DHL Launches Intra-European Airline to Meet E-Commerce Demand

DHL Express on Monday launched a new cargo airline to add capacity and faster transit for its cross-border express network in Europe as demand for express package shipments continues to grow.

DHL Air Austria, based at the Vienna airport, will have a fleet of 18 Boeing 757 converted freighters imported from DHL's former U.K. operation and about 176 pilots, the company said.

The new in-house airline is part of a restructuring within the DHL Aviation organization. Earlier this year, DHL decided to turn its DHL Air UK unit into an international long-haul carrier.

DHL Express has said the new strategy for DHL Air UK, based at East Midlands Airport, is designed to adapt to the fast-changing shipping environment. The airline will increase flights between the U.K., the Americas, and Asia by adding more midsize 767s and introducing large 777 freighters. Officials said the remodeled airline is expected to begin 777 operations in early 2022.

DHL Aviation is a division of DHL Express, part of Bonn, Germany-based Deutsche Post DHL, that provides air transport capacity for the company's parcel business. It's an umbrella organization for several airlines owned, co-owned or chartered by DHL Express. DHL Aviation also makes its network available to logistics companies that need airport-to-airport moves, which increases efficiency by helping fill planes or utilizing them when they are between shuttle assignments for the express network.

Cross-border e-commerce is expected to grow at a compound annual growth rate of 17.4% through 2026, according to an October study by California-based AllTheResearch. The market was valued at $578.6 billion in 2019.

DHL Air Austria received its air operator certificate on Oct. 18 from Austrian authorities and subsequently registered three aircraft in the country. The remaining 15 aircraft will be registered under its license and added to the fleet during the first quarter of 2021, according to DHL.

The inaugural flight for the in-house airline arrived at the Vienna airport Monday for a celebration that included government officials.

DHL officials said they selected Austria as the new airline's base of operation because of its central geographic location, stable political climate and aviation regulatory regime. DHL Air Austria was able to complete all necessary procedures for establishing a new airline in nine months.

Deutsche Post DHL (OTCUS: DPSGY)  posted very strong third-quarter results last week, with revenue up 23.5% to $23.1 billion, operating profit up 28.6% to nearly $2.1 billion and operating margins increasing to 8.8% from 8.5%.

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