- Investment of $1.4 billion
- 2,700 jobs, 600 of which are full-time jobs
- Will develop facilities over 920 acres of on-site airport property
- Construction will include a 3 million sq. ft. sorting facility and enough ramp space for up to 100 cargo jets
- Up to 40 based aircraft initially

Very impressive, exciting news and a big congrats to CVG and the greater Cincinnati community.

http://www.cincinnati.com/story/money/2 ... /97283034/

http://cvgairport.com/about/news/2017/0 ... ew-cvg-hub

http://www.bizjournals.com/cincinnati/n ... t-cvg.html

Wall Street hates with a passion companies who do things that don't fall into the street's view of what their core competencies are because they find it hard to value said companies. Hence the reason why the company I work for and many other companies don't own their own offices. Instead, we're forced to rent offices (at exorbitant rates) from insurance companies and real estate trusts. I wonder how long they will tolerate Amazon owning an air freight company?

Great news for CVG, no doubt. Will be interesting watching this venture grow. Doesn't DHL have/had a big operation there now?

[*]

Rbgso wrote:

Great news for CVG, no doubt. Will be interesting watching this venture grow. Doesn't DHL have/had a big operation there now?

Yep, DHL has its North American hub at CVG. It currently has 40-80 daily flights to pretty much all over the world.

Amazon is planning 200 daily flights, that activity should push CVG into one of the busiest Cargo airports in the world. They plan on begining operations as soon as April and will utilize DHL's facilities for the meantime.

Rbgso wrote:

Great news for CVG, no doubt. Will be interesting watching this venture grow. Doesn't DHL have/had a big operation there now?

Yep. They do. Any idea why CVG? I'd have loved to see this be in STL, but I am sure there is a reason related to tax incentives. Can't find the amount but would love to know what Amazon received in incentives.

TWA302 wrote:

Rbgso wrote:

Great news for CVG, no doubt. Will be interesting watching this venture grow. Doesn't DHL have/had a big operation there now?

Yep. They do. Any idea why CVG? I'd have loved to see this be in STL, but I am sure there is a reason Realtek to tax incentives. Can't find the amount but would love to know what Amazon received in incentives.

I hear it was the incentives that CVG and the State of Kentucky offered. It looks like $40 million immediately in tax cuts. Plus CVG will spend $5 million to help with initial infrastructure.

They are basing 40 Boeing 767-300ER's to begin with, operations begin this April using DHL's facility.

glbltrvlr wrote:

Wall Street hates with a passion companies who do things that don't fall into the street's view of what their core competencies are because they find it hard to value said companies. Hence the reason why the company I work for and many other companies don't own their own offices. Instead, we're forced to rent offices (at exorbitant rates) from insurance companies and real estate trusts. I wonder how long they will tolerate Amazon owning an air freight company?

Do you seriously think Jeff Bezos cares much about what "Wall Street" thinks? What if "they" won't "tolerate" it? What will their intolerance amount to? Will they stop using Amazon Prime?

Would have been interesting to take this up the road to DAY. They could have used the existing former Emery Worldwide facility.

glbltrvlr wrote:

Wall Street hates with a passion companies who do things that don't fall into the street's view of what their core competencies are because they find it hard to value said companies. Hence the reason why the company I work for and many other companies don't own their own offices. Instead, we're forced to rent offices (at exorbitant rates) from insurance companies and real estate trusts. I wonder how long they will tolerate Amazon owning an air freight company?

Why wouldn't freight and logistics be part of Amazon's core competency? I think others are also correct that Amazon doesn't care. In 2001 Wall Street thought they were dead and now they are a juggernaut.

TWA302 wrote:

Rbgso wrote:

Great news for CVG, no doubt. Will be interesting watching this venture grow. Doesn't DHL have/had a big operation there now?

Yep. They do. Any idea why CVG? I'd have loved to see this be in STL, but I am sure there is a reason related to tax incentives. Can't find the amount but would love to know what Amazon received in incentives.

Lots of existing warehouses in the area with somewhere in the ballpark of 10,000+ employees. Not a bad central location, either. I'm sure KY offered some sweet incentives as well.

Back when CVG was a major hub for Delta, they frequently pitched CVG as an ideal location similar to ATL, just in the northern half of the U.S. Its a major reason DHL uses CVG as a hub, being central to Asia/Europe/Latin America, while providing 2 hrs flight to most of the population in the U.S.

TWA302 wrote:

Rbgso wrote:

Great news for CVG, no doubt. Will be interesting watching this venture grow. Doesn't DHL have/had a big operation there now?

Yep. They do. Any idea why CVG? I'd have loved to see this be in STL, but I am sure there is a reason related to tax incentives. Can't find the amount but would love to know what Amazon received in incentives.

STL is indeed very well situated geographically, but CVG more centrally located population-wise, which I think was probably an important consideration for their Prime-focused operation.

It seems to me like Amazon is slowly absorbing DHL into its network.

flyguy89 wrote:

TWA302 wrote:

Rbgso wrote:

Great news for CVG, no doubt. Will be interesting watching this venture grow. Doesn't DHL have/had a big operation there now?

Yep. They do. Any idea why CVG? I'd have loved to see this be in STL, but I am sure there is a reason related to tax incentives. Can't find the amount but would love to know what Amazon received in incentives.

STL is indeed very well situated geographically, but CVG more centrally located population-wise, which I think was probably an important consideration for their Prime-focused operation.

CVG has the room for multiple stages of expansion.

glbltrvlr wrote:

Wall Street hates with a passion companies who do things that don't fall into the street's view of what their core competencies are because they find it hard to value said companies. Hence the reason why the company I work for and many other companies don't own their own offices. Instead, we're forced to rent offices (at exorbitant rates) from insurance companies and real estate trusts. I wonder how long they will tolerate Amazon owning an air freight company?

I suspect that there will not be too much commotion so longs they are making money.

I do think CVG makes sense. Since they had the DL hub, they have lots of infrastructure in place just looking for a tenant.

lavalampluva wrote:

It seems to me like Amazon is slowly absorbing DHL into its network.

Huh?

lavalampluva wrote:

It seems to me like Amazon is slowly absorbing DHL into its network.

Wouldn't the fact that Amazon has decided to intentionally plant it's growing footprint smack dab in DHL's lap be an indication they aren't done with their expansionist plans?

flyguy89 wrote:

- Investment of $1.4 billion
- 2,700 jobs, 600 of which are full-time jobs
- Will develop facilities over 920 acres of on-site airport property
- Construction will include a 3 million sq. ft. sorting facility and enough ramp space for up to 100 cargo jets
- Up to 40 based aircraft initially

Incredible announcement for airport and the regional economy.

More heavies than regional jets at CVG in a few years? Could it happen?

CVG isn't only pretty central, all of their operators flying for them, Atlas Air, ABX, and ATI, have hubs there with flying for DHL. This means reduced crew costs, easier maintenance, and all the other good stuff I cant think of atm. Plus, being able to build their own offices and sorting facilities (they probably like them a special way), vast room to expand, and $45 million in immediate taxbreaks makes the move even clearer. Prime Air will develop between 18R/36L and 18C/36C from taxiway J up to the perimeter roads, plus some space between 18C/36C, DHL's space, and the perimeter road.

11 distribution centers just in KY, plus the 5 surrounding Indianapolis (2hrs) plus the 2 outside Columbus (2hrs) for 18 distribution centers in the state or within a 2hr drive (wow).

No word on where/when they will start building, will be interesting to see how quickly they will try to build this, plus if they build it all or do it in chunks.

Edit: added last two paragraphs

Great news for CVG! Amazon has tons of data collected over so many years so they surely know how the cost of the fleet will be offset. In fact, having a fleet of its own will help them keep the shipping costs down so Wall Street should be happy.

I created this for Wikipedia of the layout, the hub is going to be massive:


WCPO interviewed someone who said CVG was going to grow into the 3rd or 4th largest cargo airport in the world, and since they are adding parking room for 100 jets at a time, they are going to expand way beyond the initial 40 767's. I hope they eventually acquire some 777F's and 747-8F's!

cvgComair wrote:

I created this for Wikipedia of the layout, the hub is going to be massive:


WCPO interviewed someone who said CVG was going to grow into the 3rd or 4th largest cargo airport in the world, and since they are adding parking room for 100 jets at a time, they are going to expand way beyond the initial 40 767's. I hope they eventually acquire some 777F's and 747-8F's!

What will happen to Concourse C?

blacksoviet wrote:

cvgComair wrote:

I created this for Wikipedia of the layout, the hub is going to be massive:


WCPO interviewed someone who said CVG was going to grow into the 3rd or 4th largest cargo airport in the world, and since they are adding parking room for 100 jets at a time, they are going to expand way beyond the initial 40 767's. I hope they eventually acquire some 777F's and 747-8F's!

What will happen to Concourse C?

Concourse C is scheduled to be removed sometime this year, however the project seems to be on hold with all the other construction going on. Terminals 1 and 2 were torn down early last year and they are building a new Rental Car facility in its place. The extension on Concourse A is being planned currently and should start sometime in the next few years. With all the construction and now Amazon coming, I think the removal of Concourse C will be on hold as it is not in the way of anything.

cvgComair wrote:

blacksoviet wrote:

cvgComair wrote:

I created this for Wikipedia of the layout, the hub is going to be massive:


WCPO interviewed someone who said CVG was going to grow into the 3rd or 4th largest cargo airport in the world, and since they are adding parking room for 100 jets at a time, they are going to expand way beyond the initial 40 767's. I hope they eventually acquire some 777F's and 747-8F's!

What will happen to Concourse C?

Concourse C is scheduled to be removed sometime this year, however the project seems to be on hold with all the other construction going on. Terminals 1 and 2 were torn down early last year and they are building a new Rental Car facility in its place. The extension on Concourse A is being planned currently and should start sometime in the next few years. With all the construction and now Amazon coming, I think the removal of Concourse C will be on hold as it is not in the way of anything.

Once Concourse C is gone, will Concourse B ever be extended? That is a nice map you made.

N212R wrote:

lavalampluva wrote:

It seems to me like Amazon is slowly absorbing DHL into its network.

Wouldn't the fact that Amazon has decided to intentionally plant it's growing footprint smack dab in DHL's lap be an indication they aren't done with their expansionist plans?

That was basically my point.

blacksoviet wrote:

cvgComair wrote:

blacksoviet wrote:

What will happen to Concourse C?

Concourse C is scheduled to be removed sometime this year, however the project seems to be on hold with all the other construction going on. Terminals 1 and 2 were torn down early last year and they are building a new Rental Car facility in its place. The extension on Concourse A is being planned currently and should start sometime in the next few years. With all the construction and now Amazon coming, I think the removal of Concourse C will be on hold as it is not in the way of anything.

Once Concourse C is gone, will Concourse B ever be extended? That is a nice map you made.

Thanks! Concourse B will stay the same and be used as long as Delta keeps its current service level. In the unlikely scenario that Delta expands its flight options, Concourse B could be extended, though they would need to reach roughly 120-140 daily flights before that happens. If Delta releases its lock on Concourse B (they essentially own it currently) and downsizes its flights, plus WN/Frontier/Allegiant do not continue expanding, the airport will consolidate all carriers into Concourse A, and Concourse B will be removed due to cost issues. However, due to current expansion by all carriers, both Concourse A (extended) and Concourse B will be needed in the 2030 timeframe. This is so far in the future, though, so a lot can change in the airline industry by that time, resurgence in Delta's operations, focus city by WN, Frontier connecting hub, who knows. If any of these happen, Concourse B might be expanded, but Concourse A will be the first to be expanded (in the 2018-2019 timeframe).

SFOtoORD wrote:

glbltrvlr wrote:

Wall Street hates with a passion companies who do things that don't fall into the street's view of what their core competencies are because they find it hard to value said companies. Hence the reason why the company I work for and many other companies don't own their own offices. Instead, we're forced to rent offices (at exorbitant rates) from insurance companies and real estate trusts. I wonder how long they will tolerate Amazon owning an air freight company?

Why wouldn't freight and logistics be part of Amazon's core competency? I think others are also correct that Amazon doesn't care. In 2001 Wall Street thought they were dead and now they are a juggernaut.

Exactly. Wal-mart is another example; one of their biggest core competencies is supply chain management and logistics. I would imagine that Amazon, as one of the biggest retailers in the world, would also have a tremendous focus on logistics and supply chain management as a core competency.

lavalampluva wrote:

It seems to me like Amazon is slowly absorbing DHL into its network.

Probably coincidence, but Amazon's "The Grand Tour" program has DHL as a sponsor of sorts.

Very good news for CVG. With jobs will come more airline service. Maybe Southwest can build a good size station in the future at CVG.

glbltrvlr wrote:

Wall Street hates with a passion companies who do things that don't fall into the street's view of what their core competencies are because they find it hard to value said companies.

What is Amazon's "core competency"? If you think Amazon is just this monstrous shipping and shopping company, you are grossly mistaken.

Amazon Web Service (AWS) is the world's largest cloud computing provider, so is Amazon a cloud company?

Amazon also owns Twitch which is among the five highest traffic video streaming sites in the world, so is Amazon a video company?

The fact is, Amazon is this 1000 pound gorilla with multiple competencies. Wall Street won't flinch.

Logistics can be an asset based venture owning trucks and warehouses as an example. but the internatioal freight forwarding is usually non-asset based as it uses Airline servives as well as , ocean shipping and whatever else it takes to get the customers gods from A to B. Fred Smith invented the Integrator type of logistics and Jeff Bezos takes the logic step from building up an Internet shop that is based on logistics into an asset-based logistics providor.

Amazon will still be customer to DHL, UPS and others in that market for the last mile, but they have the in-house volume to be able to do things on their own and more important, they have the Money to finance all that as well.

May be Wall Street don't like them because they cannot make too much Money on them, but who cares beside Wall Street.
BTW empty space can and will be marketed to third parties and that's where the head-on competition with DHL will take place.

Great news! This along with the announcement yesterday of the 3 new Frontier destinations and with WN coming, it's nice to see continuing growth at CVG.

glbltrvlr wrote:

Wall Street hates with a passion companies who do things that don't fall into the street's view of what their core competencies are because they find it hard to value said companies. Hence the reason why the company I work for and many other companies don't own their own offices. Instead, we're forced to rent offices (at exorbitant rates) from insurance companies and real estate trusts. I wonder how long they will tolerate Amazon owning an air freight company?

They already do quite a bit that is not in their core. Sell us all types of stuff is now almost a loss. Most of their profit center is from running data centers and renting out capacity.

So ILN is going to lose again? I know that ATSG maintenance is still there but the existing former Airborne/DHL sorting facilities could have been useable.

cvgComair wrote:

blacksoviet wrote:

cvgComair wrote:

I created this for Wikipedia of the layout, the hub is going to be massive:


WCPO interviewed someone who said CVG was going to grow into the 3rd or 4th largest cargo airport in the world, and since they are adding parking room for 100 jets at a time, they are going to expand way beyond the initial 40 767's. I hope they eventually acquire some 777F's and 747-8F's!

What will happen to Concourse C?

Concourse C is scheduled to be removed sometime this year, however the project seems to be on hold with all the other construction going on. Terminals 1 and 2 were torn down early last year and they are building a new Rental Car facility in its place. The extension on Concourse A is being planned currently and should start sometime in the next few years. With all the construction and now Amazon coming, I think the removal of Concourse C will be on hold as it is not in the way of anything.

Concourse C is already in the process of being torn down. They've started doing the small stuff and it won't be long until they bring the heavy equipment in to finish it off.

lavalampluva wrote:

N212R wrote:

lavalampluva wrote:

It seems to me like Amazon is slowly absorbing DHL into its network.

Wouldn't the fact that Amazon has decided to intentionally plant it's growing footprint smack dab in DHL's lap be an indication they aren't done with their expansionist plans?

That was basically my point.

Suppose there had been enough space for Amazon to build this facility at either Memphis or Indianapolis. Would you have concluded it was Amazon's intention to absorb FedEx or UPS?

All three major air freight companies, DHL, FedEx and UPS will continue to provide services to Amazon. There is more than enough work to go around, and much more coming from businesses moving into or expanding Internet retailing operations.

Just look at the number of aircraft presently in use by DHL, FedEx and UPS (plus some others) and compare that to 40-100 aircraft that might reasonably come into the Amazon fleet (leased through others). Amazon Air will just be a drop in that market. Maybe a couple of drops.

yes, there will be Airlines and Integrators that still get Business from Amazon.

But Prime Air is a new kid on the block that has a completely new busines model, an Integrator not only integrating pick up line haul and delivery but on top of that also the Internet retail Business.

The next new kid on the block could be Jack Ma with Alibaba

Interesting. How will this affect their domestic operations? Will CVG be a hub for their outbound domestic flights, like to ABE?

flyguy84 wrote:

Would have been interesting to take this up the road to DAY. They could have used the existing former Emery Worldwide facility.

Insufficient size to handle 40 x 763. I also think part of that facility is under use by another business.

FX1816 wrote:

So ILN is going to lose again? I know that ATSG maintenance is still there but the existing former Airborne/DHL sorting facilities could have been useable.

Yup. We have now taken it in the shorts (or sorts if you will) twice in the last 10 years.

As for the pilots and mechanics for the aircraft will they be provided by the leasing company?

Well this is what the big announcement was that was being discussed on the OAG thread, not some "massive" DL expansion as some people where thinking.

CVG was about as close to a turn-key airport as you could get for this type of operation. There are only a few viable candidates in the right geographic area of the country and the fact that the existing runway/airfield, landside infrastructure, highway connections, etc all exist in made in a natural fit.

It will be interesting to see how this operation evolves over time.

Not to toot our own horn, but there is a lot of information and very calm, knowledgeable discussion of all things Prime-Air-related over at the Amazon Fleet Growing thread, including this subject. Feel free to visit.

Looking forward to great spotting and photo opportunities with this announcement!

This is what CVG needs after delta cut a lot flights

How long before FedEx or Amazon start to openingly discuss using the idea commercial passenger service to same day delivery a premium upcharge, next day the new 2 day and 2 day the old standard 3 to 7 days.

Q400 combi and ATR combis would seem ideally suited for that type of mission. Using one to support the other and not relying on just one for the economics. Talk about connecting mid sized markets without changeovers and bypassing fortress hubs. Morning and mid day banks for same day and supplimentary overnight parcels and late afternoon and evening flights for majority of overnight and 2 day parcels. Buyin a bunk bed from pottery barn online in the morning and assembling it that very night.?

Will they be flying any 762s?

Looks like Delta is joining the action, 6% increase in capacity:
http://www.wcpo.com/news/local-news/boo ... -southwest
http://news.delta.com/expanding-service ... cincinnati

They are adding frequency and capacity to a handful of routes. Big change is that Seattle will be year-round again. They are adding in mostly business routes, but MCO/FLL/RSW will see some boosts as well.

This is first time in a very very long time Delta has said they were committed to CVG as a hub while actually adding flights.

Is 200 arrivals/departures a day a reasonable number for 40 767 aircraft, or have they essentially told us that they are looking for a major fleet expansion in the mid-long term?

CVG is also the minimum-cost location to run a transit hub. No coincidence that SDF and MEM (UPS and FX, respectively) are nearby. Now, whether it is a transit hub or mainly a distribution point, is a little bit hazy. AMZN may intend to capture both with this.