There is a certain irony connected to the potential acquisition of TNT by UPS. DHL may want challenge the status of TNT Airways as a European carrier, should the deal go ahead, mirroring the problems it faced when it tried to penetrate the US market in the early 2000s.
The possible acquisition of TNT by UPS has thrown up what could evolve into a highly ironic situation. TNT has a wholly owned airline, TNT Airways, which is based at its European hub in Liege and which exists to provide TNT Express with an air freight network connecting all its locations throughout the world.
However, a change of ownership could have serious implications for the airline. TNT Airways is incorporated in Belgium and qualifies as a Belgian and EU carrier. This brings a number of privileges that include the company’s use of Liege Airport, routings and reciprocal landing rights and trade arrangements.
As TNT itself sets out in its IPO prospectus published in 2011, changes in the company’s shareholder base such that the majority of the ordinary shares are held by non-EU shareholders may result in TNT Airways no longer being able to benefit from its privileges.
The airline may not be able to use certain airports, including its base at Liege. TNT admits that this could affect its revenues and profitability.
The situation calls to mind a very similar problem faced by DHL in the US. Due to airline ownership legislation, it was forced to sell a controlling stake in DHL Airways to a US corporation in 2003.
UPS and FedEx both challenged the ownership status, saying that as the majority of work undertaken by the airline was for its largest customer, DHL, it was, de facto, owned by a foreign enterprise. This argument was eventually thrown out by the US judicial system and the Department of Transportation.
Should the acquisition of TNT by UPS go ahead, TNT Airways may well be spun-off to conform with EU legislation. However, there may be a case that the same issue exists over “control” and “ownership”. If DHL’s management have long memories, they may well wish to test this issue in court.
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Bangalore: Top Indian industrialists are funding alumni base of Harvard University, reveals a recent survey by the U.S. News Short List. Meanwhile, the Indian universities are suffering from lack of contemporary IT infrastructure, absence of best practices and low student gross enrollment ratios (GER). Yet, the top industrialists choose to invest westward instead of directing their funds on Indian universities.
As per the news survey conducted annually among 1,800 schools and reports of two-year alumni, Princeton University was rated on the top, making it the most loved university for donations. It is also to be noted that unlike Indian universities, which are largely funded by tuition fees, western universities are mostly funded by donation. For example, only about 20 percent of Harvard expenditures are met by tuition fee collections while nearly 50 percent comes from donation. A significant amount of the donation comes from its alumni base.
A number of studies that are conducted to study alumni donation patterns reveal some relevant questions being asked like the age of the donor, what affiliation the donor has and what is the motivation of the giver. A few studies seem to suggest that some alumni donate with the hope that their children would get an easy passage into the same Ivy League institutions. Even when Anand Mahindra joined the ranks by giving the highest donation to any humanities discipline at Harvard, questions were raised whether the donation was timed with his two sons seeking college admissions.