Executive Briefings

China Beckons, But Houston Airports Search the World For New Cargo Business

Major transportation providers are turning to Asia for their primary source of new business, but the Houston Airport System is searching in all directions for increased air cargo volumes, according to director of marketing Genaro Pena.
Houston continues to seek out new opportunities in Latin America, with Miami International Airport its chief rival for business to and from that region. According to Pena, however, there is a key difference between the two airports. Miami serves primarily as a transit point for freight, he says, with goods trucked from multiple points in the U.S. Shipments moving through Houston, by contrast, often originate from the immediate area, which plays host to a large number of manufacturers. Some 80 percent of all goods exported from Houston are made there, Pena says.
Houston also views itself as a natural consolidation and distribution point for freight moving between Latin America and Asia, as well as Latin America and Europe. Such services are especially suitable for perishable goods like flowers, broccoli and asparagus, says Pena.
The Houston Airport System logged 350,000 metric tons (782m pounds) of air cargo in 2004, breaking its previous record of 340,000 tons (748m pounds) set in 2000. Overall cargo growth was 6 percent, with international rising by 4 percent. Of the total, 52.5 percent moved on freight aircraft, with the rest moving in the bellies of passenger planes.
Increases were seen in numerous corridors and regions. Continental Airlines carried 20.1 percent more cargo from Houston to Central and South America, while KLM Royal Dutch Airlines and Lufthansa posted increases to Europe of 6.5 percent and 5.1 percent, respectively. Pakistan International Airlines, which launched service at Houston in mid-2004, moved 396,000 pounds of cargo to Asia, Africa and Australia.
All-cargo carriers were up as well: BAX Global by 19.9 percent, Cargolux by 9.1 percent, FedEx domestic services by 15.3 percent, LAN Chile by 93.2 percent, and Martinair Cargo by 37.2 percent. On the passenger side, Houston broke another 2000 record, with 44.8 million passengers passing through George Bush Intercontinental Airport (IAH) and William P. Hobby Airport (HOU). A third facility, Ellington Field, rounds out the Houston Airport System.
Houston is just beginning to realize the benefits of a major expansion of its cargo facilities, completed in January 2003. IAH boosted overall handling capacity by 75 percent, to 880,000 square feet of cargo area and 454,000 tons of annual throughput. A $3.1bn renovation of facilities included a new $180m air cargo distribution center, as well as improved runways, taxiways and ground access. In the process, the airport quadrupled ramp capacity for freighters, and can now park 20 widebodies simultaneously, Pena says.
Another highlight of 2004-and a major reason for the airport's cargo growth during the year-was the inauguration of freighter service by Saudi Arabian Airlines. It is the first direct service linking Houston with the Middle East, Pena says, adding that the carrier is expected to add a second and third freighter to the service by the end of this year. Project cargoes and other heavy freight make up most of the liftings in that service. And while the petroleum industry continues to play a large role in Houston's airfreight business, an increasingly diversified local economy has spurred the movement of other types of cargo as well, including high-tech and pharmaceutical items, says Pena.
More recently, IAH won two additional cargo services. Amiyi Airlines started up direct, weekly flights to the West African cities of Owerri and Lagos, Nigeria; Dakar, Senegal; and Accra, Ghana. Traffic in that service normally would have passed through a European airport, Pena says. Arrow Air began weekly service between IAH and points in Central America, South America and the Caribbean. Miami is also included in the rotation, which serves Trinidad and Ecuador as primary destinations, then branches off to some 20 additional points. A second weekly flight is due to commence in early June.
China and the rest of Asia are priorities in Houston's cargo growth strategy, Pena says. On that front, the airport is competing with Dallas/Fort Worth and Atlanta, both of which "have gotten a jump on freighter services [to Asia]," he says. Still, Pena is convinced that there is enough potential Asian business to generate growth at multiple airports in the U.S. South and Southeast.
The China-U.S. aviation market is just beginning to open up, Pena notes. World Airways named Houston as a candidate for freighter service into Beijing and Shanghai, although the carrier failed to receive authorization when routes were assigned for the next two years. Still, says Pena, Houston has hopes of winning additional routes to Asia in the future.
India represents another source of potential growth. Following the signing of a new open-skies agreement between India and the U.S., Pena believes Houston has a strong chance of winning a new passenger service (with belly capacity for cargo) by Air India. It is competing for that designation with Dallas/Fort Worth International Airport, with a decision likely by the end of this year.
Pena predicts that cargo activity at Houston will grow at a faster rate than the official projection of 4 to 5 percent annually for the next five years. Both freight in transit and goods destined for Houston's growing consumer market are on the rise, he says. Additional increases will depend in part on the airport's success in attracting new business from Asian-flag carriers, in countries such as China, Korea, Japan and Singapore. "We're going after all of them," Pena says. "They're really all viable."

Major transportation providers are turning to Asia for their primary source of new business, but the Houston Airport System is searching in all directions for increased air cargo volumes, according to director of marketing Genaro Pena.
Houston continues to seek out new opportunities in Latin America, with Miami International Airport its chief rival for business to and from that region. According to Pena, however, there is a key difference between the two airports. Miami serves primarily as a transit point for freight, he says, with goods trucked from multiple points in the U.S. Shipments moving through Houston, by contrast, often originate from the immediate area, which plays host to a large number of manufacturers. Some 80 percent of all goods exported from Houston are made there, Pena says.
Houston also views itself as a natural consolidation and distribution point for freight moving between Latin America and Asia, as well as Latin America and Europe. Such services are especially suitable for perishable goods like flowers, broccoli and asparagus, says Pena.
The Houston Airport System logged 350,000 metric tons (782m pounds) of air cargo in 2004, breaking its previous record of 340,000 tons (748m pounds) set in 2000. Overall cargo growth was 6 percent, with international rising by 4 percent. Of the total, 52.5 percent moved on freight aircraft, with the rest moving in the bellies of passenger planes.
Increases were seen in numerous corridors and regions. Continental Airlines carried 20.1 percent more cargo from Houston to Central and South America, while KLM Royal Dutch Airlines and Lufthansa posted increases to Europe of 6.5 percent and 5.1 percent, respectively. Pakistan International Airlines, which launched service at Houston in mid-2004, moved 396,000 pounds of cargo to Asia, Africa and Australia.
All-cargo carriers were up as well: BAX Global by 19.9 percent, Cargolux by 9.1 percent, FedEx domestic services by 15.3 percent, LAN Chile by 93.2 percent, and Martinair Cargo by 37.2 percent. On the passenger side, Houston broke another 2000 record, with 44.8 million passengers passing through George Bush Intercontinental Airport (IAH) and William P. Hobby Airport (HOU). A third facility, Ellington Field, rounds out the Houston Airport System.
Houston is just beginning to realize the benefits of a major expansion of its cargo facilities, completed in January 2003. IAH boosted overall handling capacity by 75 percent, to 880,000 square feet of cargo area and 454,000 tons of annual throughput. A $3.1bn renovation of facilities included a new $180m air cargo distribution center, as well as improved runways, taxiways and ground access. In the process, the airport quadrupled ramp capacity for freighters, and can now park 20 widebodies simultaneously, Pena says.
Another highlight of 2004-and a major reason for the airport's cargo growth during the year-was the inauguration of freighter service by Saudi Arabian Airlines. It is the first direct service linking Houston with the Middle East, Pena says, adding that the carrier is expected to add a second and third freighter to the service by the end of this year. Project cargoes and other heavy freight make up most of the liftings in that service. And while the petroleum industry continues to play a large role in Houston's airfreight business, an increasingly diversified local economy has spurred the movement of other types of cargo as well, including high-tech and pharmaceutical items, says Pena.
More recently, IAH won two additional cargo services. Amiyi Airlines started up direct, weekly flights to the West African cities of Owerri and Lagos, Nigeria; Dakar, Senegal; and Accra, Ghana. Traffic in that service normally would have passed through a European airport, Pena says. Arrow Air began weekly service between IAH and points in Central America, South America and the Caribbean. Miami is also included in the rotation, which serves Trinidad and Ecuador as primary destinations, then branches off to some 20 additional points. A second weekly flight is due to commence in early June.
China and the rest of Asia are priorities in Houston's cargo growth strategy, Pena says. On that front, the airport is competing with Dallas/Fort Worth and Atlanta, both of which "have gotten a jump on freighter services [to Asia]," he says. Still, Pena is convinced that there is enough potential Asian business to generate growth at multiple airports in the U.S. South and Southeast.
The China-U.S. aviation market is just beginning to open up, Pena notes. World Airways named Houston as a candidate for freighter service into Beijing and Shanghai, although the carrier failed to receive authorization when routes were assigned for the next two years. Still, says Pena, Houston has hopes of winning additional routes to Asia in the future.
India represents another source of potential growth. Following the signing of a new open-skies agreement between India and the U.S., Pena believes Houston has a strong chance of winning a new passenger service (with belly capacity for cargo) by Air India. It is competing for that designation with Dallas/Fort Worth International Airport, with a decision likely by the end of this year.
Pena predicts that cargo activity at Houston will grow at a faster rate than the official projection of 4 to 5 percent annually for the next five years. Both freight in transit and goods destined for Houston's growing consumer market are on the rise, he says. Additional increases will depend in part on the airport's success in attracting new business from Asian-flag carriers, in countries such as China, Korea, Japan and Singapore. "We're going after all of them," Pena says. "They're really all viable."