing company but more to become an interesting bride, it probably make more sense.

[sn26567]

Strangely enough, when presenting the results for 2011, TNT did not say one word about the UPS offer.

[Nevihta]

that's insane.
they had great success in asia before that crisis.
they even bought some 777 to grow.
of course the EU network is their biggest strenth and is very stable,but its also a lot less growth when everythig will be good again. and it sure will.
sad news, but i'm not sure it's directly linked to the ups option.
although.... if the main goal is not to have a nice growing company but more to become an interesting bride, it probably make more sense.

Unless you're an insinder, it's not really possible to say if that was a success or not...
I don't know how it works in TNT, but buying those aircrafts really makes me think of Jet Airways with their T7 a couple of years ago. From the outside, all of this kind of looks like a mess...

[Acid-drop]

I'm not an insider, but it's easy to tell that some period of time in the past 3 years were very successful. New asian routes announced every quarter and high load were commons (*). But those last 3 years were also the worst 3 years of the whole aviation industry. Certainly not the best time to buy/lease those T7. It was also a mess with they 747, 2 of them were leased quickly.

People start to realize that bad numbers + the ups offer are a time bomb for Liège:
http://www.rtbf.be/info/regions/detail_ ... id=7613223

I would not be surprised if LGG looses 15% of its traffic this year.
There was some hiccups in the past already:
http://en.wikipedia.org/wiki/Li%C3%A8ge ... o_activity

But loosing TNT, that would be the same catastrophe as BRU loosing DHL, a massive impact, not only on the numbers, but also on the whole power of attraction of the airport

(*) example : http://www.tnt.com/express/en_id/data/n ... press.html

[Nevihta]

I'm not an insider, but it's easy to tell that some period of time in the past 3 years were very successful. New asian routes announced every quarter and high load were commons (*). But those last 3 years were also the worst 3 years of the whole aviation industry. Certainly not the best time to buy/lease those T7. It was also a mess with they 747, 2 of them were leased quickly.

For an aviation enthusiast, this is a success, for a company, not necessarily. So we should be careful about what looks "easy to tell".
Tomorrow, I can launch a freight company, opening routes and having 100% loadfactor. That doesn't mean I'll make money.
Buying aircraft during a crisis doesn't mean anything neither (see Ryanair).

So it would be better to position yourself as an aviation enthusiast, or an EBLG enthusiast, or having strong information and financial background...

[liege-bierset]

I don't think that the new strategy as detailed at the press conference is that important.
Now there are three possibilities:
- Sell the business to UPS. At this stage, nobody knows how they would integrate TNT assets.
- Several analysts are expecting that FEDEX will have the last say (for several good reasons) and it would be the best fit.
- Stand on their-own and reduce overall market share and stay a local player. I think the third option is most unlikely to happen. Because stakeholders are pushing hard for the sales, since they consider that existing business will never bring a decent ROI. Question is not to know is they will sell but "at what price"

NB: As you may know, a majority of a/c at TNT are leased and can be return to the leasing company, any time.

[LJ]

that's insane.
they had great success in asia before that crisis.
they even bought some 777 to grow.
of course the EU network is their biggest strenth and is very stable,but its also a lot less growth when everythig will be good again. and it sure will.
sad news, but i'm not sure it's directly linked to the ups option.
although.... if the main goal is not to have a nice growing company but more to become an interesting bride, it probably make more sense.

If it was a great success than they wouldn't have made a loss of 270mio last year....

People start to realize that bad numbers + the ups offer are a time bomb for Liège:

The they've been sleeping for a while. When TNT Post was split into PostNL and TNT Express, not many believed that TNT Express would remain a stand alone company. PostNL waits until someone comes who wants to pay the desired price for TNT Express and they will be sold. The question is thus who wants to pay the desired price for TNT Express. Thus this is shouldn't be a surprise for LGG.

[4-Stroke]

Would TNT Airways remain a EU/Belgian company if UPS takes over? What happens to the traffic rights, intra EU and long haul?
How is this managed with Swiss and KLM with respect to their non-EU rights.

This could end very badly for LGG and TNT A employees.

[4-Stroke]

For some reason no one mentioned what this will mean for Belgian Aviation. Take over of TNT Airways by UPS means TNT A is no more EU/Belgium owned and thus no longer allowed to fly intra EU or long haul.
All TNT A personell should be very worried. LGG airport will lose 50% of it's cargo, not to mention the loss of jobs.
Buy just one TNT Express share and go to the shareholders meeting on april 11!
Stand up for yourself.