Airborne Express was founded in 1946 and is one of the oldest express transportation companies in the United States. The company provides both domestic and international shipping services. Airborne Express has a strong focus on cost, which has allowed the company to compete effectively against larger rivals such as United Parcel Service (UPS).
In recent years, Airborne Express has been facing pressure from UPS and other competitors. To stay competitive, the company has been investing heavily in new technology and infrastructure. These investments have helped Airborne Express to improve its operations and continue offering low prices to customers.
Looking forward, Airborne Express is well positioned to compete in the express transportation market. The company’s focus on cost will continue to be a key differentiator in the market. Additionally, Airborne Express’ investments in new technology and infrastructure will help the company to maintain its competitive edge.
Even if it doesn’t have the same funding as its competitors, Airborne Express, an air express transportation firm, has managed to compete with big rivals such as Federal Express and United Parcel Service (UPS). It held third place in thesector in 1996, with 9% of the market.
This case study analyses how Airborne has managed to survive in the industry.
Airborne’s Cost Structure:
Efficient aircraft utilization is the key to Airborne’s low-cost structure. The company had one of the youngest and most modern all-cargo fleets in the industry, which was another important cost advantage. In addition, Airborne used a hub-and-spoke system, which helped it minimize its costs.
UPS as a Threat to Airborne:
In 1994, UPS took over Caliber System Inc., which was one of Airborne’s main competitors at that time. After the acquisition, UPS became Airborne’s biggest threat as it held about 30 percent of the market.
Despite the fact that UPS was a big company with more resources, Airborne managed to compete against UPS by offering lower prices and better services.
Even though Airborne is a smaller firm than its main rivals, it may still compete successfully with them due to its particular resources and capabilities. A company’s unique assets and key strengths can give it an edge over the others in terms of competition, which leaves room for small businesses like yours to compete against bigger companies.
Airborne has a large delivery network and efficient handling capabilities, which allow the company to offer its customers lower rates and faster service than its competitors. In addition, Airborne has a strong relationship with its customers, which gives the company an advantage in terms of customer loyalty and retention.
The key to Airborne’s success is its cost structure. The company has been able to keep its costs low by investing in technology and using a hub-and-spoke model for its operations. As a result, Airborne is able to offer its customers competitive rates while still making a profit.
Despite these strengths, Airborne faces some significant challenges. The company’s main competitors, UPS and FedEx, are much larger and have more resources. In addition, the courier industry is highly competitive and Airborne will need to continue to invest in its operations in order to stay ahead of its rivals.
Looking forward, Airborne Express has a number of options available to it. The company can continue to focus on cost reduction in order to compete on price. Alternatively, Airborne could focus on differentiation by investing in new services and technology. Finally, the company could pursue a combination of these strategies in order to build a more competitive business.
Airborne Express is the first and only airline to own an airport. Airborne acquired an airline in 1980 since to the restricted control, it has bought a carrier at Wilmington Airport. The airport subsequently became the focus of the business, with all company activities carried out there. It is also the United States’ largest privately owned airfield.
Airborne was the third largest express transportation company in 1986. The company had its own aircrafts and did not use commercial airlines.
The management of Airborne believed that their lower cost structure would help them to win in the marketplace. In fact, their costs were about 20% lower than the other two companies, United Parcel Service (UPS) and Federal Express (FDX).
Airborne used a combination of owned and leased equipment. In 1980, they owned only two Douglas DC-8s but by 1986 they owned nineteen and leased an additional fifteen. The average age of their fleet was five years, which was young compared to UPS’s and FDX’s fleets.
With the airport now under their control, Airborne is able to better manage operations. In addition, because Airborne doesn’t have to pay for any landing or service costs to the airlines business like its competitors, it doesn’t have to lease the airport from someone else. Federal Express and UPS own the planes but still need to rent the facility from a third party.
As a result, Airborne not only saves on the fees but also is able to enjoy the first mover advantage in terms of the infrastructure and resources.
In addition, Airborne has its own sorting facility which helps to speed up the process and cut down the cost as well. The company only needs 3 hours to complete the whole process from when the parcels arrive at the airport until it is ready to be delivered. On top of that, Airborne’s decision to focus on smaller packages also help to further reduce the processing time and cost.
The shorter turnaround time gives Airborne a significant competitive advantage over its rivals who usually take about 8 hours to sort and deliver their packages. This is possible because Airborne has invested in the latest sorting technology which is able to sort packages 3 times faster than the traditional methods.
Moreover, Airborne has been able to keep its cost low by focusing on niche markets that are not served by its rivals. For instance, Airborne offers same-day delivery service which is not provided by UPS or FedEx. This helps to differentiate Airborne’s services from its competitors and attract more customers who are willing to pay for the premium services.
Last but not least, Airborne has a well-established relationship with several major retailers such as Wal-Mart and Best Buy. These retailers provide a significant portion of Airborne’s business and help to generate stable revenue for the company. The close relationship also allows Airborne to offer special rates and services to these retailers which further increase its competitive advantage.