What drives growth?
Are airports catalysts for growth or does economic development drive airport growth? Both come into play, and usually it’s a case of available land.
Air cargo consultant Michael Webber says it’s the classic case of the chicken or the egg. He says both airports and their surrounding areas can be catalysts for growth, depending on the environment.
“There are cases such as Memphis, where the airport has been a catalyst for development that otherwise wouldn’t have occurred there,” Webber says. “In other markets such as in Chicago and New York, the big reason the airport grew is that the economy grew.”
Webber says freight integrators at hubs such as Chicago Rockford International Airport and LA/Ontario International Airport in Los Angeles have provided economies of scale by bring all the working parts with them, creating growth out of thin air.
“With all of that, you then start to get the additional layers of development around airports,” Webber says. “Some airports have the benefit of ample land such as Pittsburgh or Kansas City, and they are able to take on development that wouldn’t fit the purpose at a JFK or a Miami, where local economic development has been brought up right to the fences.”
Webber says many airports are populated with a lot of legacy cargo facilities that are not well-suited to next-generation users. He says the number of surplus cargo facilities is at an all-time high.
“At some point, rather than backfill, they may need to take down these facilities and get them out of their inventory,” he says. “A lot of legacy space isn’t well suited to current or future users and at some point, airports will be making some tough determinations. There is no next Emery Worldwide or Airborne Express out there. Those market shares have migrated to UPS and FedEx.”
Calgary, Alberta, is one region where there is clear evidence airport expansions have spurred surrounding growth. Calgary International Airport is not ranked among the world’s top cargo airports, but it is in the midst of a major expansion, which began in 2011. When the CAD$2 billion (U.S.$1.9 billion) project is complete in 2015, Calgary will have, among other things, the longest runway in Canada at 14,000 feet (4,267 meters).
The expansions include several new cargo-related facilities. Keith Stanley, cargo and logistics manager at the airport, says cargo facility expansions include the recent opening of an additional cargo apron for larger code D and code E aircraft, which gives easy access to runways.
“We’re also working with our courier partners, FedEx, UPS and Purloator, and we finished an apron expansion that extends a new vehicle service road,” Stanley says. “We are also in the process of planning a new multi-purpose cargo facility, primarily allocated for outsize cargo. That will be 30,000 square feet in addition to what we already have, and it should be open by mid-2014. We have a lot of live animal movement including cattle and equestrian horses.”
Stanley describes the Albertan cargo market as stable in recent years, with no huge growth or decline.
“We saw a slow down, but not as bad as other points,” Stanley says. “Our cargo is mainly oil- and gas-related. This area manufactures a lot of heavy machinery for energy fields globally. It’s similar to Houston in that sense. There is a lot of expertise going into this machinery that goes overseas. Most of it is airfreighted because of the nature of the beast. Time is of the essence.”
Tom Dixon, business development manager for Calgary Economic Development, is among those who like to use the term “aerotropolis.” He agrees with the concept that unique synergies surrounding an airport can effectively create a new city.
“It’s all about that in Calgary for sure,” Dixon says. “The airport growth comes down to a lot more than the expanded runway. The runway will add tremendous capacity, but it’s about synergies in the northeast quadrant of the city that focuses on and radiates out, from the airport.”
Dixon says the government has invested in ring-road infrastructure in Calgary that puts the airport at the center of the first phase of ring-road development.