A month after revealing where it’s hotly sought after “HQ2” would be built, Amazon.com and officials in Fort Worth disclosed that work on the company’s first purpose-built regional air hub is already underway at Fort Worth Alliance Airport.
Last month the Seattle-based company said it will split its second headquarters operation between New York City and Arlington, Virginia. Prior to the announcement officials in the Dallas-Fort Worth area - and most particularly in Dallas itself - believed they were very close to winning arguably the biggest, most high-profile corporate headquarters bidding contest ever. However, the quite palpable disappoint in North Texas over losing that contest was largely eliminated by Tuesday's announcement in Fort Worth.
Amazon Air – which began operations in 2016 under the name Amazon Prime Air before dropping “Prime” from its name last year to distinguish the air carrier operation from the “Prime Air” drone-based home delivery service Amazon also is working to create – currently leases 40 Boeing 767 cargo aircraft. They are operated for it by contract cargo airlines Atlas Air Worldwide Holdings and Air Transport Services Group.
But don’t expect the Amazon Air fleet to remain that size for long. Multiple news reports have said that Amazon Air officials are scouring the global market for more used 767 freighters to add to its fleet, though a tight market could force Amazon Air to use similarly sized Airbus A330 freighters. And in announcing plans to lease existing facilities and to build additional facilities to serve as Amazon Air’s primary hub at the Cincinnati/Northern Kentucky International Airport in Hebron, Kentucky, company officials said that hub eventually could be the home base of 100 or more cargo planes. It is not yet clear whether Amazon Air intends to formally launch its own certificated cargo airline at some point or will continue to use third-party vendors exclusively to operate its air fleet.
The vast majority of products bought through the Amazon online shopping platform currently are delivered by UPS, FedEx Express or the U.S. Postal Service. But analysts suggest that Amazon can save between $2 and $4 per delivered package by using its own fleet of planes. Clearly a fleet of 40 planes, or even a fleet of 100 planes, won’t come close to eliminating Amazon’s huge need for third-party delivery vendors. But shifting 40 planes' worth of delivery work in-house could save the company as much as $2 billion from its expected 2019 operating costs, according to an analysis by Morgan Stanley.
The new regional air hub being built at Fort Worth Alliance Airport is the first that the company has been able to design from the ground up. The facility is expected to be operational some time in 2019, but company officials have not yet said how much they expect to invest in it or what the expected package volume and daily flights totals will be. They did say, however, that more than 50% of the land involved won’t be built on immediately. But it will be available for aviation and sorting facilities expansion as the Alliance operation grows.
Alliance Airport, which is city-owned and operated, is the centerpiece of the sprawling 26,000-acre Alliance Texas light manufacturing and multi-modal transportation project kicked off 30 years ago by Ross Perot Jr. and his Hillwood development company. Always envisioned as an “industrial” airport with no commercial passenger service, Alliance Airport is about 15 miles north of downtown Fort Worth and 12 miles west of Dallas-Fort Worth International Airport. It features one very long runway that enables fully loaded cargo planes to take off on long-distance routes to Asia, Europe, deep South America, Africa and the Middle East. FedEx has operated a large southwest regional sorting and air hub there for more than two decades while a number of other aviation parties, including the federal Drug Enforcement Agency, have large aviation-related operations there as well. Additionally, both FedEx and UPS operate large sorting facilities at DFW Airport that handle mostly packages headed to or from the local North Texas market. Neither of those facilities operates as a true hub.
The huge Alliance Texas development stretches across north Fort Worth and several suburban towns in north Tarrant and south Denton Counties. Literally hundreds of manufacturing, warehousing, and distribution centers - along with thousands of new homes plus the retail and services businesses needed to support all that growth - have been built in the Alliance Texas development over the last 30 years. In addition to the airport itself, Alliance Texas features large BNSF and Union Pacific rail yards and arguably the best, most complete, and most advantageously-located network of Interstate and U.S. highways in the nation.
Though it is still far short of the 50%-developed mark, Alliance Texas is home to companies that employ more than 50,000 people. About 44 million square feet of space representing more than $8 billion in private investment has been built there already. And the opening of an Amazon Air hub at Alliance Airport is expected to attract to the development many more companies that want to reduce costs by being closer to Amazon Air’s new hub and its parent company’s fulfillment center, which already exists in the Alliance Texas development.
Though not the only factor, Alliance Airport and the Alliance Texas development are major factors in the Dallas-Fort Worth-Arlington metropolitan area’s new status as the fastest-growing major metropolitan area in the nation. Currently the region is adding about 146,000 new residents annually. Fort Worth, which 35 years ago at around 300,000 people was only a third the size of Dallas in population and ranked in the mid-30s among America’s largest cities, now is home to around 900,000 people, to Dallas’ 1.4 million. A year ago Fort Worth ranked as the 15th-largest city a year ago and likely will be the 12th or 13th largest in rankings due out in the spring. And, notably, because it is among the very largest cities in American in physical size (it covers more than 350 square miles in parts of five big Texas counties), still has huge swaths of undeveloped land, and is a key part of the economically booming North Texas market, Fort Worth’s growth potential continues to be very significant. Altogether, the DFW metropolitan area, which stretches 75 to 100 miles in all directions from its center point in Arlington, is home to about 7.4 million people.
Amazon Air, by choosing to build its first all-new hub in the middle of such economic dynamism, clearly expects to see rapid and large-scale growth of its operation at Alliance Airport.
