New 401k letter

August 7, 2003

Dear ABX Air Employee:

As part of the separation of ABX Air from Airborne Express, your account balance in the Airborne Express Capital Accumulation Plan (CAP) will automatically be transferred to your new ABX Air, Inc. Capital Accumulation Plan (CAP).

First and foremost, we would like to welcome you to the new ABX Air CAP! We are pleased to announce the new Plan will offer virtually the same savings opportunity, same base company match, same investment options, and same service features from Fidelity Investments^® that you have enjoyed in the Airborne Express CAP. Please read this letter to learn how this transition may affect your account during this month.

At this time the exact date of the transfer of your account balance is not known. It is expected your account balance will transfer to the new plan on or before the Separation Date (the date ABX is separated from Airborne).

Your Payroll Deduction Percentage

Your current payroll deduction will continue at the rate you have elected in the Airborne Express CAP. For example, if you have elected a payroll deduction of 6% for contributions to your account in the Airborne Express CAP, that 6% will remain in place for your deferrals in the ABX Air CAP unless you request a change before the separation date. To make changes to the percentage you contribute and where these deductions are invested contact Fidelity at www.401k.com or (800) 835-5095.

Your Investment Elections for Contributions

The investment options you have elected for your contributions will remain in place for the new ABX Air CAP, with the exception of the Managed Income Portfolio II.* For example, if your elections are 50% Fidelity Growth Company Fund and 50% Fidelity U.S. Bond Index Fund for your contributions, those elections will remain in place in the new ABX Air CAP unless you change your elections. To make changes to your investment elections for future contributions in the contact Fidelity at www.401k.com or (800) 835-5095.

* If you are a participant in the Airborne Express CAP and elected the Managed Income Portfolio II (fund code 00633) for any of your contributions, that portion of your contribution will automatically be directed to the Managed Income Portfolio (fund code 00632) beginning after the Separation Date.

*On the transfer date, any contribution elections currently directed to:*		*Will automatically be directed to:*
Managed Income Portfolio II	ê	Managed Income Portfolio

Your Airborne Express CAP Account Balance

The balance you hold in the Airborne Express CAP will remain in that plan until the separation date. During the transition, your account balance will remain invested in the investment options you hold currently, with the exception of any account balance invested in the Managed Income Portfolio II, which will be transferred to the Managed Income Portfolio on separation date. You can request investment exchanges (transfers) among the investment options in your Airborne Express CAP account prior to the separation date otherwise your balance will be transferred to the new plan accordingly. You can view your account balance or request investment exchanges (transfers) among the investment options by contacting Fidelity at www.401k.com or (800) 835-5095.

*On transfer date, any account balances in:*		*Will automatically be invested in:*
Managed Income Portfolio II	ê	Managed Income Portfolio

The effective date of Plan changes and the end of the transition period depend upon the transfer of data. To ensure accurate data transfer, the delivery of services and investment options described in this brochure could be delayed.

Note: The Managed Income Portfolio II (MIP II), available in the Airborne Express CAP, is an investment option that has requirements on the dollar amount that must be maintained in the fund; this minimum-required dollar amount allows the fund to offer a lower management fee of 0.35%. The new ABX Air CAP does not qualify for the MIP II and will transfer balances from the MIP II to the Managed Income Portfolio (MIP), which has no dollar amount requirements. Currently the MIP management fee is 0.55%. A description of the MIP is included on the next page. For more information about this investment option, contact Fidelity at (800) 835-5095 or www.401k.com.

New Investment Option Description

Managed Income Portfolio

Fund Code: 00632

What It Is: A stable value fund (not a mutual fund). It is a commingled pool of the Fidelity Group Trust for Employee Benefit Plans and is managed by Fidelity Management Trust Company (FMTC).

Goal: Seeks to preserve your principal investment while earning interest income. The fund will try to maintain a stable $1 unit price. However, the portfolio cannot guarantee this stable unit price, and its yield will fluctuate.

What it invests in: The portfolio invests in investment contracts issued by insurance companies and other financial institutions, and in fixed income securities as further described below. A portion of the portfolio is invested in a money market fund to provide daily liquidity. Investment contracts provide for the payment of a specified rate of interest to the portfolio and for the repayment of principal when the contract matures. Participant withdrawals and exchanges are paid at book value (principal and interest accrued to date) during the term of the contract. Some investment contracts are structured solely as a general debt obligation of the issuer. Other investment contracts ("wrap contracts") are purchased in conjunction with an investment by the portfolio in fixed income securities, which may include U.S. Treasury bonds, corporate bonds, mortgage-backed securities, asset-backed securities, and bond funds. There is no immediate recognition of investment gains and losses on the fixed income securities. Instead, the gain or loss is recognized over time by adjusting the interest rate credited to the portfolio under the wrap contract. All investment contracts and fixed income securities purchased for the portfolio must satisfy the credit quality standards of FMTC. The investment contract and fixed income security commitments are backed solely by the financial resources of the issuer. In addition, investment contract issuers may impose a contract penalty on withdrawals or exchanges from the portfolio caused by an extraordinary corporate event (layoff, sale of a line of business, etc.). Units of the portfolio are not guaranteed by FMTC, the plan sponsor, or insured by the FDIC. The portfolio strives to maintain a $1 unit price, but cannot guarantee that it will be able to do so, and its yield will fluctuate.

Loan Balances

If you have an outstanding loan in the Airborne CAP Plan, the loan balance will be transferred to the ABX Air CAP Plan. Repayments to the loan will continue to be deducted from your check and posted to the ABX Air CAP Plan.

One-Day Blackout

Once your balance transfers to the ABX Air CAP, there will be a one-day period when you will not be able to request a change to your payroll deferral percentage, a change to future investment elections, a withdrawal, a loan, or transfers (exchanges) among your existing investment options. This blackout day will be the day after the transfer date and will allow Fidelity and ABX to audit the accounts.

When the transition period ends after the one day blackout, you will have complete account access to your new ABX Air CAP through NetBenefits^SM online at www.401k.com and the Fidelity Retirement Benefits Line at (800) 835-5095. When accessing your CAP accounts online after the transition is complete, you will see listings for both the old plan ("Airborne Express CAP," plan number 28000) and the new plan ("ABX Air, Inc. CAP," plan number 28033). Your Airborne Express CAP will have a balance of $0 because those funds will have transferred out of the plan; however you will still have access to that account so that you can generate online statements and view the history of the account if desired. Your new ABX Air CAP account will list your investments and balances as of transfer date, but you will not be able to generate reports for periods that occurred prior to the transition date from the new account.

Please contact Fidelity at (800) 835-5095 or Kathy Eversman, Benefits Coordinator, at (800) 736-3973 ext. 2463 if you have any questions regarding this transition.

Sincerely,

Joe Hete

President and COO

ABX Air, Inc.

Unless otherwise noted, transaction requests confirmed after the close of the market, normally 4 PM Eastern time or on weekends or holidays will receive the next available closing prices.

Managed Income Portfolio is not a mutual fund and is managed by Fidelity Management Trust Company.

The investment options available through the plan reserve the right to modify or withdraw the exchange privilege.

Fidelity Investments Institutional Services Company, Inc., 82 Devonshire St., Boston, MA 02109

Revised: January 14, 2005.