St Louis tries to remedy FedEx snub in China gain

LAMBERT-ST LOUIS International Airport hopes to atone for snubbing FedEx 25 years ago by gaining a prominent cargo carrier in China Cargo Airlines, a new player to the market.


The Missouri airport needs to build cargo volume to increase revenue which despite a US$1 billion expansion four years ago, flights has halved in the last decade.


"Cargo drives development; passenger traffic does not," airport director Rhonda Hamm-Niebruegge told the Memphis Commercial Appeal, the local newspaper for the FedEx global headquarters and hub.


In vying for China's attention it hopes to recover from its decision to reject FedEx, which according to Mike Jones chairman of Midwest China Hub Commission put them on the "wrong side of history".


Today's local ambition is to make the airport into a cargo hub, a central economic force and to position all commercial activities to feed into the airport, said authors of "Aerotropolis: The Way We'll Live Next", by business academic John Kasarda and editor of FedEx's Access Now, Greg Lindsay.


FedEx has achieved the creation of a central hub in Memphis, said Mr Lindsay who describes it as a "modern-day company town" generating 20,000 jobs.


But the big challenge for St Louis is to compete against FedEx's established air express model, said Mr Kasarda in the report. "Memphis has a 40-year advantage over St Louis in building the infrastructure needed to get freight out of the airport and on to its destination."


If Lambert-St Louis airport were successful in securing CCA, a subsidiary of China Eastern, it hopes the launch of three cargo flights a week will increase to as many as 30 by 2015, adds Ms Hamm-Neibruegge. China hopes to grow China-US air freight growth from 20 per cent to 50 per cent by 2015.


But lack of infrastructure could hamper their success and according to IATA spokesman Steve Lott growth in China-US air cargo is likely to slow, and if the Chinese take market share from an already "fragmented market" it is not clear who will come out on top.
(Source:http://www.schednet.com)