With carriers expanding their service and others soon to enter the market, optimism for growth at Houston Bush IntercontinentalAirport (IAH) is high.
Coming in December, Emirates Airlines will connect Houston to Dubai non-stop three times weekly, but will expand to daily service by mid 2008. The UAE-based carrier will utilise 777-200LR aircraft on the route. While this aircraft has the capability of hauling up to 18 tonnes of cargo, Genaro Pena, Houston Airport System (HAS) marketing director, estimates that Emirates will initially haul three to fi ve tonnes outbound fromHouston per fl ight.
“Initially, the cargo will be limited,” says Pena. “But the new service will lead to more opportunities and help them develop business.” Pena says. HAS officials also believe this will help IAH attract more service to that part of the world since Emirates will improve Houston’s quality of air service.
The reasons for Emirates Airlines entering the Houston market are signifi cant. For one, the carrier was attracted to Houston because of its long ties to the Middle East via the petroleum industry. But more signifi cant, Houston is a big and vibrant market. Beyond petroleum, the region is rich with high tech industries stretching from medical, aerospace and information technology businesses. Companies such as Dell, Hewlett Packard, Samsung (based in Austin) and others that also stretch along the US-Mexican border offer a good product mix for both inbound andoutbound cargo hauls.
“Inbound cargo is important to us because that freight offers a high yield,” Pena says. In addition, industries in and around the Houston catchment area are capable of building signifi cant volumes of outbound freight. That catchment area includes Oklahoma, New Mexico, Arkansas, Louisiana, and Mississippi, besides other large cities in Texas. Not only is Houston located in one of the fastest growing regions of the country; this Texan city near the Gulf of Mexico is also well situated as a gateway for connecting passenger and cargo to the West Coast, Mexico, and South and Central America.
As a result, Texas is the top exporter in the nation, exporting $128.7 billion in 2005. And Houston was the top exporter for Texas, exporting $46.7 billion in 2005. “We have a lot of tonnage going to Singapore, Malaysia, Indonesia, and Southeast Asia,” Pena states. This includes cargo for infrastructure projects in China, South Korea and Eastern Russia. Houston benefi ts because of the number aircraft and carriers thatservice IAH.
“Carriers do not have to depend on trucking like competitors in other gateways like Dallas, Los Angeles, and Atlanta,” he says. These facts are important to carriers, and reasons for IAH also reeling in the service of AirBridge Cargo, which will begin fl ying 747 extended range aircraft between Russia and Houston in November. “We are their fi rst North American destination,” Pena says. “That tells you how signifi cant Houston has become.”
AirBridge Cargo will use Houston as a gateway to establish direct access to Houston’s catchment area and beyond such as Northern Mexico, and Central and South America. Other carriers have realised these benefi ts and have expanded their service since inaugurating service from IAH. Among them, Saudi Arabian Airlines, which started freighter service at IAH in 2004, now offers twofl ights per week.
Korean Air, which began twice weekly scheduled all-cargo service to IAH in January 2007, now has three scheduled services a week to Seoul’s Incheon International Airport. Last year, China Airlines commenced cargo service with two freighters per week from IAH to Taipei. It too, is now up to three fl ights per week. Its passenger division also offers fl ights from IAH. This new service makes China Airlines the only Asian air carrier currently offering scheduled passengerand cargo service to Houston.
“They proved what we knew all along: That if a carrier came in with the right timing for their fl ights and the right rates, they would capture a big chunk of this market,” Pena states. A wide host of other carriers such as British Airways, Lufthansa, Cargolux, and Continental Airlines also service IAH. These give Houston access to Europe, Asia, the Middle East and even Africa.
“When one considers the carriers that fl y to Houston, you see that we have one of the most diverse mixes of airlines that fl y to the United States,” Pena stresses. “We are one of the few cities in the United States with direct service to Africa.” Continental Airlines is Houston’s largest cargo customer. While Continental is focused on passenger service, the airline offers superb connectivity to Latin America. “The only market to which they do not fl y is Santiago, Chile,” says Pena.
Consequently, Houston is able to compete with Miami International Airport (MIA), an airport well known for its Central and South America connections. Its carrier mix also makes IAH competitive with New York, Los Angeles, and Chicago. Extended range aircraft, additional freighter capacity, and the 787 also contribute to Houston’s positioning.“The 787 will add greatly to the abilityof airlines, including Continental, toreach markets non-stop in an economicalway they could not before,” he says.Infrastructure improvements are alsoimportant. At IAH this includes a fi fthrunway – its third parallel, that can handleall aircraft; a 500,000 square footcargo facility, – the largest built in the USover the last decade; and a new federalinspection facility.
The cargo facility is now about 75 percent full, while the federal inspection facility is the largest in the country. “We have no constraints in terms of capacity for the next 10 years,” Pena states.“We have land to grow. We can doubleour cargo area. We can expand ourterminal bays.” – Karen E. Thuermer
