By David Pendered
Atlanta intends to expand its air cargo business, aviation General Manager Louis Miller said at Monday’s luncheon meeting of the Rotary Club of Atlanta.
“Cargo is very important to us,” Miller said. “Our goal for this year is to get two new airlines in here, and we already have one. So we’re half-way there.”
Miller’s remarks echo the emphasis Atlanta Mayor Kasim Reed has placed on growing Atlanta’s position in the global freight shipping industry.
Reed has called for more cargo to flow through Atlanta’s airport and for the Savannah Harbor to be deepened to accommodate bigger ships, with the idea that Atlanta would benefit from trade generated from a busier seaport.
The business expansion plan seems challenging. Last month, a grim report on the economics of the global shipping industry was issued by one industry observer.
The International Air Transport Association released a third-quarter report that contained bleak reviews and forecasts for the shipping business. That’s partly because high-end products that make sense to ship by air, such as computer chips, now are now being transported by ships, which themselves are reducing rates, according to the report.
The IATA’s third-quarter cargo e-chartbook stated:
“Cargo rates are also in decline, though surcharges have risen. Forward-looking indicators for demand point to further weakness in the months ahead, while falling sea freight rates and rising twin aisle capacity [or, capacity in wide body planes] are intensifying the competitive environment.”
Miller said the airport is picking up cargo business. He said total cargo is up 17 percent and international cargo is up 24.2 percent. Miller didn’t provide the timeframe of the comparison.
Miller said the airport continues to grow to meet market demands.
“Upgrades were completed to support the larger 747-800 series freighters,” he said. “We’ll be the North American cargo center for British Airways.”
The new freighter, by Boeing, is used by at least four cargo haulers listed at Atlanta’s airport: British Airways, Cargolux, Cathay Pacific Airways, and Korean Air.
Miller has been in both his GM’s position and Atlanta just over a year. His introduction Monday to the Atlanta Rotary included positive remarks from Taylor Glover, president and CEO of Turner Enterprises, Inc. and board chair of Cousins Properties, Inc.
Glover reminded the crowd that the selection team that recommended Miller to Mayor Reed was headed by Carol Tome, CFO of Home Depot and incoming chair of the Metro Atlanta Chamber of Commerce. Although Glover didn’t mention that he had served on the selection committee, Glover did note that he has great respect for the responsibilities of the airport GM.
The GM “needs to be a strategic thinker,” Glover said. “The job includes overseeing $6 billion of capitol improvements, which include $1.4 billion for the international terminal that’s to open next year.”
Miller said cargo volumes are up, for shipments both domestic and international.
With that, Miller began a 20-minute primer on the airport’s position and role in metro Atlanta. Highlights include:
- The airport is an enterprise fund run by the city of Atlanta;
- The airport GM reports directly to the mayor;
- Reed’s criteria for a GM included experience and background;
- Airport funding sources include ticket taxes and fees; tenant leases; concessions; parking; and ground transportation;
- A recent study concluded the cost of building a second regional airport is unfeasible;
- A management plan to promote sustainable practices is nearly complete;
- A master plan is being updated;
- Southwest Airlines will be a welcome addition to the airport, where Delta has been a “backbone.”
- The international terminal is to open in Spring 2012.
Miller said he cannot answer the million dollar question: When will the new terminal open.
“If I miss it by just one day, I’d be criticized for missing it,” Miller said.