UPS CONFIRMS CHALLENGE ACQUISITION

   United Parcel Service said Monday it plans to buy the assets of
Miami-based Challenge Air Cargo.
   Terms of the sale were not disclosed, although both companies hope to
close the deal by year end.
   UPS will acquire Challenge’s Latin American route rights, its facilities
and equipment, not including the airline’s three B757 and  three DC-10-40
freighter aircraft, which Challenge will continue to operate for UPS under
wet-lease contracts for at least one year.
   UPS and Challenge said they will continue to sell capacity to
forwarders. But the loss of Challenge, Miami’s second largest all-cargo
airline behind Atlas Air in terms of tonnage, would be a major blow to
forwarders that generally try to avoid using integrated carriers for
competitive reasons.
   Bill Spohrer, Challenge’s president and founder, said he plans to leave
the airline at the end of the year to pursue other opportunities in Miami.
   Challenge operates between Latin America and its home base in Miami and
a secondary facility in Dallas. The Dallas operation, however, will likely
be closed down after the UPS acquisition, Spohrer said.
   Challenge has a network covering 16 cities in 13 countries throughout
Latin America.