It didn't take long for Trammel Crow to find a tenant for the new building. Before the building foundation was poured, Challenge Air, an air freight carrier which specialized in importing flowers from Central and South America through Miami, signed a lease on the entire building. Challenge Air asked for modifications to the building to include 40,000 square feet of refrigerated space for its flowers and a nearby fumigation facility.
Before that deal was closed, Fegan had already considered the import of perishable goods from Latin America, particularly flowers, as a natural for D/FW. "Miami has a tremendous presence (in perishable cargo)," Fegan says, "but we are in the central part of the U.S. and trucking travel time from here to virtually the entire country, but particularly the Western U.S., is 48 hours. We save two days (travel from Miami) on a flower, which is probably 20 percent of the shelf life of the product and I think Challenge thought the same."
However, a short time after its flower business became operational at D/FW, Challenge got an offer it would not refuse from United Parcel Service. "I'm not sure how these things happen," Fegan says, "but UPS, I think, was really coveting the routes that Challenge had so they bought the whole thing. By buying the routes they're basically trying to buy access to South America."
That put Challenge out of the flower import business, but the company shifted its focus and maintained its lease on the Centre and does the ground handling inside the warehouse for the tenants.. It is now managing the facility and is the lessor to Lufthansa, Cargo Lux from Luxembourg. The U.S. Postal Service is also a tenant with the likely addition of Mexicana Airlines and China Airlines at some time in the near future.
CREATING A DEVELOPMENT DEPARTMENT
While building cargo facilities is the outward manifestation of D/FW's expansion plans, Fegan and his board of directors saw the need for a department devoted to the development of the airport as a whole with an emphasis on developing cargo operations. To that end, Fegan hired Joseph Lopano, a former airline executive, as managing director of Air Service Development and Pineda, an air cargo specialist who spent 10 years involved in the development of Miami International's air cargo operations.
"That department," Fegan says, "is really designed to understand the market, understand our customers. We talk about being the airport of choice, so we want to understand why airlines choose this airport, what we need to do as an organization to facilitate that. Emir, Joe, Kevin and myself travel all over the world talking to different airlines to tell the D/FW story. Of course, with our existing tenants, we're always looking for ways to help them grow."
Airport development is nothing if it doesn't have a large marketing component. D/FW's marketing strategy is three-pronged after the team identifies target markets through a strategic planning process in which markets are identified that "we think D/FW can sustain service from from a cargo and international and domestic standpoint," Lopano says.
"Once we develop our targets, our marketing plan is essentially in three parts. Number one is trade advertising where we create awareness of D/FW as a great economic opportunity; second is direct mail, where we have various vehicles that we use to reach from the chairman of the board ... at airlines down to the manager level. The final most targeted method is personal selling or presentations to senior executives of these airlines.
"Having created the awareness through advertising and talking to them through direct mail, we then go to visit them personally and we present them with a pro forma P&L statement as to what we believe we think an airline can make based on what we know their fleet is, what aircraft they operate. We estimate their costs and revenues. By the time we do that over a period of a couple of years we develop a very good and credible relationship with them. We tend to go back and forth with information until we make a decision as to what makes sense for the airline."
Worldwide air cargo has averaged 7 percent annual growth for the past 30 years.
Trammell Crow Co.'s 106 acres of new development will mean an additional $1.5 million a year in guaranteed land-lease revenue for the airport.
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Trammell Crow will make plans for 640 acres southeast of the airfield.