Anchorage Airport Expects 4 Percent Cargo Growth in 2004

December 29, 2003

Anchorage Airport Expects 4 Percent Cargo Growth in 2004 
Alaska Journal of Commerce, AK


Ted Stevens Anchorage International Airport is positioned for growth in 2004 
and beyond.

The airport is on track to open a new $223 million concourse in the summer, and 
a recent FAA cargo bill sets the table for big business in the years ahead.

Airport Director Mort Plumb said cargo growth at the airport has averaged about 
6 percent over the last five years.

What's the outlook for 2004?

 
"I would feel comfortable with a 4 percent increase in air cargo next year," 
Plumb said.

On the passenger side of business, tourism will remain a big driver in the 
Alaska economy.

"Last year was a little soft in the tourist industry," Plumb said. "I would 
feel comfortable with a 1-1.5 percent increase over 2003."

On the cargo side, the Federal Aviation Administration reauthorization bill 
recently signed by the president should benefit Anchorage and Alaska.

It expands cargo transfer opportunities and increases FAA funding for cargo 
airports.

"By the end of the year we may have people taking advantage of that, and I 
think that will build over the years," Plumb said.

Plumb has been working on the cargo transfer law since 1995.

"This was an Alaska issue supported by Alaskans," he said. "It's going to yield 
good benefits in the years ahead."

The new cargo rule could mean about $13 million in FAA money for Anchorage 
airport development, up from $10 million last year.

"It commits more dollars to provide a better infrastructure to stay 
competitive," Plumb said.

Last summer the airport completed a $26 million reconstruction and 
reinforcement of its north-south runway, helping Anchorage to remain 
competitive in the global marketplace, especially with China coming into the 
World Trade Organization.

Anchorage will be able to handle the giant new Airbus 380 cargo jets now under 
construction. Federal Express is due to take delivery of three A380s in 2008 or 
2009, and previously announced plans to use the A380 in Anchorage.

The A380 wingspan is 30 feet wider than a 747.

"We are right on track with being able to handle them when they come in," Plumb 
said. "We are ahead of many airports with our Group 6 (largest aircraft) 
infrastructure preparation."

Looking ahead, Plumb said commerce with China could be significant. Last year 
UPS secured six landing days in China, and seven airlines based at Ted Stevens 
fly directly into China.

"There's no doubt that our future is tied very closely to China, economically," 
Plumb said.

Airport Marketing Director Linda Close also said the Alaska-China connection 
could boost commerce.

"I think that opens up opportunities for our local businesses to sell products 
to that market that were not available before," Close said. "It's going to 
create jobs in Alaska and jobs in the Lower 48."

Turning to security issues, Plumb said confidence has returned to the skies 
since 9-11.

"I think on balance the American traveling public is comfortable from a 
security perspective," he said. Fairbanks International AirportThe loss of Air 
France still stings in Fairbanks, said Dave Carlstrom, the airport's director 
of marketing.

"We are yet in grief over our loss this past April of Air France freighter 
operations," Carlstrom said.

Air France had been stopping in Fairbanks for 11 years for fuel and crew 
changes, providing $12.5 million a year in direct economic impact.

Air France now overflies Fairbanks after buying three new 747-400 Extended 
Range Freighters, able to fly non-stop between Paris and Japan across Siberia 
with an economic payload in both directions.

"In our small world that took out almost a third of our intercontinental wide 
body cargo operations," Carlstrom said. "That's left a sizable hole in 
operations."

Without Air France, Fairbanks is down to about 23 weekly cargo flights, from 33.

The biggest impact of Air France was in fuel purchases.

"That was a real setback," Carlstrom said.

As Fairbanks absorbs that body blow, it continues to troll for new carriers, 
though there is nothing imminent on the horizon as an Air France successor, 
Carlstrom said.

Meanwhile, on the passenger side of business, the 2004 forecast is not clear.

"The short answer there is, who knows," Carlstrom said.

Driving passenger commerce will be summer tourism and military activity.

"Insofar as that's healthy and robust, so will be our passenger traffic," 
Carlstrom said.

Another business factor will be moves by the airlines themselves. Alaska 
Airlines currently offers the only year-round service between Fairbanks and the 
Lower 48.

"The element of demand here is highly elastic," Carlstrom said. "If the prices 
are right, people will go. The right offer will get them packing."

On the international passenger front, Fairbanks is looking forward to its 
fourth season of weekly summer Condor Thomas Cook service, non-stop from 
Fairbanks to Frankfurt, Germany.

"That's been a great boon to providing access to Interior Alaska for primarily 
German-speaking European visitors," Carlstrom said. "It's done a lot to put us 
on the international destination tourism map."

There were more than 1,000 passengers on the Condor flights last summer - not a 
huge economic impact, but a market with a tremendous upside, Carlstrom said.

Another international niche for Fairbanks could be Japan. About 1,000 visitors 
come from Japan in the winter, mainly to view the Northern Lights.

"We're pursuing direct air service between Japan and Fairbanks to support that 
market," Carlstrom said.

Finally, the intrastate market between Fairbanks and the Bush in 2004 will be a 
real jumble as new postal service rules on bypass mail take effect, Carlstrom 
predicted.

"Who can say how the dust will settle," Carlstrom said. "Undoubtedly there will 
be winners and losers among the Fairbanks-based commuter carriers."


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