Airport Seeking More Air Cargo Operations

Airport leaders not content with modest gains in air cargo in recent years are trying to entice more cargo carriers to Indianapolis International.

One big focus of their conquest: cargo firms at Chicago O’Hare International Airport.

Armed with slide presentations, airport managers show carriers and freight-forwarding companies screen after screen of data on how much they can save by operating at Indianapolis.

Save $240,000 in annual landing fees on a Boeing 747 freighter. Save $7.4 million annually in fuel. Spend less time in customs and avoid highway congestion. On and on it goes.

So far, no bites.

“It’s a long harvest time. It’s about a two- or three-year period, per se,” said Patrick Dooley, airport director for BAA Indianapolis.

Dooley made expansion of cargo operations one of his goals when he was tapped as airport director in 2003.

He points to the years it took to cultivate the meteoric growth of Northwest Airlines in Indianapolis, which has added dozens of flights to become the busiest airline here. Talks with Northwest began before the 2001 terrorist attacks.

“We’re developing good relationships” in cargo, he said.

Dooley and his team are particularly interested in those shipping to and from China. That nation currently receives 6 percent of air exports from Indiana. That number, though small, grew 108 percent last year, according to the airport management firm.

When all exports are considered. by air and sea, China is Indiana’s eighthlargest destination. growing 25 percent last year to $294.4 million, according to the Center for International Business Education and Research at Indiana University.

Air cargo to China is 10 times greater than a decade ago, Michael Ducker, an executive vice president of FedEx, said in a presentation about China.

Airport officials won’t say whom they’ve courted in the cargo realm.

“We’re casting a pretty broad net,” said BAA spokesman Dennis Rosebrough. “We’re clearly looking at foreign flag air carriers” along with domestic cargo firms.

Chicago O’Hare boasts cargo tenants, including American Airlines Cargo, DHL, Emery, Kalitta, Nippon and UPS.

Dooley said Indianapolis has plenty of acres for cargo facility development – in addition to the former postal air hub, part of which is now used to transfer ground mail.

Despite its dearth of cargo operators as of late, Indianapolis International ranks as the nation’s seventh-largest cargo airport and 20th-largest worldwide. Total cargo-inbound and outbound- totaled 1.06 million tons last year.

Total outbound cargo grew 6.7 percent last year. Not bad, but it’s far from the double-digit annual gains, as high as 34 percent, the airport enjoyed in the late 1990s.

Of the $5.1 billion in goods Indiana companies exported last year, 29 percent went by air, according to Indiana University. In the $299 million Indiana pharmaceutical export category alone, in the first quarter 68 percent of all pharmaceuticals were shipped by air.

“Every business that we’ve talked to whether it’s a distribution business or an office, from time to time they have a need for air cargo,” said Greg Schenkel of the Central Indiana Corporate Partnership.

He knows of one biotech firm that located near the airport specifically so it could quickly ship tissue samples through FedEx’s hub.

With the closing of the postal air operation five years ago, virtually all air cargo is moved by FedEx, which has its secondlargest U.S. hub in Indianapolis and employs more than 3,500 people here.

The hub does not yet fly cargo directly to Asia from Indianapolis, rather via FedEx’s Anchorage, Alaska hub. That traffic consists of three inbound flights and two outbound flights per day.

The recent relocation of Interstate 70 farther from FedEx’s Indianapolis hub gives it more room to grow.

“We’re continuing to evaluate market factors and will determine when to do that,” said FedEx spokeswoman Paula Bosler.

The busier the cargo operations, the more the Indianapolis Airport Authority collects in landing fees. Cargo planes bring in more than $7.5 million annually in landing fees vs. $8.9 million for scheduled airlines.

Stoking airport revenue is more important than ever as the Airport Authority begins constructing a midfield terminal to open in 2008 at a cost of $974 million.

Copyright IBJ Corporation Jun 20, 2005