ABX builds non-DHL profits

ABX Air is finding that being independent is increasingly profitable, whether the former Airborne Express airline flies for DHL or not. The company reported a USD37 million net profit in 2004, nearly double the earnings for 2003, as the former Airborne Express air carrier saw revenue edge up to USD1.2 billion. The earnings included an USD18.1 million net profit in the fourth quarter on a 31 percent increase in revenue to USD361.4 million. Those earnings were spurred by an unexpected surge of package volume, up 29 percent over last year’s fourth quarter and 22.2 percent over third quarter 2004 totals. The strong financial report marked an important step in the airline’s path to independence since it was spun off from Airborne in 2003 following DHL’s purchase of the express operator. DHL accounts for the huge majority of ABX’s revenue but the airline said its non-DHL revenue grew from USD11.6 million in 2003 to USD26.7 million last year. It nearly quadrupled in the fourth quarter to USD12.7 million, thanks largely to postal business, and ABX says non-DHL business provided USD6.8 million in profits for the year. “One of our goals for 2004 was to significantly increase our revenue and net earnings from non-DHL business,” said Joseph Hete, ABX’s president and CEO. “We accomplished that goal by more than doubling both and have made excellent progress at building relationships with customers who can leverage our core competencies. We view 2004 as a successful first step at diversifying our revenue stream, while at the same time maintaining focus on providing value to our largest customer.” The carrier will continue to assist DHL’s efforts to build up its domestic market share “while also seeking opportunities to diversify our revenue,” said Hete. ABX will drop 26 aircraft from its fleet of 115 planes this year to match DHL’s budget planning assumptions. Current plans call for seven to be eliminated in the first quarter – three DC-9s and four DC-8s – with the remaining 19 to be removed by the end of the year.