Saturday, February 11, 2012

Anchorage, Alaska: Airport Cargo Volume Tied to World and Local Economic Conditions

By Kate McPherson

ANCHORAGE - The Ted Stevens International Airport is a major moneymaker for Anchorage. It pumped a billion dollars into the city’s economy last year, and put more than 15,000 people to work, according to the Anchorage Economic Development Corporation.

But it’s the cargo operations that generate much of the revenue.

For the past ten years, Ted Stevens International Airport has ranked among the world's top six largest cargo hubs when it comes to the amount of goods passing through it; currently it sits in fifth place.

There’s an overall rise in the volume of cargo coming through Anchorage’s airport after the industry took a hit in 2008 with the global financial crisis. The airport said 5.73 billion pounds of freight passed through in fiscal year 2011. There is a noticeable recovery in cargo volumes, but even a small downturn in certain economies will be felt on the tarmac in Anchorage. This is especially true for the markets of Asia.

“Every Asian cargo carrier that flies the route from Asia to North America comes through [the] Anchorage airport,” said Trudy Wassel, the airport’s business manager.

Even though cargo volumes have been increasing since 2008, it’s not always a steady growth. Wassel said revenue for fiscal year 2011 is down from the previous year, around 10 percent each month, and this is in part due to cargo operations.

"It's not because the planes are going somewhere else: they are coming, there are just less of them right now," said Wassel

“It depends on how the economy is in the Lower 48, if people are buying stuff, the stuff will come through here,” she addded.

The importance of the cargo industry to Ted Stevens International Airport is clear: 70 percent of the airport’s revenue is generated by cargo operations.

“The planes have lot of cargo. They put on less fuel. They come here and gas up and then they go down to the Lower 48 and make their deliveries,” said Wassel.

Domestic air cargo carriers operating in anchorage are also seeing steady results in their businesses, according to the Anchorage Economic Development Corporation.

ACE Air Cargo is one of the smaller air cargo services operating out of Anchorage and services many regional communities throughout the state, including Dutch Harbor, St. Paul, Sand Point, Cold Bay, Bethel, Dillingham, King Salmon and Aniak.

According to the latest report prepared for the Anchorage Economic Development Corporation, done by the McDowell Group (click here to read the full report) regional air services operating out of Anchorage were responsible for 2,800 jobs.

Greg Hawthorn is the Director of Sales and Marketing with ACE Air Cargo, one of a handful of regional services operating out of Anchorage. “A lot of the time it’s cheaper to buy the stuff here and air freight it out to the Bush than it is to buy it in the Bush,” Hawthorn said.

The cost of fuel continues to hurt the bottom line of Alaska’s domestic carriers, and the ability for people out in remote areas to pay. “We try to keep the fuel prices down as low as we possibly can but there comes a point when fuel goes up, so does the prices," Hawthorn said.

In-state cargo carriers are directly affected by the local economies, so if a fishing season hasn’t been as fruitful as expected, cargo loads will be down. But ACE Air Cargo said smaller planes and a focus on the individual have helped its business stay afloat – and grow.

"If you're a small time fisherman, and you're on the side of the river, and you're catching 3,000 or 5,000 pounds a day, how long is it going to take to get a big plane in there?" Hawthorn asked.

No matter how big or small the carrier, the importance of air cargo continues to grow for Alaska.


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