FedEx keeps its Asia-Pacific hub in Philippines

PUBLISHED : Wednesday, 31 March, 2004, 12:00am
UPDATED : Wednesday, 31 March, 2004, 12:00am

The news of a relocation to the former Clark air force base is a blow to Guangzhou

Federal Express (FedEx) will sign an agreement next month to relocate its Asia-Pacific hub to the former Clark air force base in the Philippines, perhaps as early as next year, according to sources.

The deal will disappoint the authorities in Guangzhou, where FedEx has been entertaining the possibility of moving its hub to the city's new 18 billion yuan airport.

Senior executives from the Memphis-based carrier will on April 11 meet General Adelberto Yap, the president of Diosdado Macapagal International Airport, as the Clark airfield is now known, to sign a 25-year lease negotiated in January by lawyers from the two sides.

'We had three meetings last year and an agreement was reached in January. I will go to Memphis next month to sign the deal,' Mr Yap said. 'FedEx said they would need to begin moving from Subic Bay two years before their lease expires there in 2007. We agreed, so theoretically they could begin partial operations here within two years.'

Eddie Chan, a spokesman for FedEx, declined to confirm the move yesterday.

'Our position has not changed. We have not made a decision about where we will move our Asia-Pacific hub,' he said.

He said Guangzhou and Clark were the front-runners.

In January, FedEx signed a framework agreement with the Guangzhou Baiyun Airport Authority to explore the possibility of a 'joint initiative' at the new airport. A spokesman for Guangzhou airport yesterday said they had not been notified of any change to FedEx's plans.

However, Mr Yap assured the South China Morning Post yesterday that FedEx had reserved a 42-hectare site at Clark, negotiated tax concessions from the Philippine authorities allowing it to move equipment in and out of the country without penalty and guaranteed Clark an annual level of revenue.

'I assure you [FedEx's hub] will be on the south side of the airport, the opposite side from UPS,' he said. 'FedEx requested a site close to the international terminal, but we could not agree to that because we have expansion plans. They will start with 12 to 18 flights a week.'

FedEx has been operating its Asia-Pacific hub, which handles goods moving from Asia to the United States, from Subic Bay for the past eight years.

But the airport there has one of the shortest runways in the region and expansion potential is limited.

Mr Yap said the carrier requested the Clark site be made available two years before its lease at Subic expired so that it could 'wind down operations' at its present hub with minimal service disruptions.

He said FedEx would build its own facility at Clark and that the lease offered the possibility of an extension. 'If they want to sign for another 25 years, that's okay with us,' he said.

FedEx operates its Asia-Europe hub at Hong Kong's Asia Airfreight Terminals.

In the postbag

FedEx has reserved a site at the former Clark air force base

It could begin moving its Asia-Pacific hub there next year

Airport manager plans Memphis trip next month to seal the deal