QUOTE=captjns]Why would a cargo company purchase a passenger operation?[/QUOTE]
There are probably many factors that could cause ABX to want to diversify their revenue stream. It’s a good question and really one only ABX has the answer for; however, I'll give it a go. It could be that ABX management knows something that we don't. Maybe they're concerned about their future. It certainly is in their interests and that of their shareholders to be thinking ahead. Therefore, it might be part of a strategic plan to hedge their bets now in the event of circumstances that may or may not eventuate in their future; in short, to cover their a$$. If what
Noah werka says is correct (ABX considering buying out PACE Airlines), it could be that they see it as a timely opportunity to diversify their interests. And given the decline in their main source of revenue from 2005 to 2006, if they do decide to grab that business opportunity it might turn out to be a smart move.
http://www.abxair.com/ir/index.html