Air Transport World

Burlington Northern grudgingly enters the airline business; after years of dependence on scheduled airlines to meet needs, this air freight forwarder finally buys own aircraft and opens hub.

Burlington Northern grudgingly enters the airline business

The last of the old-line air freight forwarders finally has a hub. This month, Burlington Northern Air Freight is due to start flying its own aircraft through a central sorting center in Ft. Wayne, Ind. The new operation is coming none too soon.

BNAF, begun in 1972 as a subsidiary of the Burlington Northern Railroad, has gone through a difficult period lately after years of substantial profits and success. First, ownership changed. In 1982 Pittston Co. purchased the forwarder from the railroad. Pittston had some financial problems so there was a major management turnover at corporate headquarters in 1984. The same year, BNAF Chairman Lawrence Rodberg left. The company also expects to lose money this year, the result of an erosion of business and a boost in freight rates by the common carriers.

Rodberg had prided himself on his relations with the scheduled airlines to provide good service and competitive rates. He, and his advertising, insisted that it was "People, not planes' that were the key to good service. But parallel to that ad campaign the common carriers were dumping their freighters, thereby eliminating the scheduled capacity Rodberg depended on. BNAF could no longer offer customers the rates or service formerly available and the customers began turning elsewhere.

The inevitable

While insistent that he did not want to go into the airline business the way other forwarders had done, Rodberg was still a businessman. Faced with the loss of BNAF's meat and potatoes, automotive traffic, he began charter flights from the Midwest to Texas. And, in order to compete for small package business, he also started chartering small planes, although these were not for BNAF's exclusive use.

Before departing from BNAF he also discussed the possibility of link-ups with particular airlines. According to James Neff, senior VP-marketing and business planning and formerly with Emery, "We were pretty far along in a deal with United, similar to the Eastern/CF Air Freight (contract space) deal when Rodberg left. …

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