ABX execs buy up shares
12 / 01 / 2009
STRUGGLING air cargo company ABX Air may yet have a resurgence. Following major restructure three top executives and five of six non-executive members of its board have bought 400,000 shares of Air Transport Services Group (ATS), ABX Air’s parent company.
ABX Air’s main customer was DHL, which withdrew from the US express market last year forcing the Wilmington-based cargo company to shrink up 75 per cent. Share prices fell to as low as 12 cents last November. Estimates suggest that the final total will be 9,000 job losses at ABX Air and other companies because of DHL’s departure.
However, Joe Hete, chief executive officer of ATS, has said the company will try to sell DHL some of the aircraft that it used under the DHL contract while converting the remaining ones to be able to take on larger containers, which it will then lease to other companies.
“That’s how we will emerge from this transition as a strong, flexible and highly competitive global air-cargo service company,” he said.
Hete and the seven other executives who have been buying up stock obviously believe that they will survive. Analysts have suggested that while it may simply be an attempt at “stock window dressing” to make the company appear more robust than it is, is unlikely.
“Window dressing only goes so far,” said Valerie Newell, managing director at Riverpoint Capital Management. “They know what’s happening with the company. They have intimate knowledge.”