Mayor, airport officials announce Federal Express hub expansion

INDIANAPOLIS—FedEx Express and Indianapolis International Airport will embark on a sweeping expansion at the FedEx Indianapolis Hub, with the company adding jobs and extending its lease at airport, Mayor Bart Peterson and Indianapolis Airport Authority officials announced today.

Under the expansion agreement, FedEx will add more than 600,000 square feet to its existing sorting facility, which includes a 400,000-square-foot, five-bay expansion, construction of a 175,000-square-foot secondary sort building and construction of two maintenance buildings totaling 48,000 square feet. FedEx also will extend its lease with the airport until 2028. The airport will spend $50 million to build as many as 14 new gates over the next two-plus years which will be leased by FedEx.

It is estimated that up to 800 additional employees could be hired under the expansion plan, which would bring the hub’s employment level to nearly 5,000 people.

“This expansion by FedEx Express solidifies Indianapolis’ reputation as one of our nation’s leaders in transportation and distribution,” Mayor Peterson said. “FedEx is the type of successful business that other cities envy, and it says a great deal about our city, our airport and local workforce that FedEx has committed to grow and expand in Indianapolis.”

“Since opening its Indianapolis Hub in 1988, FedEx Express has become a valued member of the city’s thriving business community and a key partner in ensuring the airport's continued growth and economic vitality,” added Lacy Johnson, president of the Indianapolis Airport Authority Board.

“The company's latest expansion also puts the airport in a stronger position to support local businesses by providing companies here and elsewhere with even better connectivity across the nation and, in fact, across the world,” Johnson said. “This expansion, which is being done without the use of any tax dollars, further establishes Indianapolis as one of the country's premiere distribution centers.”

Indianapolis is the second largest domestic FedEx Express hub, trailing only the company's facility at its world headquarters in Memphis.

“In deciding to once again expand its Indianapolis facility, FedEx is clearly demonstrating its long-term commitment to and confidence in the airport, the city and the region," Airport Director Patrick Dooley said. “FedEx not only is a valued business partner for the airport, but it's also a vital part of our community through its support of such worthwhile groups as Habitat for Humanity, the United Way, Indiana Black Expo, the Indianapolis Zoo and The Children's Museum of Indianapolis.”

“This project will help ensure that we have the required processing capacity for the added volume in Indianapolis,” David Bronczek, president and chief executive officer of FedEx Express, said. “For FedEx customers, it reaffirms our focus to have world-class facilities that allow us to provide an unmatched level of reliable shipping services across our global network.”

For the airport, the FedEx expansion also will mean additional landing fees, which will contribute to keeping landing fees affordable for passenger airlines, which today are focused on controlling the costs of operating at U.S. airports. FedEx accounted for 44.8 percent of the airport's overall landing weights in 2005, a number expected to grow after the expansion.

Under terms of the agreement announced today:

• FedEx Express will expand its existing 1.9 million-square-foot sort facility by more than 600,000 square feet, which includes additional gate, a new secondary sort facility and two maintenance buildings.
• IAA will build five wide-body gates at the sorting facility, which will then be leased back to FedEx. The gates will be completed by December 2006. FedEx uses all 38 wide-body gates currently at the Indianapolis Hub.
• FedEx will have options for up to nine more gates to be constructed by Dec. 1, 2008. Those gates would be built by the IAA and leased to FedEx. The airport would spend an estimated $50 million to build all 14 gates.

Another key component of the agreement is that FedEx will extend its lease at the airport for an additional 12 years, through 2028.

FedEx is by far the airport's largest cargo carrier, accounting for more than 2.2 billion pounds of cargo and more than 4.9 billion pounds of total landing weights in 2005. FedEx's presence has helped the airport become the ninth largest cargo airport in the country and the 20th largest cargo airport in the world.

Since FedEx opened its Indianapolis Hub in 1998 with 368 employees, the facility has undergone major expansion and increased its workforce to nearly 4,000. It’s growth was part of a five-phase strategy culminating with the $260 million 1988 expansion which nearly tripled the size of FedEx’s airport operations and, at the time, was the most expensive capital project in FedEx history.