Lufthansa, DHL planning air freight joint venture

<p>Lufthansa AG and Deutsche Post World Net AG said Thursday they will form a new, jointly owned cargo airline in a bid to expand their efforts to capture more air freight business from rivals like FedEx Corp. and Atlanta-based UPS Inc. in Europe and Asia.</p><p>Lufthansa Cargo, the unit of Cologne-based Lufthansa that handles cargo and air freight, said it would partner with DHL, the express and logistics division of Deutsche Post, and provide $69.88 million in money to start the airline.</p><p>The new company, which has not been named yet, will be based in Leipzig, in eastern Germany, and is expected to start operating in April 2009 generate annual sales of approximately $698.75 million. DHL has been developing a new central European shipping hub at Leipzig/Halle Airport, with an eye toward express deliveries.</p><p>The move was the next logical step for Lufthansa and DHL, as both have been cooperating with each other at cargo hubs in Cologne and Brussels, Belgium. DHL is also Lufthansa's biggest customer.</p><p>Dr. Klaus Zumwinkel, Chairman Deutsche Post World Net and CEO said:</p><p>"This is an ongoing development consistent with our intercontinental joint venture which we began in 2004," said Deutsche Post Chief Executive Klaus Zumwinkel.</p><p>"DHL will notably accelerate for customers the exchange of goods between Asia and Europe through market-leading transit times," he said. "That will also substantially strengthen Germany's position as a logistics base and additionally spur the economic upturn in our country."</p><p>The new carrier be equipped with 11 Boeing 777s that are due to be delivered in February 2009, Lufthansa said. Its route network will include destinations in Singapore, Thailand, the United Arab Emirates, India, China, South Korea, Britain and Italy. It will also fly to the United States, including New York and Chicago, on weekends.</p><p>Shares of Lufthansa were down more than half a percent to $27.73 while shares of Deutsche Post were down a quarter of a percent to $29.31.</p><p>___</p><p>On the Net:</p><p>HASH(0x2dec7f8)</p><p>HASH(0x2dec87c)</p>

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