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PAT KIERNAN, CNNfn ANCHOR, THE MONEY GANG: In the big race between overnight shipping companies, Airborne (URL: http://www.airborne.com/) is battling FedEx (URL: http://www.fedexcorp.com/) and UPS (URL: http://www.ups.com/) . to deliver the goods.

ALI VELSHI, CNNfn ANCHOR, THE MONEY GANG: For the first time in nearly 20 years, the company has a new CEO and chairman. Carl Donaway joins us now to discuss Airborne and its place in the shipping sector. Is it like a Supreme Court seat when you get a chairmanship at Airborne?

CARL DONAWAY, CEO & CHAIRMAN, AIRBORNE: Once they come in, they don`t want to leave. They love the company, they love what they are doing. You really just have to kick them out. So it doesn`t happen very often.

KIERNAN: Looking at the stock chart earlier today in preparation for this interview. When you consider what has happened with airport security and with the economy, there seem to be a number of things that would stand in the way of this kind of growth in a stock price. What`s the secret?

DONAWAY: I think the first thing is we are probably one of the best-kept secrets in the stock market or in the business industry in total. We`re a Fortune 500 company. We do business with 60 percent of the Fortune 500. We don`t advertise, so a lot of companies don`t know who we are.

But the biggest corporations in the United States know exactly who we are. We really are the carrier of corporate America. And we craft these programs for the biggest corporations and it`s based on a very sound value proposition. Great price, wonderful performance and backed by solid people.

KIERNAN: There are a lot of companies that are set up so that you are their carrier of choice, and - what sort of a break on pricing do they get from what somebody might pay at retail?

DONAWAY: It`s hard to say, because each of our programs is uniquely constructed for the customers. There`s ultimate flexibility in setting the service levels that they would like to have.

KIERNAN: What`s the deepest discount you`d give somebody?

DONAWAY: It depends. Some of the biggest customers may have 10 to 20 percent below the prevailing rate. It really depends on the mix of shipments. But clearly there`s a compelling price advantage when you do business with us.

VELSHI: What`s different about what you offer compared to if they got a deal with FedEx or UPS.?

DONAWAY: Well really we are the carrier for corporate America. We build unique programs for each of our customers.

So if you look at the biggest customers, the IBM (URL: http://www.ibm.com/) , or Dell (URL: http://www.dell.com/) the biggest banking institutions, Bank of America and others, we come in and sit down and create a unique program with a special just for you.

Then we price it accordingly. So it`s a real hands-on flexible approach.

KIERNAN: As you work out these relationships with customers, are there concerns on their part that they end up being more familiar with some of the bigger players and would lean toward them or are you able to satisfy those that Airborne can take care of all of those needs?

DONAWAY: It comes down to initially the brand awareness of our two biggest competitors is a significant issue, not so much with the professional transportation buyers. It`s really the people within those companies saying, why are you making this change.

And about 30 days after making the change they`re saying, what took you guys so long? Because this is great, the service is outstanding, the price is wonderful and the customer service is really first rate.

VELSHI: How do you compete on the retail side where the brand awareness does matter and FedEx and UPS have such a great edge?

DONAWAY: We try to partner up with others. For example, OfficeMax (URL: http://www.officemax.com/) , we`ve signed an agreement with them. They have approximately 970 locations across the United States.

VELSHI: So they`ll have boxes and things.

DONAWAY: They`re going to build out shipping centers in their facilities. It`s great because the medium of a smaller customer can walk in the door to pick up their office supplies and do business with us at the same time. National postal centers very similar to the MBE Group.

They`re independent, we work with them. And there are several other channels we are using to get to the small and infrequent segment, using their brand as opposed to the stand alone Airborne brand.

KIERNAN: I mentioned airport security. Customs is tighter than it was. A lot of security-related issues. That can stand in the way when you are on these overnight deadlines. Has it been a factor that`s slowed you down in the past few months?

DONAWAY: No, actually one of the advantages have is we own the largest privately owned airport in the United States. We own it outright, 2200 acres. That gives us incredible control over the security and the way we run that facility. So we really haven`t seen a slowdown as a result of the enhanced security. We`ve always had a very tight security profile.

VELSHI: It`s a rapidly changing industry. It has seen a lot of change in the past few years especially recently with events after September 11th and anthrax scares and things like that. What are advantages to having a company where top-level management doesn`t change very much? Is that a disadvantage sometimes?

DONAWAY: I think you can make the case either way. But I think in the long haul having the continuity especially with the corporate culture we have, which is really focused on our shareholders, our customers and our employees, I think that`s essential.

If you look at where we`ve been over the last year, we`ve improved our operating performance, 8.1 percent in operating costs, 8.5 percent in productivity. We`ve introduced a new ground service, which has been extremely well received by the marketplace. I think having the continuity of management and an overall strategic vision for the company is extremely important.

KIERNAN: Carl Donaway is the chairman and CEO of Airborne Inc., Carl, thanks for being here.

DONAWAY: Thank you.

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