Cargolux Deal A Boost To LCK

June 14, 2013
Airline started twice-weekly service beginning yesterday.

June 14--The number of cargo flights from Hong Kong to Rickenbacker Airport will soon double, which could reverse a decline in activity and help the airport break even for the first time.

Luxembourg-based Cargolux Airlines International will start twice-weekly service on Sunday, with the second flight on Thursdays.

Kalitta Air, a Michigan-based cargo airline, operates two weekly flights on the same route.

"We're confident the local and regional markets are big enough for these two new flights, and even more players, but that remains to be seen," said David Whitaker, the Columbus Regional Airport Authority's vice president of business development.

The reason for the Cargolux flights is the central Ohio region's robust fashion industry in general, and L Brands, formerly Limited Brands, specifically, he said.

"They've been the giant in this area for many years," Whitaker said of L Brands, parent of Victoria's Secret and other chains. "And in the fashion industry, they're highly speed-sensitive and have a need to get products to the market very quickly."

L Brands officials did not return calls for comment.

"These flights are a great sign," said Jung Kim, research director at the Columbus Chamber of Commerce. "This reflects that the connection of our local apparel industry to East Asia is enough to support this kind of traffic and demonstrates the capacity and infrastructure Rickenbacker has to support this kind of activity."

Over the first four months of the year, the amount of cargo that moved through Rickenbacker was down 3.2 percent from the corresponding period in 2012. This trend largely was the result of a decrease in FedEx operations from Rickenbacker.Other cargo operators at the airport include UPS and AirNet.

"This will get us into the plus numbers by the end of the year, assuming the Kalitta flights continue," Whitaker said of adding the Cargolux flights.

The new Boeing 747-8F aircraft that will be used by Cargolux can carry about 300,000 pounds of cargo.

"The airport infrastructure and service is very accommodating for air-freight operators and well adapted to the needs of the 747-8F," Cargolux CEO Richard Forson said in a statement.

The company is Europe's largest all-cargo airline and serves 90 destinations worldwide. The Cargolux flights are "open to the free market," Whitaker said, adding the Kalitta flights are " closed charters" in which RCS Logistics is the sole customer.

The landing and fueling fees and ground-handling costs will be $4,000 for each Cargolux flight, Whitaker said, which adds up to a little more than $400,000 per year for the airport.

The airport authority took over Rickenbacker operations 10 years ago, and the airport has since been operating at a deficit. Last year, Rickenbacker's deficit came to $300,000.

"These flights could go a long way toward ending that," Whitaker said. They also could, he hopes, unleash Rickenbacker's "potential to be a strong global gateway."

For this to happen, cargo that lands at Rickenbacker must be distributed to a wider geographic area: "To all of Ohio and the entire Midwest," Whitaker said. "We have these incredible infrastructure and trucking assets, and the stuff that lands here can easily and inexpensively be transferred by truck to a wide area."

In addition to imports, local manufacturers need to export what they produce to Asia. Currently, the Kalitta flights are empty on their return trips to Hong Kong, and it will initially be the same for the Cargolux flights, Whitaker said. Fashions, auto parts and many other items produced domestically could be loaded onto these return flights.

"That's one of the things we're working on," Jung said, adding that many local companies ship their goods by truck or rail to East Coast ports, where they are then loaded onto ships headed to Asia.

"Many companies haven't thought of exporting this way," he said of air cargo service. "This infrastructure and all these flights could lead to additional opportunities for local exporters."

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