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Old Posted Aug 12, 2010, 9:10 PM
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Midwest China Hub - "The Big Idea"

Decision time looming on China Hub project
By Tim Logan tlogan@post-dispatch.com > 314-340-8291 | Posted: Thursday, August 12, 2010 12:05 am |


St. Louis officials with Chinese leaders

The region's bid to land Chinese air cargo flights is getting down to crunch time.

After two and a half years of talks and planeloads of trade delegations crisscrossing the Pacific, the political and business leaders pushing the project say they will know by New Year's if their efforts will take off.

A key study they hope can prove a business case for the flights is halfway done, and so far, said Mike Jones, chairman of the Midwest China Hub Commission, signs are pointing in the right direction. Yet another round of talks is coming up, with Missouri Sens. Christopher "Kit" Bond and Claire McCaskill set to lead a group to Beijing this month. A few weeks later, top Chinese aviation officials and airline executives are due to visit St. Louis to launch a joint study of just how this might work.

"At that point we're going to be in real discussions on the mechanics of this," Jones said. "And I think we'll know if we have the framework of a deal by year's end."

Helping Lambert's case is a strong rebound in global freight traffic. Through June, 28 percent more goods had flown through the skies this year than last, according to industry trade groups, and demand is now back above prerecession levels. Trade between Asia and North America is predicted to grow faster than average in the years to come, and flights heading west — key to Lambert's effort and U.S. job creation — are expected to make up two-thirds of that growth, says cargo leasing company Atlas Air Worldwide.

"The volume of activity we need is there," Jones said. "What we have to do is sell St. Louis."

But that, experts say, comes with steep challenges in an air cargo industry accustomed to flying international freight into established hubs such as Chicago, Atlanta and Dallas.

"A significant amount of export cargo" will have to be won away from those airports if Lambert hopes to succeed, according to a preliminary report by the Hub Commission's consultants, Houston-based Aerostrata LLC. And industry experts say that will be difficult.
Cargo 'Travel agents'

Most freight, especially overseas freight, is in the hands not of airlines but of freight-forwarding firms — sort of the travel agents of the cargo industry — who rent space on both passenger and cargo planes to get goods from Point A to Point B. The more international flights an airport has, said Mike Webber, a cargo consultant based in Overland Park, Kan., the more options those forwarders have. That gives the big hubs — with their taxiways full of foreign-flagged planes — a huge built-in advantage.

Source To Read More: Decision time looming on China Hub project

Other Links:
BOND: CHINESE ON BOARD WITH MIDWEST-CHINA HUB
Bond: Chinese airlines needed for Midwest trade hub - St. Louis Business Journal
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