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Old 11-09-2007, 06:25 AM   #1  
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Exclamation ABX Air Declares DHL in Fault of Agreement

http://biz.yahoo.com/bw/071109/20071109005400.html?.v=1


ABX Air Issues Default Notice to DHL
Friday November 9, 8:59 am ET

WILMINGTON, Ohio--(BUSINESS WIRE)--ABX Air, Inc., (NASDAQ:ABXA - News) today said it has notified its principal customer, DHL, that it considers DHL in default under terms of the two principal commercial agreements between the companies, and that ABX Air is reviewing its options while continuing to maintain full service to DHL and its customers.


ABX Air said in a Form 8-K filing with the Securities and Exchange Commission today that DHL has withheld payments to ABX Air otherwise due for reimbursement of legitimate expenses under the ACMI Service Agreement and the Hub and Line-Haul Services Agreement, which govern the business relationship between the companies.

The dispute centers on a claim by DHL that certain ABX Air expenses are no longer eligible for reimbursement in full by DHL under the agreements, because ABX Air’s revenues from other customers have exceeded a 10% threshold of ABX Air’s total revenues. ABX Air’s position is that DHL has improperly excluded from its calculation certain ABX Air revenues that stem from reimbursements for fuel expenses that ABX Air incurred on behalf of DHL. When such fuel-related revenues are properly included in the calculation, ABX Air’s revenues from other customers have not exceeded the 10% threshold in the agreement. In addition, DHL is claiming that ABX Air’s costs in maintaining its public company status and certain professional fees incurred by ABX with respect to an unsolicited indication of interest from ASTAR Air Cargo are not recoverable under the agreements.

Joe Hete, president and CEO of ABX Air, said, “As the events described in our 8-K filing indicate, our decision to declare DHL in default of our ACMI and Hub Services commercial agreements was taken only after intensive efforts on our part to resolve this issue directly with DHL, or to continue normal operations under explicit language in the agreements for working together while disputed matters are resolved through arbitration. Unfortunately, DHL has chosen a course that leaves us with no alternative, as a public company, other than to inform our shareholders of the steps we are obliged to take to defend their interests.

“At the same time, I want to reaffirm that ABX Air is today, and intends to remain, DHL’s principal U.S. business partner. As we pursue a solution to this matter under terms of the agreements, we intend to continue to provide DHL and its customers with dedicated, efficient, and high-quality air and ground logistics services, subject to the terms of our commercial agreements.

“We are aware of the disclosures yesterday by the management of DHL’s parent company, Deutsche Post World Net, that growth in DHL’s U.S. network has slowed considerably in recent months, and that DHL’s U.S. operations are “the critical issue” for that company. While we are eager to support DHL in its efforts to build market share, growth, and profitability in the U.S., that process cannot be furthered at the expense of the shareholders of ABX Air.”

ABX Air also stated that the refusal of DHL to pay the amounts due to ABX Air under the agreements may cause it to be in default under certain of its credit facilities. Should this be the case, ABX Air will consider whether to seek reimbursement from DHL for any damages or liabilities ABX Air may incur as a result of any such default.

ABX Air said its alternatives include, but are not limited to, pursuing the dispute resolution process set forth in the agreements, negotiating with DHL to resolve the disputed issues, or any other option available to ABX Air at law or in equity.

About ABX Air
ABX Air (www.abxair.com) is an air cargo services provider operating out of Wilmington, Ohio, and 15 hubs throughout the United States. In addition to providing airlift capacity and sort facility staffing to DHL, ABX Air is a Part 121 operator and holds a Part 145 FAA Repair certificate. It provides charter, maintenance and package handling services to a diverse group of customers. ABX Air is the largest employer in a several-county area in southwestern Ohio.

Except for historical information contained herein, the matters discussed in this release contain forward-looking statements that involve risks and uncertainties. ABX Air, Inc.'s actual results may differ materially from the results discussed in the forward-looking statements. There are a number of important factors that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, uncertainty as to the outcome of the commercial disputes with DHL, uncertainty as to the impact that these disputes may have on our financing arrangements, and other factors that are contained from time to time in ABX Air's filings with the U.S. Securities and Exchange Commission, including ABX Air's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should carefully review this release and should not place undue reliance on the Company's forward-looking statements. These forward-looking statements were based on information, plans and estimates as of the date of this release. ABX Air undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Contact:
ABX Air, Inc.Quint Turner, 937-382-5591Source: ABX Air, Inc.
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Old 11-09-2007, 06:49 AM   #2  
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Looks like ABX bought more customers just in time to stay alive. Is this the end of DHL in the states? What is the talk in the crew lounge?
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Old 11-09-2007, 07:00 AM   #3  
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Looks like ABX bought more customers just in time to stay alive. Is this the end of DHL in the states? What is the talk in the crew lounge?
It's the beginning of the endgame. I don't wish any ill will, and this isn't a flame at all, 'cause I have buds at ABXA. But, if this doesn't turn around quick, there won't be any CHI buy. No bank in their right mind would back it. Good luck to everybody. We're all going to need it.
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Old 11-09-2007, 08:22 AM   #4  
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ABX stock price pluges to $3.68 at noon... Astars offer of $7.75 doesnt look so bad after all.
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Old 11-10-2007, 01:27 AM   #5  
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Astar guys are always the first to predict the demise of ABX.

On the other hand I know a bunch of ABX pilots that bought the stock today. I'm in below 4.
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Old 11-10-2007, 02:47 AM   #6  
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Astar guys are always the first to predict the demise of ABX.

On the other hand I know a bunch of ABX pilots that bought the stock today. I'm in below 4.

Who said anything about ABX's demise? I do think it's doubtful that the CHI purchase will go through without some positive news to restore the stock.
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Old 11-10-2007, 04:11 AM   #7  
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Astar guys are always the first to predict the demise of ABX.
OK, How about "ABX guys" are always first to blame their problems on everyone else?

I haven't seen anywhere in this thread a "prediction" of the demise of ABX, just an observation of the events of "Black Friday".
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Old 11-10-2007, 04:20 AM   #8  
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My comment was based on DHL's press release stating their position on the dispute. It looks like it will have to go through the arbitration process, which if I recall correctly, takes 90 days or so. I'd have to go back and check to be sure. Since the CHI purchase is scheduled to be transacted at the end of the year, it's likely this issue will still be an unresolved one.

DHL rejects ABX Air's default claim
Fri Nov 9, 2007 4:46pm EST
Nov 9 (Reuters) - DHL said it rejected ABX Air Inc's (ABXA.O: Quote, Profile, Research) default claim, as the air cargo services provider's revenue from other customers had crossed the 10 percent threshold.

DHL said under their contracts, ABX must pay for overhead related to such revenue, if its total revenue from non-DHL sources crossed the 10 percent limit.
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Old 11-10-2007, 08:01 AM   #9  
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My comment was based on DHL's press release stating their position on the dispute. It looks like it will have to go through the arbitration process, which if I recall correctly, takes 90 days or so. I'd have to go back and check to be sure. Since the CHI purchase is scheduled to be transacted at the end of the year, it's likely this issue will still be an unresolved one.

DHL rejects ABX Air's default claim
Fri Nov 9, 2007 4:46pm EST
Nov 9 (Reuters) - DHL said it rejected ABX Air Inc's (ABXA.O: Quote, Profile, Research) default claim, as the air cargo services provider's revenue from other customers had crossed the 10 percent threshold.

DHL said under their contracts, ABX must pay for overhead related to such revenue, if its total revenue from non-DHL sources crossed the 10 percent limit.
Actually the contract says DHL will pay first, then resolve the issue.
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Old 11-10-2007, 08:05 AM   #10  
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Actually the contract says DHL will pay first, then resolve the issue.
You would think so. Evidently DHL thinks differently.
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