Air Transport World

Airborne-all the way

A change in philosophy, expansion of operating capabilities and blind luck have led to growth and record profits

Six years ago, Airborne Express essentially was a glorified freight forwarder with wings. Domestically, it had a highly sophisticated integrated express service using its own aircraft and operating out of its privately owned airport in Wilmington, Ohio.

Internationally, however, it provided limited services for both express packages and heavy freight with all of its operations- from ground pickup and delivery to air transport-purchased from service partners and other airlines. It also contracted out all logistical and administrative services.

But that worked It allowed Airborne to expand into international markets without the expense-or danger-of committing its own resources into unknown waters (ATW, 2/92). It also allowed Airborne to report annual revenue growth averaging 20% since 1985.

Today, Airborne has added to and integrated all of its other services, providing one of the widest ranges of global services of all of the integrators-including ocean-transport capability. The few philosophical similarities with the Airborne of old are that it still uses external lift for its international operations, still operates as a low-cost domestic express integrated carrier, still services only corporate accounts and still refuses to advertise, creating a customer base by working with its clients to customize service to meet their individual needs.

Virtually everything else has changed, including the use of service partners, or GSAs. In the mid-1990s, Airborne shifted its philosophy of contracting with GSAs to one of forming joint ventures with them, giving it greater control over its worldwide operations. Simultaneously, it started increasing its operational capabilities, particularly in its international Area I-Europe, Africa and the Middle East.

"SIX years ago, we had one office in London. That was the extent of our presence in that whole area," said John Birds, VP and GM-International Area I.

"Now, we have changed our philosophy, taken it a few steps further, forming joint ventures, taking an equity ownership with our partners. Today, we have eight totally owned facilities plus 12 joint-venture operations in the Europe, Africa and Middle East regions. This includes a branch office in Bristol, England"

Actually, Airborne considers four options in opening new ventures internationally: Opening its own office, 100% owned and operated by Airborne; buying out a business partner, which also brings 100% control; forming a 50/50 joint venture with a company already doing business in the area or signing a franchise/licensing agreement with a company that will operate under the Airborne name to Airborne standards. …

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