A History of Collaboration

“And finally, we’re probably the lowest cost airport in the United States. Our cost per enplaned passenger gross is less than $5; it’s about $4.83 this fiscal year. We’re one of the very few airports that does not collect a PFC [passenger facility charge].

“So, if you take the $4.50 (PFC) and deduct it from our average cost per enplaned passenger of $4.83, the net real cost compared to other airlines is only 33 cents. That is a huge incentive.

“We don’t see ourselves as supplanting Atlanta; we complement Atlanta. It gives Delta the opportunity to take some of the pressure [off Atlanta]; where they need to feed somebody through a Southeast or South Central hub, they can do that at Memphis quicker, cheaper, and with better customer service.

“Atlanta is a fantastic airport, and it will continue to grow. But I just think there’s opportunity for Delta and Memphis and Atlanta – win/win/win.”

Residual agreement
Due to the joint bankruptcies of Northwest and Delta and their subsequent merger, the airline lease agreements at Memphis International have been on hold. According to Brockman, the ten-year agreement with the carriers has been extended twice and now will expire in June 2010.

Explains Cox, “The airlines are out of bankruptcy, the merger is just about complete; so now is an appropriate time to sit down and come up with an agreement.”

Both Cox and Brockman foresee another residual agreement being reached. “There are no problems with the existing agreement,” says Cox.

That said, he does not see the term length being anything like the original 30-year agreement of another era. “I think those types of agreements are dinosaurs. I don’t anticipate anything that reaches that length of term,” says Cox.

“It’s in our interest to try to make the term long enough that it gives us comfort that we have tenants and a way to pay for our infrastructure and operating costs. And long enough for the air carriers that they feel like they have a long enough lease to make air service commitments.”

The first aerotropolis
Much of the focus at the authority today is building on the airport’s global reach and its interconnected role with the community and its future growth. In essence, playing on its role as what some have termed the first aerotropolis, a role which Memphis International earned more or less by default.

Explains Cox, who first learned of the aerotropolis moniker through a magazine article, “We knew how important the airport was and how it dominated economic development in our region. But it was the first time we knew there was an aerotropolis concept.

“We were aware of Schiphol, Hong Kong, Frankfurt, and Dubai, where they are an aerotropolis by design. It just sort of happened here, by circumstance.

“Now, we want to take that concept; we’ve branded ourselves and copyrighted the term, Memphis – America’s Aerotropolis, so that people in the region and all over the globe will understand the importance of Memphis as a logistics and distribution scale on a global basis.

“We’re already FedEx, with it headquartered here. Memphis, Paris, and Guangzhou, China are going to be their principal global hubs to serve the world. So we’re trying to develop a dialog with those other two airports and to work in concert to help all three airports have joint marketing and have joint opportunities to grow air cargo and logistics and economic opportunity.”

There is a growing movement to promote the region’s increasing role in the biomedical industry, according to Cox. The St. Jude’s Children’s Research Hospital and the University of Tennessee’s Medical School are central drivers, he says.

“A lot of businesses have located here because of the medical facilities, but also because of our logistics facilities, primarily FedEx. We’re the second largest medical device manufacturing location in the United States for orthopedics,” explains Cox. Thus, he relates, a doctor in China can order a hip implant today, have it manufactured in Memphis this evening, and have it shipped overnight.