Strong passenger growth at CVG fuels expansion, partnerships

The Cincinnati/Northern Kentucky International Airport (CVG) experienced year-over-year local passenger growth of at least 20 percent for the fourth consecutive month in October, making it 23 of the past 25 months with year-over-year growth.

October was the airport’s best overall month since June 2006. More than 257,700 passengers originated here, and total enplanements (including connecting passengers) increased 9.5% compared to October 2014. Cargo tonnage also increased 6.1 percent over the same month last year.
Candace McGraw
“We are experiencing our best year of passenger boardings in over a decade,” CVG Chief Executive Officer Candace McGraw says.

Local traffic is up 16.7 percent so far in 2015 vs. 2014, with total enplanements up 6.6 percent.

Bobby Spann, CVG Vice President of External Affairs, says the local passenger increase is primarily due to the growth of low-cost airlines Allegiant and Frontier.

“Frontier started with six flights a week to Denver in May 2013, and Allegiant came about a year later,” Spann says. “CVG now has more than 100 low-cost carrier flights a week.”

Capacity has also been added by the traditional airlines, with American, Delta and United all starting to use larger aircraft to replace their 50-seat regional jets.

Spann says CVG has slowly but surely turned around two important passenger ratios as it adapts to life after its Delta hub heyday. Back then, 80 percent of the airport’s traffic consisted of people making connections and only 20 percent were locals.

“In October, CVG’s passengers were 85 percent local origination and 15 percent connecting passengers, which opens more seats to locals,” he says.
Bobby Spann
The second ratio CVG has worked to change is the percentage of local business-to-leisure passengers. At the height of Delta’s hub, 75-80 percent of local traffic at CVG was business-oriented travelers; today business travelers make up only 60 percent of local originations.

“We’ve been trying to diversify that mix to include more leisure travelers, adding weekend charters and the low-cost Allegiant and Frontier flights, many of which are to vacation destinations,” Spann says. “By improving the mix we’ve brought more business to CVG on weekends and created more opportunities for growth than in the past.”

Another attempt at diversifying has paid off in CVG becoming a top 10 cargo airport in North America by serving as one of DHL’s three global super-hubs. DHL has begun a $100-million expansion, with completion scheduled for the end of 2016.

“DHL is definitely seeing more business growth at CVG and business growth worldwide,” Spann says. “Their package-handling capacity will increase as they complete pieces of the expansion, so we should see gradual, continuous growth over the coming year.”

Spann explains that DHL accounts for almost 98 percent of CVG’s cargo traffic now and as the company grows so will the airport. He says CVG has already reworked several taxiways to allow DHL more room to park planes overnight and will continue to support DHL’s growth in every way possible.

Four other expansion projects are penciled in on CVG’s 2016 calendar, starting with Allegiant’s new base of operations that’s scheduled to open in January. The airline will start staging three planes here overnight, Spann says, and will hire local pilots, flight attendants and support personnel — more than 100 new direct employees based at CVG.

PSA, a regional aircraft subsidiary of American Airlines, is planning to open a full-service maintenance base and a crew base at CVG. Spann says PSA likely will need to hire local employees as well but hasn’t heard details yet.

CVG has contracted with O’Rourke to begin demolishing the old concourses 1 and 2 in January to create space for a consolidated rental car facility. Spann says a conceptual design has been finished and additional design work on buildings and associated roadways will commence in 2016.

“We’re shooting for a 2020 completion of the new rental car area,” he says. “It’ll make the airport more user-friendly because passengers won’t need to take a bus any more to the rental agency lots.”

Finally, Dermody Properties leased 52 acres of land from CVG in order to develop 900,000 square feet of warehouse space on behalf of online retailer Wayfair. When completed in 2016, the building will offer more than 20 acres of space under roof for 24/7 fulfillment and shipping operations.

“Wayfair will be offering lots of high-wage jobs, and CVG is working to help them recruit new workers,” Spann says. “We know there’s a talent gap in Northern Kentucky, and want to help our business partners attract and retain talent.”