"Big role for cargo at Alaska airport"

Sunday, June 27, 2004

Big role for cargo at Alaska airport
By Stephen Dunphy
The Seattle (WA) Times

 
ANCHORAGE - A half dozen wide-bodied jets line up on the taxiway waiting
at 9:30 on a recent morning for takeoff at the Ted Stevens Anchorage
International Airport. 

Most airports are busy in the morning. The striking difference here is
the jets are windowless cargo planes. Instead of passengers, these 747s
and DC-10s are stuffed with perishable foods, laptops and cellphones,
and high-fashion clothes headed for the racks that day. 

Here in remote Alaska, its biggest city has become one of the centers of
globalization. On polar routes, the airport is almost exactly the same
distance from Tokyo and New York and London. More than 600 cargo flights
a week glide onto its runways on routes to and from Asia, Europe and the
U.S. 

Anchorage wants to play an even larger role in the cargo industry. U.S.
Sen. Ted Stevens tucked a provision into last year's Federal Aviation
Administration reauthorization bill that allows cargo to or from a
foreign country to be transferred to another airline in Alaska without
being considered to have broken its international journey. 

Before, foreign airlines generally could not load cargo at one U.S.
airport and deliver it to another U.S. airport. 

Cargo traffic at the airport has been increasing at an annual rate of
almost 13 percent and shows no sign of stopping. 

Starting with cherries 

Washington state cherry growers usually export about a third of their
crop each year. With a bumper crop expected this year, that could total
more than 3 million 20-pound boxes headed overseas. 

With a shelf life for fresh cherries measured in weeks, cherry growers
rely on air-cargo carriers such as Northwest Airlines to get their
product to markets such as Japan, where the fruit is a highly prized
seasonal favorite. 

Northwest flies nonstop to Japan, but to make a nonstop flight from
Seattle to Tokyo or Osaka, Japan's second-largest city, Northwest cannot
load the plane to capacity. The flight is too long and there is a
tradeoff between fuel and payload. 

Using Anchorage for the past few years, however, Northwest can make it
work. A full 747-200s flies to Anchorage, where the cherries can be
transferred to two different planes, one going to Tokyo and one to
Osaka. Other cargo can be added to fill the planes. 

"It makes sense for us to use Anchorage as a launch pad," says John
Kempe of Northwest's cargo operations in Seattle. "It works the way you
want it to." 

Northwest flies two cargo flights a week from Seattle to Anchorage and
two Japan nonstops a week. Kempe says ultimately almost all of
Northwest's worldwide cargo will go through Anchorage. 

Cargo rules in Anchorage 

Anchorage has always occupied an unusual position in the airline and
air-cargo industry. 

In the 1980s, the airport was a popular refueling stop for flights from
Asia to the Midwest and East Coast. At one point in the late 1980s,
Anchorage had one of the largest duty-free operations in the world. 

But with the advent of longer-range airplanes and the opening of Russian
air space after the fall of the Berlin Wall, airlines could bypass
Anchorage on passenger flights. With the reduced number of flights went
the number of passengers who stopped in the duty-free shops as the
planes refueled. 

The airport needed another source of income. Airport director Morton
Plumb identified cargo operations as a potential business. The main
north/south runway was extended 1,000 feet to allow cargo planes to take
off with full loads. 

While the international side of cargo is most visible, the airport also
provides a major source of cargo shipments to the many parts of rural
Alaska that can be reached only by air. 

Alaska Airlines and several smaller cargo airlines operate from the
airport, providing such essentials as food and clothing for rural
Alaska. Much of the retail sales in Alaska are goods supplied by ship
and air from Seattle. Alaska's seafood industry also relies largely on
air transport for its operations. 

Downturn hit hard 

Like many industries, air cargo and Anchorage's operation were hurt by
the world's struggling economies in the past few years. 

Before 2001, the industry grew an average of 7 percent annually for 30
years, slightly faster than the 5 percent annual growth in passenger
traffic, says Robert Dahl, of Seattle-based aviation consulting firm Air
Cargo Management Group. 

But in 2001, cargo traffic declined 7 percent. "It was just one thing
happening after another," Dahl says. There was a recession in 2000 as
the dot-com boom ended, then Sept. 11, 2001, wars in Afghanistan and
Iraq plus the SARS scare last year. 

"We just lost three years of growth," Dahl says. 

Only now is cargo beginning to return to the pre-2001 levels. Dahl says
the industry is about 20 percent off of projections. 

Air-cargo growth is expected to return to the average growth of 6 to 7
percent a year this year and into the future, Dahl says, as the global
economy improves, more products move from China and just-in-time
inventory practices spread. Air cargo should benefit. 

The growth could mean more business for Boeing, especially on the
747-400 line. Almost two-thirds of the backlog of 747-400s at Boeing are
freighters. China Airlines, the Taiwan flag carrier, and Korean Airlines
recently ordered additional 747-400s. The company also has two orders to
an unannounced customer for two 767-300 freighters. 

International shipments are increasing dramatically, according to Tom
Phillips of Keiser Phillips Associates, air-cargo consultants with
offices in Seattle and Oakland, Calif. Phillips says traffic across the
Pacific has been strong, with Macao and Hong Kong both reporting 20-plus
percent increases this year. 

But Phillips also sees the potential of the Anchorage airport. Cargo
airlines increasingly are using it not just as a "gas-and-go" facility
but as a trans-shipment point. Phillips says the airport's new
cargo-transfer authority could boost traffic dramatically. 

Anchorage officials said two airlines - not named for competitive
reasons - will be the first to take advantage of the new authority in
September. More than 25 cargo carries now use Anchorage, including most
of the major carriers such as FedEx, United Parcel Service, Lufthansa,
Singapore and others. 

The Anchorage airport is also an important part of the local economy.
About one job in every 10 in the Anchorage area is tied to the airport
and its operations, according to a recent study. 

Linda Close, the airport marketing manager, said the economy also is
boosted by such things as fuel purchases and crew changes. Even when a
carrier is doing a "gas and go" stop, it usually also involves a crew
change, she says. Putting up crews at area hotels is a very competitive
market here. 

Anchorage has another thing going for it, Close said. The weather. 

In a harsh climate like Alaska's, you would think the airport would
suffer weather-related problems - cold, snow, rain, wind, long dark
winter nights. 

Not so, said Close. 

"I think we have closed for one day in the past 10 years," Close says.
"And that was just a year or so ago and caused by winds. Operations just
don't change here season to season." 

Attached Graphics:

Map of Alaska

Top Cargo Airports

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