UPS to Double Presence at Airport

By Michael Waddell

The world’s second-busiest cargo airport is about to see another increase in freight capacity, helping bolster a facility that has suffered in recent years from fewer passenger flights.

The UPS deal adds 1.1 million square feet of land and $180,000 to its base lease at Memphis International Airport.

(Daily News/Andrew J. Breig)

Atlanta-based United Parcel Service will double in size at Memphis International Airport, according to Memphis-Shelby County Airport Authority president and CEO Larry Cox, who announced the news Thursday, Sept. 19, at the monthly board of commissioners meeting.

“I’m very happy to be able to present this to the board of commissioners today and to the city of Memphis and Shelby County,” Cox said. “We have one of the few airports in the country, and in the world, that is seeing increases in cargo landed weight. Memphis is the perfect place in the world to distribute products.”

The UPS deal adds 1.1 million square feet of land and $180,000 to its base lease at the airport, and the company will protect another million square feet under another option that can be added during the next five years. UPS uses ground leases so it can control and finance the construction of its own facilities.

In August, the airport outperformed its budget by $1.2 million. Actual revenues at Memphis International exceeded actual expenses by $1.4 million, with $10 million in actual revenues versus $8.6 in actual expenses.

The increases were driven by driven by reduced electrical costs in the terminal due to the mild summer, the ground transportation center performing better than anticipated and the higher landing weight and landing weight revenues from the airfield.

“Our costs to operate the ground transportation center are less than we had budgeted,” said Forrest Artz, Airport Authority chief financial officer. “So we get the double benefit with increased revenues.”

Total cargo handled for August increased 4.2 percent year-over-year, with 795 million pounds handled compared to 762 million pounds handled in August 2012. For the 2013 fiscal year-to-date, cargo handled is up 3.1 percent with 6 billion pounds handled so far this year compared with 5.8 billion pounds handled at the same point in 2012.

The surging cargo numbers have been offset by sagging passenger numbers brought on by reduced number of flights.

For the fiscal year to date, total enplanements year-to-date dropped 31.4 percent to 3.3 million for the January to August period from 4.9 million for the same period in 2012. In August, total enplanements dropped 26.8 percent compared to August 2012, falling from 595,875 enplanements to 435,942.

The number of nonstop flights dropped in August to 57 flights to 48 destinations, and that dropped to 40 destinations this month after Delta announced more cuts.

Air officials remain optimistic thanks to increasing from the other air carriers. Southwest Airlines/Air Tran will add two new nonstop destinations (Houston and Tampa) to its offering in November.

“We’re growing our base because we are seeing increased enplanements with other air carriers (other than Delta), as well as lower fares,” Artz said.

In other board news, Brad Davis, city of Memphis deputy director of city engineering, gave details on plans to replace the bridge over Nonconnah Creek on Airways Boulevard leading to and from the airport.

Chris-Hill Construction won the $5.5 million bid on Sept. 9, and work began earlier this week. The project is expected to be completed in 17 months.

The board also agreed to rename Sunshine Boulevard in honor of Arthur Haglar, who recently passed in July. Haglar was instrumental in developing Charles W. Baker Airport into a thriving aviation center.