Earlier EU intervention in DHL deal preferable says ITF

22 August 2008

The European Commission’s ruling on guarantees made as part of a transfer of DHL operations to the German city of Leipzig, is too little too late, according to the ITF.

European regulators ruled that DHL should pay back financial guarantees they received in connection with setting up a new hub at Leipzig Halle airport. The European Commission, began an investigation into state aid from the local authority of Saxony, where the airport is based, to DHL in November 2006. Saxony is the airport’s main shareholder.

On 23 July, the commission ruled that guarantees of up to €500 million (US$741 million) made to DHL in the form of a “comfort letter” by Saxony were unlawful. The guarantees would cover the company if the airport failed to meet conditions outlined in a framework agreement.

Liz Williamson, ITF Civil Aviation Section Assistant said: “Whilst this investment by lower Saxony in the new DHL facilities at Leipzig has brought new jobs into the region, this has nevertheless apparently been at the expense of higher paid jobs in Brussels, Belgium, which have been terminated as a result of transferring the work to Leipzig. It is a pity that the European Commission is ruling retrospectively in this instance as intervention much earlier in the planning process may have called into question the relocation to a cheaper wage labour area.”

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