United Parcel Service (UPS) aims to improve its position in the Latin American market with the purchase of Challenge Air Cargo (CAC), a freight-only carrier flying to 17 cities in that region from Miami and Dallas.
CAC founder and president Bill Spohrer says the deal includes the acquisition of route authorities, facilities and ground equipment, but not the airline's aircraft, which remain under the control of CAC chairman Peter Ullrich. The value of the transaction will not be confirmed until a definitive purchase agreement is concluded shortly, with the deal likely to be finalised by 31 December, pending US regulatory approval. UPS and CAC first co-operated two years ago.
CAC's strong position in Latin America is the key to the deal. UPS regards the region as the "fastest growing market in the world", but faces tough competition from FedEx and DHL. Miami-based Fine Air Services, which recently acquired Arrow Air for $115 million, will also present a challenge.
The takeover will see CAC operate aircraft on behalf of UPS for up to a year. Its three Boeing 757-200PF freighters will be returned to lessor Ansett Worldwide Aviation Services.
Source: Flight International
