Airborne Express
AIRBORNE
3 a) Airborne was very selective about the customers it served and the services it offered. Airborne targeted business customers that regularly shipped a large volume of urgent items and passed over residential deliveries and infrequent shippers.
Operational Activities: Unlike Federal Express and UPS, Airborne owned the airport that served as its major hub. As a result, it did not pay landing or facility fees but had to maintain the airport itself and did not share the expenses with other airlines. Airborne’s fleet consisted primarily of used aircraft for which the total cost was around 12.5 million. This cost per aircraft for Federal Express or UPS was much higher at around $90 million as they purchased new aircrafts. Airborne’s patented cargo containers allowed it to run its aircrafts 80% full compared to 65-70% utilization rate for competitors.
Airborne’s parcels were concentrated in major metropolitan areas. 80-85% of the volume was shipped between top 50% metropolitan areas compared to 60% or lower for others. Airborne also distinguished itself by concentrating more on afternoon and second-day deliveries. This allowed them to use trucks more often than its competitors for shipping. This resulted in significant cost saving for Airborne as costs of truck were only one-third of owning and operating similar amount of aircraft capacity.
Airborne also did not maintain retail service centers and instead had roughly 11,000 drop-off boxes. It also used independent contractors for almost 65% of its delivery and pickup services which were 10% less expensive than company owned services. An airborne courier picked up and delivered more parcels per stop than Federal express thereby reducing cost-per-unit by 20% for pickup and 10% for delivery.
Technological Activities: Airborne was a follower when it came to technology and only introduced new technology after being certain of a clear derived benefit for its customers.
Marketing and Sales
3 a) Airborne was very selective about the customers it served and the services it offered. Airborne targeted business customers that regularly shipped a large volume of urgent items and passed over residential deliveries and infrequent shippers.
Operational Activities: Unlike Federal Express and UPS, Airborne owned the airport that served as its major hub. As a result, it did not pay landing or facility fees but had to maintain the airport itself and did not share the expenses with other airlines. Airborne’s fleet consisted primarily of used aircraft for which the total cost was around 12.5 million. This cost per aircraft for Federal Express or UPS was much higher at around $90 million as they purchased new aircrafts. Airborne’s patented cargo containers allowed it to run its aircrafts 80% full compared to 65-70% utilization rate for competitors.
Airborne’s parcels were concentrated in major metropolitan areas. 80-85% of the volume was shipped between top 50% metropolitan areas compared to 60% or lower for others. Airborne also distinguished itself by concentrating more on afternoon and second-day deliveries. This allowed them to use trucks more often than its competitors for shipping. This resulted in significant cost saving for Airborne as costs of truck were only one-third of owning and operating similar amount of aircraft capacity.
Airborne also did not maintain retail service centers and instead had roughly 11,000 drop-off boxes. It also used independent contractors for almost 65% of its delivery and pickup services which were 10% less expensive than company owned services. An airborne courier picked up and delivered more parcels per stop than Federal express thereby reducing cost-per-unit by 20% for pickup and 10% for delivery.
Technological Activities: Airborne was a follower when it came to technology and only introduced new technology after being certain of a clear derived benefit for its customers.
Marketing and Sales