Prince George Airport has a competitive advantage over Anchorage for refueling flights between some parts of Asia and North America, according to Landrum & Brown consultant Dan Muscatello.
Muscatello met with city council Monday to talk about the economic potential for refueling and air cargo handling at the expanded Prince George Airport.
“(Prince George) is literally the shortest route from the Pearl River Delta to North America on the great circle route,” Muscatello said. “We think this… offers the aviation community, and North America in particular, a great opportunity.”
The Pearl River Delta in China includes Hong Kong, he said, and is the largest air cargo market in the world. Cathay Pacific Airlines alone operates 40 flights per week between Hong Kong and North America.
Phase one of the airport’s expansion plan is to become an alternative “tech stop,” or refueling destination for aircraft heading to and from Asia.
The Prince George Airport is marketing Prince George to 50 air cargo carriers with routes between Hong Kong and North America, he said.
Based on analysis done by Boeing on the Boeing 747-400, airlines could save between $3,311 and $6,055 per round trip between Hong Kong and Calgary, Chicago, New York, Atlanta, Memphis, Dallas and Houston.
For one carrier Muscatello spoke to flying three flights per week between Hong Kong and Chicago, the savings would be over $533,000 per year.
Currently Prince George has no landing and parking fees for cargo aircraft, and could turn aircraft around in 10 minutes versus 20 minutes in Anchorage. That alone could save air cargo companies $1,025 per landing, despite higher fuel costs in Prince George because of Anchorage’s bulk purchase power.
“When an aircraft taxis on the ground it burns about $50 per minute (in fuel),” he said.
Muscatello said airlines are facing economic uncertainty because of the weak Northern American economy and higher security and fuel costs. However, he said, “the imports will keep coming.”
“The carriers are going to be more sensitive to price than they are now. And the more sensitive they are, the better for Prince George,” he said. “The goal is not to take all the business from Anchorage. It’s going to be route-based.”
Muscatello said he believes air cargo craft will be landing in Prince George by the end of the year, with the volume to grow over time.
“It takes awhile for an airline to change its cargo patterns. It’s not just the flight, there is a whole logistics network on each end,” he said. “I think (airport) profitability could be seen in a couple years.”
Currently the back up airport to Anchorage is Fairbanks, Alaska. Prince George is closer to the “circle route,” than Fairbanks, he said.
Phase two of the airport’s plan includes developing capability to load additional cargo in Prince George for shipment to Asia.
Currently air cargo craft tend to fly 85 per cent full from China to North America, and 35 per cent full from North America to Asia.
“We’ve met with two Chinese developers who are looking at investing $100 million in the Prince George logistics park,” Muscatello said. “I believe we’ll see back haul in Prince George in 12-18 months.”
The proposed airport logistics park offers 3,000 acres of developable land with access to air, rail, truck and, via the Port of Prince Rupert, sea travel.
“Anchorage doesn’t have an airport logistics park,” he added.
The final phase of the plan calls for Prince George to become a destination for freight, he said. That might take the form of shipping parts to Prince George to be assembled and packaged, before going on to the final market.
Rising wages and fuel costs in China have led some industries to consider repatriating industry to North America, he said.
Initiatives Prince George president Tim McEwan said getting airlines to land and refuel in Prince George will be a stepping stone for more economic activity in the city.
The city’s rail, road, air and sea connectivity, combined with inexpensive, available land for development, will make the city an attractive place for investment.
“All of these things play into the cost savings,” McEwan said. “The connectivity to Prince Rupert is critical.”