Business
6:52 am
Thu June 7, 2012

Air cargo wars: RFD vs ORD

An aviation expert says Chicago's plan to bolster air cargo capacity at O'Hare International could have a negative effect on surrounding airports. He says Rockford's airport could be among those affected.

Chicago’s plans for O’Hare centers on an 820-thousand square-foot facility. If approved, the new building would open next year with completion expected sometime within the next decade. When making the announcement last month, Mayor Rahm Emanuel noted O’Hare’s reputation as one of the world’s busiest passenger airports. He went on to say the airport would be ensured a similar reputation for cargo traffic…if this project were to go through. 

“This will allow us to help us achieve the goal of doubling our exports over the next five year, [while] adding 100-thousand jobs to the Chicagoland-area through greater exports.  Not just imports, but exports" Emanuel told reporters.

The new facility has been in the planning stages for several years, and was a priority for former Mayor Richard Daley. Emanuel says with the economy on the mend, his administration decided now is the time to jumpstart the effort.   

Aviation expert Aaron Gellman says Chicago is wise to revive this initiative. He says that’s because this part of the industry will only continue to grow:

“I think the future is going to be very much an air-cargo future.  I think ultimately, how long I don’t know, air-cargo will surpass passenger air transportation. ”

And Gellman, who teaches transportation management at Northwestern University, says O’Hare is certainly capable of being a major player in the rapid growth of air-cargo flights. 

So where does that leave O’Hare’s regional competitors? Gellman says it doesn't look good.

 “What it means for other airports around Chicago is that they will find it more difficult to attract significant cargo operations."

Gellman says that includes the Chicago-Rockford International Airport, which has a strong reputation for its air-cargo facilities. It’s a top 25 U-S cargo airport and is home to a major sorting center for UPS. Bharat Puri chairs the Board of Directors at RFD. He doesn’t view O’Hare’s proposed expansion as a threat.

 “With O’Hare pumping this amount of money into the airport and the economy…it does nothing but help the entire region" Puri said.

Puri says he thinks the economic impact from O’Hare’s expansion would spur enough activity that it would eventually be felt in other areas such as Rockford and Milwaukee. 

When it comes to attracting air-cargo operations, Puri says the potential for higher fees at O’Hare could be a turnoff for companies looking for a new home.

“When you look at the cost benefit analysis of it…the landing fees or the parking fees…they could say that Rockford is cheaper and maybe we [should ] go to Rockford.”

But Puri admits that some companies might look past the cost factor and choose O’Hare because of its location.  Aaron Gellman agrees with that assessment.

“O’Hare is well located for the region.  Not just the Chicago area including suburbs, but the whole region of mid-America let’s call it" Gellman said.

Gellman says a lot of air-cargo is now being transported in the belly of large passenger jets. He says that creates another advantage for O’Hare, because it dwarfs its surrounding competitors when it comes to passenger air traffic. 

And while the major airport an hour east of Rockford tries to gain another edge, Bharat Puri says R-F-D officials will remain focused on the strength of what their airport has to offer.

“We have UPS.  So let’s bank on UPS and let’s get the next first cargo airline, one step at a time.”