FedEx extends Philippine lease
FEDEX Express has extended the lease on its Asia-Pacific hub at Subic Bay, also signing an option to expand to the former Clark air base north of Manila in the Philippines, writes Keith Wallis in Hong Kong.
Under the deals FedEx Express, the air express offshoot of one of the world’s largest transport companies, said the lease at Subic had been extended for another three years to 2010. The company also has an option to extend for a further period.
FedEx has also signed an agreement with Clark International Airport Corporation that gives it a non-binding option to a 50 hectare site at the base, now renamed Diosdado Macapagal International Airport, until 2008.
FedEx Express denied some media reports that relocating operations from Subic Bay to Diosdado Macapagal would cost it $450m. But it declined to give further financial details before the release of group fourth quarter and full year results in about another three weeks.
Clark, about 140km northeast of Subic, was the headquarters of the US Pacific Air Forces before they withdrew in the early 1990s. Subic Bay was the headquarters of US naval forces.
FedEx said: ‘The Subic Bay facility represents one of the company’s most important investments.’
But industry insiders have questioned whether Subic Bay, which originally served navy fighter jets, could adequately handle the 150-tonne capacity double-deck Airbus A380 freighter which is due to enter FedEx service in 2008. FedEx has 10 of the massive freighters on order.
They point to a 1999 accident when a FedEx Boeing MD-11 overshot the single runway at Subic during a rainstorm and broke up after the plane plunged into the sea.
FedEx operates a fleet of 90-tonne capacity MD-11s, used on transpacific and European routes, and smaller 50-tonne capacity Airbus A310s on intra-Asian services.
The company also reiterated its interest in expanding operations in China about six months after it signed a framework agreement with Guangzhou airport authority.
David Cunningham, FedEx Express’ Asia Pacific division president, said: ‘Our outstanding performance across the region and exceptional results in China indicate that our current operations at Subic Bay may not be able to support our projected growth.
‘Therefore we have signed an agreement with Diosdado Macapagal International Airport that reserves land through 2008. We also continue to hold discussions with Baiyun airport in Guangzhou as a potential future hub.’
Felicito Payumo, chairman of Subic Bay Metropolitan Authority, said the extension contract and options would allow FedEx to operate at Subic for at least another 10 years. Completion of the Subic-Clark-Tarlac toll road in 2007, with a journey time of 30 minutes between Subic and Clark, would make the two separate facilities ‘virtually one hub’.
