Guangzhou still on FedEx hub list

PUBLISHED : Tuesday, 01 June, 2004, 12:00am
UPDATED : Tuesday, 01 June, 2004, 12:00am

Federal Express (FedEx), Asia's No2 express operator, yesterday strengthened its commitments to two airports in the Philippines but said Guangzhou's new 18-billionyuan complex remained in the running to be the carrier's regional hub.

FedEx extended by three years the lease at its present hub in Subic Bay and signed a four-year option for the right of first refusal on a 42-hectare site at Diosdado Macapagal International Airport (DMIA), the former Clark Airforce base.

The signings come just days before the United States and China on June 9 begin three days of talks on a new air services agreement that could potentially award FedEx and other American carriers the regulatory flexibility to set up aviation hubs on the mainland.

'We have not made a decision on the location of our Asia-Pacific hub,' FedEx Asia-Pacific president David Cunningham said. 'We continue to evaluate our options.'

Mr Cunningham said a dual Asia-Pacific hub was an option FedEx was considering but he ruled out a dual hub in the Philippines. 'If we opted for a dual hub in the region, it would be Clark-Guangzhou or Subic-Guangzhou; the other options are single hubs at either Clark or Guangzhou.'

The extension takes FedEx's commitment at Subic Bay to 2010.

Mr Cunningham denied Philippine media reports yesterday that the firm would sign tomorrow a US$450 million deal to base itself at DMIA. 'That is categorically not true. What we have signed is an option and it involves a nominal amount,' he said.

FedEx has courted authorities in Guangzhou and DMIA for the past six months as it draws nearer to choosing the location of its future hub. Mr Cunningham said the decision would be made 'in the next 12 to 18 months'.

The US and China will try again next week to hammer out an air services agreement and Mr Cunningham said a significant liberalisation of the mainland regime would be required for FedEx to enjoy the flexibility it had in the Philippines.