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UPS Moving into Latin America

June 28, 1999

MIAMI (AP) _ Hoping to increase its business in Latin America, United Parcel Service plans to buy the assets _ including the operating rights _ of Miami-based Challenge Air Cargo.

``We see this now as an opportunity for UPS to provide seamless service throughout Latin America,″ Bob Elizondo, UPS’s vice president of operations for Latin America and the Caribbean, said Monday.

The firms hope to reach an agreement within two weeks. Financial terms of the deal were not disclosed.

The assets include all of Challenge Air’s leased facilities, ground equipment, computer systems, route authorities and some staff. Challenge Air has 1,200 employees in the United States and abroad.

The company’s fleet of aircraft is not included in the asset list, said Bill Spohrer, president and founder of Challenge Air Cargo.

Challenge Air operates a fleet of three Boeing 757s and two DC-10-40 freighters and will be adding a third in coming weeks.

The company makes more than 60 scheduled flights a week, serving 17 cities in Latin America. UPS now operates 15 flights a week into Puerto Rico, 10 a week into Mexico and charters a number of different flights throughout the rest of Latin America.

``This particular acquisition is going to accomplish what would have taken us years to develop had we had gone through separate acquisitions,″ Elizondo said.

FDX Corp., the parent company of Federal Express, already has a substantial presence in Latin America.

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