Airborne Posts Loss as Package Deliveries Decline

Though revenues increased 1.4% to $824 million compared to $812 million in the first quarter of 2000, operating expenses also rose, climbing 8.1% to $842 million compared last year. To cut costs, Airborne said it is reducing its capital spending plan for 2001 to between $200 million and $230 million, down from $260 million.

Airborne is launching several initiatives as it tries to gain revenue and market share. The first is a nationwide ground delivery service designed to improve the company's competitive position. Another is a new pricing structure that includes a rate increase and a migration to zone-based pricing to boost operating yields – both of which are being phased in throughout the year.

Airborne is also expanding its sales force and enhancing sales training and incentives to increase shipment volume and gain new business. The company also plans to add e-commerce and marketing alliances to attract the small business and infrequent shipper market.