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WILMINGTON — DHL says its decision to hire United Parcel Service to fly DHL's U.S. express cargo is integral to a cost-cutting reorganization, in part because UPS has a modern, fuel-efficient fleet of delivery aircraft.

According to DHL, the UPS fleet will provide savings from reduced fuel consumption and, in the long term, from reduced or eliminated capital expenditures for new airplanes. DHL projects that hiring UPS under a 10-year contract will provide a "platform for growth" as DHL seeks to reduce U.S. operational losses it said were $900 million last year and would top $1 billion this year.

UPS' fleet of 264 planes includes the Boeing MD-11 (produced between 1986 and 2001) and Boeing 747-400 (marketed since the late 1990s).

It also includes some of the same aircraft flown by DHL's current contractors that fly DHL packages nationally from Wilmington, ABX Air and ASTAR Air Cargo. Among the overlapping planes are the Airbus A300 (flown by ASTAR, marketed within the past decade), McDonnell-Douglas DC-8 (ASTAR, which dates to the 1960s), and Boeing 767 (ABX Air, marketed in various versions during the 1980s and 1990s).

UPS has made it a priority to continue updating its fleet, said Mike Mangeot, a spokesman at the Louisville, Ky., hub which is the main point in the UPS network. Last year, the company retired old Boeing 727s and plans to retire early versions of Boeing 747s by the end of 2008, Mangeot said.

DHL said it sought and reviewed numerous alternative proposals before settling on UPS and its "more modern and fuel-efficient fleet," but declined to give any details of its review. ABX Air, state and local officials said they were stunned by DHL's announced selection of UPS, a competitor in the U.S. package delivery market.

John Graber, president of ABX Air which operates DHL's Wilmington hub in addition to flying DHL's cargo, said he sees "no business reason" for DHL's selection of UPS. ABX Air's pilots and mechanics have maintained a high availability and reliability rate for DHL, and routinely were willing to accommodate DHL by waiting for late cargo arrivals at pickup points, Graber said.

Joe Teuchert, an ASTAR pilot who has flown DHL cargo for 15 years, said that although older planes consume more fuel, their use can be cheaper for a company than buying expensive new aircraft.

Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.