It seems not a month goes by in which Denver International Airport isn’t touting a new passenger record.
But just a quick drive on the tarmac away from where all those people are getting on and off jets, another set of milestones are being achieved on the airport’s cargo ramp. That’s where the percentage increase in pounds of air freight this year is actually eclipsing the percentage increase in passengers taking to the skies from the Mile High City.
“It has jumped,” said George Tzompanakis, a UPS worker who was busily hurrying around a buzzing cargo ramp on Friday. “The volume’s increased, I would say, probably three or four times.”
Through April, the amount of cargo passing through Denver airport jumped to 207.5 million pounds, a 10.3% increase over the same period in 2018. Passenger traffic increased 4.5% in that same period, to more than 20.2 million people.
Both cargo and passenger traffic at DIA are on pace to break records in 2019.
Passenger growth from 2014 to 2018 has been stronger overall than cargo and the airport cautions against making a direct comparison between the two because they are such different sectors of operation and represent vastly different amounts of revenue for the hub. But the rise in freight still tells an important story.
There’s a quick and easy explanation for the sharp increase in Amazon, whose rise is the main driver of the higher numbers. The online retailer has been increasing its presence in the Denver metro area, building new warehouses and distribution centers. Starting a year ago, it also began to fly its massive Boeing 767 “Prime Air” planes into the city.
But more broadly, the hike in pounds of cargo passing through DIA is an important indicator of the state’s economy.
“It’s really a reflection of the economic activity in the area,” said Gisela Shanahan, Denver International Airport’s chief financial officer. “That in turn translates to additional traffic from a passenger perspective. It’s kind of a cycle that just sustains itself. So, (as) you get more businesses in the area that generate more cargo in the area, that generates more passenger traffic.”
The airport’s annual economic impact for Colorado is estimated by the airport to be more than $26 billion, making it one of the state’s biggest economic engines.
The boost in cargo traffic has meant more revenue for the airport — cargo revenues for the airport were $18.8 million in both 2016 and 2017 and $19.2 million in 2018, money generated by landing fees and facility rentals.
“It’s a pretty significant number,” Shanahan said. “But from a revenue perspective … it is not a significant number in the overall revenue percentage of the airport.”
By comparison, commercial airline revenues, also comprised of landing fees and facility rentals, totaled more than $350 million and was rising over those three years.
But one area that could be lucrative for the airport is the potential expansion of cargo operations and facilities. Should more freight planes start flying into DIA, the carriers could eventually want to build a maintenance hangar or grow the ramp where the jets are parked. That in turn would mean more jobs and more planes.
And having the upswing in numbers is a good thing to show to existing carriers looking to expand their presence and potential new entrants who want to see an opportunity for growth.
“We have begun to look at that and what are our longer-term needs are to ensure that we have those facilities to match the demand for cargo aircraft increasing,” Shanahan said.
Shanahan said it’s possible that Denver could someday become a freight hub, like Louisville, Kentucky, or Memphis, Tennessee, but that’s likely a long ways off.
Mike Boyd, president of the Evergreen-based aviation forecasting and consulting firm Boyd Group International, cast some doubt on a mass air-cargo expansion in the Mile High City.
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“For heavy-duty cargo, there’s not much of a future because of where we are,” he said. “You don’t ship big things by air cargo unless you’re shipping it to where stuff is made” or being distributed.
There are roadblocks in Denver, he said, including already busy skies filled with planes and the airport’s high altitude, which can make it harder for planes to take off.
Shanahan said there will likely be a leveling out of air-cargo numbers at Denver International Airport in the coming months, but that they haven’t forecast exactly what it’s going to look like. Air freight can be more difficult to predict than passenger numbers.
“It is not something where you see that (pace of) growth,” she said. “It’s very hard to predict with any level of accuracy.”
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