Airborne express cost analysis airborne express written case analysis express mail industry structure the environment of the express mail industry has experienced drastic changes over the past decade, let alone since its inception in the 1900. Airborne express case q&a info other than case airborne express is acquired by dhl in 2003 dhl retained ownership of airborne's ground operations and spun off its air operations as abx air, inc currently dhl is the number 1 delivery service company(2nd is fed ex and 3rd is blue dart) airborne express case q&a 1. The cost of the aircraft operated by airborne express numbered approximately 175 (98 owned) at anywhere from $20-$24 million per aircraft compared to the industry average of $90 million per aircraft take this figure compared to fed ex's fleet of 489 owned planes: 98$24 million= $2,352,000,000 vs average cost between new and used aircraft of. Business school 9-798-070 rev may 23, 2007 airborne express the officers of airborne express could hardly be more pleased1 results for the third quarter, 1997, were spectacular revenues for the quarter were up by 29% over the previous year, and yearto-date net earnings had increased by more than 500.
At first glance, it appears that airborne may not have a lower cost structure because of the size of their depreciation cost versus revenue because depreciation was the only cost that was present in the financial results exhibits for all three companies, it has to serve as the number for comparison. Complete overnight letter cost comparison mark burgoyne |airborne express case study 7 figure 1 weight per shipment mark burgoyne |airborne express case study 8 revenue per shipment figure 2 figure 3 list prices of express mail carriers figure 4 company net incomes (%) mark burgoyne |airborne express case study 9. Airborne is a technology leader in advanced composites, specialised in the industrialisation of engineering and manufacturing of durable fiber reinforced composites for space, aeronautics and marine industries.
Estimated cost structure of federal express overnight letter fedex airborne item cost / unit cost / unit pickup labor 109 p12-- p12 -- p12-- fuel 007 maintenance & depreciation 021 subtotal 137 long-haul transport flight & trucking related expense 244 overall, airborne ships 15% more of its volume by truck than fedex does, (pg 11 and 12 of case. Airborne express was once a low cost alternative to the fedex-ups duopoly and was eventually acquired by the parent company of dhl express in 2003 dhl supply chain as of 2017 is the 4th largest supply chain and logistics company in north america [1. Airborne express launched ground delivery service and 10:30 am delivery service also launched some services of its own, including small business center and airborne ecourier august 14, 2003 airborne shareholders approved the acquisition of airborne, inc, by dhl of brussels, belgium august 15, 2013 the acquisition became effective the next day.
However, airborne had grown far faster than either of the two big companies in express mail business, and it held 16% of the domestic express mail market by 1997 looking over the airborne express case, airborne face a situation that it needs to make actions in order to survive. Airborne express is pursuing a strategy of cost focus as per this strategy, they have decided to target a particular segment of the market - businesses where demand is not seasonal and they have set out to become a low cost provider of express delivery services to such businesses. Airborne express case solution cost advantage the analysis clearly indicates that airborne has cost advantage in the case of overnight evening, which means that it is most reliable in ground courier services than in air.
• airborne express is a express mail and cargo delivery company • it is the third largest player after fedex and ups • airborne was founded as the airborne flower traffic association of california in 1946 to fly. Airborne express originated in two companies based on the west coast — pacific air freight, inc and airborne freight corporation pacific air freight, an air freight forwarder, was founded in seattle in 1947 by former army air corps officer holt w webster. Airborne express case study 1 2204 words | 9 pages executive summary airborne express is the third largest and fastest growing international air express delivery company in america.
Airborne express as a niche player, focuses on high-volume corporate accounts which enables it to significantly cut down on its costs however on a per-pound basis, airborne could charge only as much as $0 94 on domestic high-volume transactions and $0 77 on international freight transactions for 2001 because of the high-bargaining power of. However, the cost structure is more reliable than its counterpart in order to review the current operational cost efficiency of both the companies, the cost structure of fedex (given in the case) will be compared to the cost activities associated with airborne (estimated. Airborne express is the fastest growing company in the industry the company owns an airport that served as its major hub as compare to its rivals this allows to tailor the facility to its needs without any obstacles as well as it did not pay any landing fees another strength of the airborne express is its relationship with roadway package system. To save 10% of $3 42 per letter at an average of 700,000 letters per day mould mean $239,400 of savings per day, which is near $1 5,561,000 per year advantage over fed ex's cost structure the company owned 98 aircrafts which cost them from $20-$24 million per each one.
Airborne express established an alliance with the us postal service and introduced a deferred delivery service that enabled businesses to ship directly to consumers in 2001 and 2002 airborne launched its zone-based, one-to-seven day delivery service. Rename again itself airborne express 1988 - became the first air express carrier to provide same-day delivery, through its purchase of sky 2003 -airborne ground operations acquired by dhl for 11$ billion as one of the top 3 companies in the industry. The delivery time of airborne express is one hour and half delay than fedex that makes airborne express more flexibility that could pick up the packages thirty minutes late than fedex pickup time the delivery quality of airborne express is hard to compete with ups and fedex, airborne is 96% and ups and fedex are 99% or higher.