Fine Air and Southern Air Transport have scrubbed merger plans after failing to agree what to do with Southern's Lockheed L-1011 Hercules. The two US second-tier cargo carriers will go their separate ways, even though Miami-based Fine wants to expand its Latin American and Caribbean network.
Fine was interested in the merger mostly because it offered a chance to operate some of Southern's five Boeing 747-200 freighters in South America. Fine's fleet is limited to 14 McDonnell Douglas DC-8s, although it hopes to gain US Federal Aviation Administration approval to fly one L-1011.
Columbus, Ohio-based Southern originally used its Hercules transports for relief missions around the world. As that work declined, Southern has been seeking buyers for the L-1011s. It has sold five, but still owns nine. The merger failed because Fine wanted nothing to do with them and Southern could find no quick way to dispose of them.
If the merger had succeeded, Fine planned to operate Southern as a separate company that would lease 747s to other cargo airlines. Fine hoped to lease three 747s itself. Before being temporarily grounded by a crash last year, Fine was the largest international cargo carrier in Miami. It ended the year ranked third, but now carries more cargo to more cities than ever before.
US-Latin American air cargo is growing. Two-way trade totalled $270 billion last year, with Latin America buying 20% of all US exports. Fine is one of five US applicants awaiting a decision on a new US-Colombia cargo routes.
Source: Airline Business
