The air freight business kept San Francisco Airport’s head above the water during the pandemic, acknowledges Airport Director Ivar Satero in an interview with CargoForwarder Global (CFG). “We’ve seen a shift from passenger to cargo,” he said in the exclusive CFG interview. As a sort of offering of gratitude to the freight industry, the executive announced a redevelopment plan aimed at modernizing existing freight buildings and replacing outdated facilities with new ones.
SFO, located directly on the Pacific coast, is an airport that lives primarily from passenger traffic. The iconic Californian city is a tourist hotspot and equally a sought-after destination for business travelers because of the multitude of companies based in the region: global corporations such as HP, Alphabet (Google), Cisco Systems, as well as international big players including SAP, Fujitsu, Ericson, Volkswagen, and Siemens. Complementing this who's who of global business is a multitude of mid-sized and smaller firms located in the Silicon Valley area south of SFO, down to San José and Saratoga.
Passenger traffic comes first, but ups cargo, too
So, no wonder that pushing the passenger sector further ahead stands on top of the management’s priority list since it is SFO’s bread and butter business and must be attended to. However, how indispensable cargo is as a crucial pillar for revenues was demonstrated during the revival of domestic aviation in the U.S., as carrying freight shipments in the bellies of passenger aircraft often made the difference between the loss or profit of a flight. That said, Mr. Satero stresses that economic viability is a fundamental requirement for a successful enterprise. “As a major economic engine for the region, our continued traffic growth benefits the surrounding communities with jobs and economic vitality.”
At the same time, however, he cites the airport's biggest problem: its spatial limitations. Growth must therefore take place within the fence because new areas for its expansion are not available. As a consequence, this requires a more efficient use of existing facilities, and their conversion or renovation if poorly performing. “Operational efficiency is a goal of the Airport’s Strategic Plan and a focus of all Airport Divisions. An efficient operation means that we can provide the best experience at minimal cost,” Mr. Satero stresses.
Cargo is lifted to the next level
SFO’s strategic plan includes the redevelopment of the infrastructure at the West Cargo Area, since it no longer meets today's requirements, the Airport Chief concedes. According to him, 3 of the 4 existing cargo buildings will be taken down and built anew to raise the handling quality, speed up the distribution of goods, and enable quicker turnarounds of aircraft; hence, lift the entire freight throughput to a higher level. “We are able to design, construct, and finance the project with our own funds, supplemented by bank loans at standard market conditions,” he states. Whether SFO will apply for partial financing from the fund recently passed by the Senate in Washington for the modernization program of U.S. infrastructure (CargoForwarder 15AUG21) is currently an open question.
Asked about the timeframe of the project, the manager speaks of 6 to 7 years needed to accomplish the renovation of the West Cargo Area. Most of the shipments processed in SFO consist of time critical and high value items, with Amazon being the biggest player.
Freighters remain a rare species
“Their cargo planes usually use one of our two longest runways for takeoff and landing (28R and 28L), and these are the same runways that passenger planes use as well. Generally, after arrival, these aircraft will taxi to the cargo facilities near the North Field,” explains Francis Tsang, Strategic Communication Advisor - External Affairs.
However, freighters are still a rare species at the Bay Airport, but are gaining ground thanks to integrator FedEx, Amazon’s Prime Air, and DHL Express.
From January to April 2021, 141,000 tons were handled at SFO (2020: 151,000 tons) of which roughly 66% was contributed by intercontinental traffic. The bulk of it – roughly 75% - traveled in the lower deck compartments of passenger jetliners.
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