Texas airports hot with growth

There’s good news in the air cargo world. Just three weeks into British Airways Boeing 787 launched service on March 3 between Austin–Bergstrom International Airport (ABIA) and London Heathrow (LHR), IAG Cargo realized an 88 percent load factor. On May 1, the carrier increased the service from five flights weekly to daily. This will provide even more opportunity for cargo movement, say IAG Cargo and British Airways officials. British Airways represents Austin’s first ever non-stop, long-haul service across the Atlantic. IAG Cargo, which handles the cargo for British Airways and Iberia, operates as one of the largest cargo networks in the world, “This is a fantastic opportunity for our customers since Austin adds a third station in our Texas network,” exclaims David Shepherd, Global Head of Sales - IAG Cargo. “It’s probably one of the most successful launch routes we’re ever experienced.” IAG Cargo attributes the success to very high loads on both outbound and inbound flights. Helping is a diverse commodity mix that includes items such as Norwegian salmon, fashion items, and engineering spares flying on the inbound; fruits/vegetables, computing equipment/high tech components, pharmaceuticals, and oilfield equipment outbound. “The Austin market is very well known for its high tech production,” Shepherd says.

A report by IAG Cargo indicates that the top export markets from ABIA are London (30 percent), Brussels (20 percent), and Amsterdam (19 percent). Besides Austin, British Airways flies to Houston and Dallas – robust Texan markets for the carrier where it has had a presence for some time. “Those markets represent very good business models, and Austin has been one of the best markets for new cargo capacity for us in the last 10 years,” states Joseph Le Beau, vice president commercial, Americas Cargo, British Airways. Part of the reason for Austin’s quick success is that much of the cargo boarding the British Airways’ Austin flights comes from Dallas. “We are waiting for the Austin market to mature for both exports and imports,” comments Le Beau. “Right now 30 percent of our inbound loads stay in Austin, but it was zero in the beginning.” Dallas/Fort Worth International Airport (DFW) and George Bush Intercontinental/ Houston Airport (IAH) are strong passenger and cargo markets. Consequently, there’s great competition coming from the host of carriers operating in those markets. “We have a nice niche here with the only traffic operations in Austin at the moment,” Shepherd explains. British Airways hopes that by being the “first in” at ABIA it has an advantage. The carrier was “first in” for long haul flights in San Diego and Phoenix and enjoys advantages in those markets. “Even on the inbound, we now are seeing a significant uptick of cargo from around the globe using our network to target Austin as a final destination,” Le Beau comments.

“The plus to ABIA is Austin, itself, is big market,” adds Shepherd. In fact, for four years in a row, Austin has topped Forbes magazine’s list of America’s fastest growing cities. Part of the reason is Austin’s multitude of startups and large corporations like Whole Foods and Dell. The opportunity for passenger traffic also is strong. “This gives Austin manufactures not only their own route into Europe, but access to our network beyond Europe and into Asia,” Shepherd remarks. “Austin has never had this before. That’s why we are reaping the rewards.” DFW Benefits from Service Mix Freighter traffic at DFW has been slightly up and down, although overall its international cargo traffic during 2013 was up 2.1% over 2011 levels. While DFW experienced some softness in Asia cargo traffic, growth came from a variety of sources. For starters, freighter operators began inaugural service to Dallas over the last few years: ANA to Tokyo, Cargolux to Luxembourg, Cargolux Italia to Milan and Mexico City, and Asiana Cargo to Seoul. In late March, AirBridgeCargo also began twice-a-week service to Amsterdam from DFW that continues onto Moscow. DFW has also benefited from freighter service by UPS, FedEx, DHL, China Cargo Airlines, Korean Air, Cathay Pacific, China Airlines, Eva Air, Lufthansa, and Singapore Airlines. “It’s clear that cargo airlines recognize that, even when they need to re-trench, this is one of those markets that they do not want to leave,” comments Mark Thorpe, assistant vice president, Air Service Development, DFW. DFW benefits from a huge increase in freight trucked from the Northern Mexico maquiladora region. According to Thorpe, freighter operators also find DFW attractive for shipments going to Mexico. Korean Air flies to Guadalajara from DFW as does Lufthansa and Cargolux Italia with flights to/from Mexico City. “Traffic out of Mexico has been a component of our sustained air cargo growth at the airport,” he says. The most important driver of air cargo growth at DFW, however, is American Airlines’ continued passenger flight expansion to South America (Lima and Bogotá) and Asia (Seoul Incheon International Airport or ICN). In June 2014, American Airlines will introduce flights to Shanghai and Hong Kong. There’s also opportunity for perishables traffic through the 1,800 square-foot refrigeration facility American Airlines opened at DFW in 2012. Already there’s talk of an expansion. In addition, Emirates now offers seven flights per week to DFW. “We will get 10 more flights to the Arab Gulf by the end of the year,” Thorpe adds. “Qatar Airways will begin daily non-stop service in early July to Doha, Qatar. Etihad Airways will begin flying on Wednesdays, Fridays and Sundays from DFW to Abu Dhabi starting in December 2014.” Both Eithad and Qatar will operate Boeing 777-200LR on these routes. Qantas Airways also announced that its DFW to Sydney service will be served with the Airbus A380 superjumbo aircraft starting September 29. The upgrade to the Qantas A380 will mean that the longest scheduled commercial flight in the world will now be served by the largest passenger jet in the world. Emirates will also commence its first scheduled Airbus A380 service at DFW starting October 1^st. The service will connect DFW to Dubai in the United Arab Emirates. IAH Benefits from Oil and Gas Industry Houston Airport System (HAS), which is anchored predominately by IAH, saw cargo volumes ending in 2013 with 426,877 metric tons handled, 2.3 percent decrease from 2012 volumes. Domestic freight, which, at 211,292 metric tons, represented slightly less than international freight (215,585 metric tons), showed a small decrease. International cargo remained flat. Authorities there, however, contend that with new global oil and gas developments and increased demand for oil and gas equipment and machinery, tonnage should pick up this year. At 35 percent, Europe represented the largest market share of the cargo handled at IAH. Europe, Africa and Asia showed a growth of approximately 3 percent, thanks to new scheduled service from carriers such as Lufthansa Cargo to Manchester, England and new charter flights like Atlas Air for Etihad Cargo to Luxembourg. Brazil remains Houston’s No. 1 air cargo trade partner in the Americas with approximately 6,400 metric tons handled in 2012, the latest available figures. This represents 4,269 metric tons of exports and 2,128 metric tons of imports. Most exports are equipment and machinery related to the oil/gas industry. Charter traffic is healthy at IAH with 22,127 metric tons handled in 2013, a 152 percent increase. Again, most was for oil and gas machinery to destinations around the world. A number of new services have commenced at IAH. Turkish Airlines began nonstop flights between IAH and Istanbul’s Ataturk International Airport (IST) on April 1, 2013. Prior to its inaugural flight, Turkish Airlines increased its four flights per week to six. In April 2014, it began daily service between the two destinations. Air China launched nonstop service to Beijing’s Capital International Airport (PEK) in 2013. Within 10 months of the July 11, 2013 launch, the carrier increased that service to daily, effective March 30, 2014. The Houston-Beijing nonstop service represented the first market expansion undertaken by Air China in more than 30 years. Also this year Korean Air initiated nonstop service to ICN, beginning May 2. Originally announcing four flights per week, the airline quickly adjusted its schedule to daily service. US carriers have also increased their frequencies. United Airlines added a second frequency to Tokyo-Narita and launched nonstop daily service to Munich, Germany. These new services are critical for belly freight cargo movements. A critical component at IAH is its Cargo Center that offers apron capacity to park 20-wide body freighters, federal inspection services and a fumigation center. Covering 120 acres, the Cargo Center has more than 600,000 square feet of on-airport warehouse space. IAH also has a 60,000 square foot perishables center with a 12,000 square foot cooler for time- and temperature-sensitive freight.