ABX Air Reports Third Quarter Results.

Notes Sharp Increase in Charter Segment Revenues

WILMINGTON, Ohio -- ABX Air, Inc., (NASDAQ:ABXA) today reported revenues of $281.3 million and net earnings of $6.6 million, or $0.11 per share, for the third quarter of 2006. Revenues for the third quarter of 2005 were $369.9 million, with net earnings of $7.4 million, or $0.13 per share.

In May 2006, ABX Air's largest customer, DHL, assumed management of its line-haul trucking operations from ABX Air. Those operations contributed $74.8 million in revenues and $1.3 million in net earnings to ABX Air's results for the third quarter of 2005. In the third quarter this year, ABX Air also recognized a $257,000 impairment charge associated with aircraft released in August from service for DHL.

ABX Air's expanding non-DHL air charter operations generated a 62% increase in revenues and a 70% increase in earnings for the third quarter, as it added a third Boeing 767 freighter aircraft in September. Revenues from ABX Air's other non-DHL operations rose slightly, but earnings declined due to startup costs associated with its new contracts to manage sorting centers for the U.S. Postal Service.

For the first nine months of 2006, ABX Air's revenues were $954.1 million, and its net earnings were $21.1 million, or $0.36 per share. For the first nine months of 2005, revenues were $1.07 billion and net earnings were $21.2 million, or $0.36 per share.

"We are achieving excellent service levels and have been very successful in controlling our costs for DHL," said President and CEO Joe Hete. "A recent independent study demonstrates that DHL's on-time delivery rates compare very well with its major U.S. competitors, thanks in large part to the service provided by our dedicated ABX Air employees. DHL senior management recently came to Wilmington, Ohio, to express their appreciation to our employees and others who contributed to that excellent service performance. At that event and in other ways, DHL has reaffirmed its commitment to the U.S. market, and to working closely with ABX Air and its other U.S. partners to provide the most dependable shipping service available," said Hete.

Hete also said that ABX Air continues to profitably deploy the Boeing 767 freighters it agreed to acquire last year. Three of those aircraft were in service at the end of September 2006, and a fourth will arrive late in the fourth quarter. Six more are expected to enter service during 2007, and the final two in 2008. "Customer demand for these aircraft remains strong, and we are pleased to see that during the last two quarters they have contributed the double-digit operating margins we projected when we acquired them," Hete said.

Results Associated with the DHL Agreements

ABX Air's net earnings from its two commercial agreements with DHL were $3.6 million during the third quarter of 2006, down from $5.2 million in the third quarter of 2005, due primarily to DHL's decision to directly manage its truck line-haul operations.

ABX Air has two commercial agreements with DHL: an aircraft, crew, maintenance and insurance (ACMI) agreement, and a Hub Services agreement. Under each agreement, ABX Air earns a base mark-up of 1.75% on eligible costs, and has the opportunity to earn incremental mark-ups for meeting certain quarterly cost goals, as well as annual cost and service goals.

Third quarter results included $2.8 million in earnings from the base mark-up, and $781,000 from incremental mark-ups. The latter represents approximately 78% of the maximum quarterly incremental mark-up possible under the two agreements.

"Our successful efforts to control costs and improve productivity while handling more shipment volume than anticipated led to good overall attainment of mark-ups under the two agreements," noted Hete. "At the same time, our on-time performance remains high."

Results from Non-DHL Operations

Hete noted that the rapid growth of air charter revenues in the third quarter reflects greater available capacity, and ongoing strong demand for ABX Air's services. Block hours flown for Boeing 767 aircraft in non-DHL ACMI service increased 68% in the third quarter of 2006 compared to the same period in 2005. "We continue to see strong customer demand for the 767s," he said. "We expect that on an annualized basis, each 767 freighter that we deploy will contribute, on average, about $1.0 million to our operating results. The operating margin we have attained from the 767's over the last two quarters meets our targets," said Hete.

ABX Air absorbed $224,000 in losses due to start-up costs at the two U.S. Postal Service (USPS) regional sort facilities that it began managing in September. As a result, other non-DHL earnings declined by 9% in the third quarter, compared to the third quarter of 2005. The new sorting operations in Memphis and Dallas are expected to start contributing to ABX Air's earnings beginning in 2007. Each facility is projected to generate approximately $5.0 million in annual revenue after reaching full capacity.

Outlook/Other Items

Annual Mark-up Potential under the DHL Agreements:

The two commercial agreements with DHL allow ABX Air to earn additional cost-related and service mark-up revenues based on its performance against annual goals, in addition to quarterly cost-related mark-up. Mark-up revenues for performance against annual goals are realized in the fourth quarter.

While the results through the first nine months are not necessarily indicative of full year performance, as of September 30, 2006, ABX Air was on pace to achieve 100% of its ACMI maximum for full-year cost-related performance, but none of the annual incremental cost-related mark-up under its Hub Services agreement. The maximum amount of annual cost-related mark-up on eligible costs available in both agreements is approximately 0.81%.

On the same projected basis, ABX Air was on pace to achieve annual mark-up for performance against service goals equal to 80% of the maximum available under the ACMI agreement and approximately 60% of the maximum under the Hub Services agreement. The maximum annual service mark-up available in the ACMI agreement is 0.25%; the maximum service mark-up available in the Hub Services agreement is 0.75%.

Aircraft Released by DHL:

In August of 2006, twenty-one aircraft (11 DC-9s and 10 DC-8s) were released from service under the ACMI agreement. Eight (DC-9s) of the 21 aircraft will continue to have their depreciation reimbursed by DHL through their remaining depreciable lives. After having the remaining 13 aircraft appraised, management believes the Company can realize the highest return from either selling the aircraft or by operating them for other customers. Nine of the 13 aircraft are held for sale while four are being held for use. Additionally, ABX has three other aircraft that DHL previously released from the ACMI agreement. Two are held for sale and a third is held for use.

Conference Call

ABX Air will host a conference call to review its financial results for the third quarter of 2006 on November 10 at 10 a.m. Eastern time. Participants should dial [phone] and international participants should dial [phone] ten minutes before the scheduled start of the call and ask for conference ID #75113942. The call will also be webcast live (listen-only mode) via either www.abxair.com or www.earnings.com for individual investors and www.streetevents.com for institutional investors. A replay of the conference call will be available an hour after the conclusion of the call. It will be available by phone for five days after the call at [phone] (international callers [phone]); use pass code ID #81373040. The webcast replay will remain available via www.abxair.com or www.earnings.com for 30 days.

Except for historical information contained herein, the matters discussed in this release contain forward-looking statements that involve risks and uncertainties. ABX Air, Inc.'s actual results may differ materially from the results discussed in the forward-looking statements. There are a number of important factors that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, ABX Air's ability to maintain cost and service level performance under the commercial agreements with DHL, reductions in the scope of services under those agreements, the ability to generate revenues and earnings from the deployment of Boeing 767 freighter aircraft into non-DHL charter service and from the sort operations being performed for the U.S. Postal Service, and other factors that are contained from time to time in ABX Air's filings with the U.S. Securities and Exchange Commission, including ABX's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should carefully review this release and should not place undue reliance on the Company's forward-looking statements. These forward-looking statements were based on information, plans and estimates as of the date of this release. ABX undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

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Note: The results above for customers other than DHL do not reflect an allocation of overhead costs that are reimbursed by DHL. The provisions of the commercial agreements with DHL do not require an allocation of reimbursed overhead until such time as ABX derives more than 10% of its total revenue from non-DHL sources.