FedEx Express & Indianapolis Airport Authority unveil plans for expansion of carrier's hub
FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX), and the Indianapolis International Airport today unveiled a major expansion project for the express carrier’s Indianapolis Hub and a multi-year extended lease agreement that includes construction of up to 14 additional wide-body aircraft gates.
Up to approximately 800 additional employees could be hired under the expansion plan, which would bring the hub’s employment level to nearly 5,000 people.
The expansion will increase package processing capacity more than 30 percent, from 75,000 packages per hour to 99,000 packages per hour, at the second-largest domestic FedEx Express hub behind Memphis. Additional capacity is needed at the hub to meet forecasted long-term package-volume growth, particularly for international shipments. FedEx operates international flights from Indianapolis to Europe, Asia and Canada.
“This project will help ensure that we have the required processing capacity for the added volume in Indianapolis,” David Bronczek, president and chief executive officer of FedEx Express, said. “For FedEx customers, it reaffirms our focus to have world-class facilities that allow us to provide an unmatched level of reliable shipping services across our global network.”
Alan B. Graf Jr., executive vice president and chief financial officer for FedEx Corp., added, “Capital investment in our hub network improves operational efficiencies that create solid shareholder value and further position FedEx as the indisputable industry leader.”
Plans call for a 400,000-square-foot expansion to the hub’s existing sort facility and construction of a 175,000 square-foot secondary sort building. Two maintenance buildings — including a 40,000 square-foot facility for aircraft maintenance and an 8,000 square-foot facility for ground support equipment — also will be built, pushing total hub growth by more than 600,000 square feet. Construction is expected to begin soon and the expanded system operational by December 2008.
As the airport’s major cargo carrier, FedEx Express also is extending its lease 12 years, from 2016 to 2028. Under the agreement, the airport authority will fund, construct and lease back to FedEx five wide-body aircraft gates by this December, with construction expected to begin in late May. There are options for up to nine more gates to be constructed by Dec. 1, 2008. FedEx currently has 61 gates at the hub, 38 for wide-body aircraft and 23 for narrow-body aircraft.
“This expansion by FedEx Express solidifies Indianapolis’ reputation as one of our nation’s leaders in transportation and distribution,” Mayor Bart Peterson said. “FedEx is the type of successful business that other cities envy, and it says a great deal about our city, our airport and local workforce that FedEx has committed to grow and expand in Indianapolis.”
The last hub expansion in Indianapolis was completed in 1998, which tripled the facility’s size and doubled sorting capacity. FedEx began operating the hub in 1988.
Indianapolis is one of six major domestic hubs operated by FedEx Express. Other hubs are in Memphis, the company’s world headquarters, Newark, N.J., Fort Worth, Texas, Oakland, Calif., and Anchorage. FedEx also is building a hub in Greensboro, N.C., scheduled to be operational in 2009.
About FedEx Express
FedEx Express is the world’s largest express transportation company, providing fast and reliable delivery to every U.S. address and to more than 220 countries and territories. FedEx Express uses a global air-and-ground network to speed delivery of time-sensitive shipments, usually in one to three business days with the delivery time guaranteed.
