Philippine Subic airport expanded for FedEx benefit
The Subic Bay Metropolitan Authority (SBMA) has expanded the Subic Bay International Airport in Olongapo City to accommodate the growing operations of United States air courier giant FedEx.
SBMA Chairman Felicito C. Payumo said yesterday that the 3.74-hectare new land area of the airport is vital in sustaining the operations of FedEx and for the long-term economic development program of the free port zone. The airport had an originally area of 800 hectares.
“The SBMA [which is one four investment promotion agencies of government] considers the airport expansion very important because of the support it will provide to FedEx,” Mr. Payumo said.
Airfreight 2100, Inc., the Philippine licensee of FedEx, announced in September that FedEx was considering abandoning its Subic operations and moving to nighboring Clark Economic Zone in Pampanga, or to China in 2008. It said FedEx was having operational problems in Subic due to the expansion of its business.
The free port zone, which became FedEx’s Asia Pacific hub in September 1995, enables overnight delivery to the US through Asia-Pacific countries.
FedEx uses the Subic airport as its main transloading, sorting and aircraft maintenance center for Asia-Pacific operations. Because of growing demand, FedEx has increased the number of aircrafts from only five in 1995 to 12 service planes at present.
The airport expansion will allow the airport to accommodate additional eight MD 11 wide bodied cargo aircraft of FedEx from the present 12 service planes, he said.
Over the weekend, Mr. Payumo led the inauguration ceremonies of World Bank-funded expansion project, along with Executive Secretary Alberto Romulo and FedEx officials.
The project, which started in January 2002, was completed through funding from World Bank and the SBMA. The total cost was P112.10 million.
FedEx manager Alex Lim said the airport expansion would give more strength to the operations of FedEx but he did not specify whether the company would renew its contract with Subic which expires in 2007.
Apart from the possibility of relocating in Clark, FedEx has also signed a letter of intent with the Chinese government and informed them of the possibility of relocating to China. FedEx Corp chalks up annual revenues of $22 billion.
