ABX Air on Friday declared its principal customer DHL in default of their agreement.

The express subsidiary of Deutsche Post World Net stopped making full reimbursements for leasing services, ABX said in an SEC filing. ABX provides aircraft, crew, maintenance and insurance for DHL in the United States.

According to the form 8-K filing, DHL asserts that certain ABX Air expenses are no longer eligible for reimbursement in full by DHL under their agreements because ABX Air's revenue from other customers has exceeded a 10 percent threshold of total ABX revenue. ABX said that DHL's calculation does not include certain fuel expenses. Recent costs incurred while fending off an unsolicited tender offer from ASTAR are also in dispute.

The announcement comes just one week after ABX disclosed an agreement to purchase for about $350 million charter and leasing specialist Cargo Holdings International, whose customer list includes DHL competitors UPS and BAX, as well as business from the U.S. government and the U.S. Postal Service.

ABX Air said it is reviewing its options while continuing to maintain full service to DHL and its customers.

"As the events described in our 8-K filing indicate, our decision to declare DHL in default of our ACMI and Hub Services commercial agreements was taken only after intensive efforts on our part to resolve this issue directly with DHL, or to continue normal operations under explicit language in the agreements for working together while disputed matters are resolved through arbitration," said Joe Hete, president and CEO of ABX Air.

Thomas L. Gallagher