Cargo Airline Looks at MidAmerica Airport
Investors Seek Financing for Operation
BELLEVILLE (July 21, 2000) - A group of investors is working to finance a $100 million proposal to operate a small cargo airline out of MidAmerica Airport that could produce nearly 270 jobs in five years.
The company, Phoenix Provider Aircraft Corp, would contract with cargo giants such as FedEx and United Parcel Service. It also proposes to run an aircraft maintenance business as a sideline.
"We've been working to get the business organized, planned and the financing in order," Vice President Gene Boring said. "Our hope is if everything goes right, we would like to be operating out there next summer."
Boring would not disclose the identity or number of investors pending financing of the project. The group began researching the market last fall, then incorporated the first part of this year, he said.
The St. Clair County Board voted June 26 to back the project, approving a resolution to issue $53,140,892 in bonds.
"We are looking for a venture capitalist to put together the whole package," Boring said. "The county isn't borrowing money for the bonds. They're our bonds. We'll be liable to pay those back." The other $47 million of the $100 million project will be venture capital money, Boring said.
The county has not offered Phoenix Provider any financial incentives, but will explore federal or state funding possibilities, said Boring and MidAmerica Airport Director Floyd "Rick" Hargrove.
"This is still a 'what-if,'" Hargrove said, adding that Phoenix Provider is not the only company trying to pull together financing for a project at MidAmerica Airport. "There are several others out there hunting for money that would like to come to MidAmerica," Hargrove said. "It's just: Can they find the financing?"
Phoenix Provider proposes to build a 100,000-square-foot hangar and cargo area and a 20,000-square-foot office area near the northwest end of the runway. It would have a fleet of about 10 twin turbo-prop cargo aircraft. The company would start out small and within five years provide an estimated 270 full-time jobs, Boring said.
"We've talked to all the major carriers: FedEx, UPS, DHL Express," Boring said. "Almost all of the big guys charter aircraft because sometimes they get more cargo than they have carrying capacity, and it's not economical for them to fly a large airplane that may only be a third or a quarter full to get the amount of cargo they need to a smaller destination."
Cargo is currently shipped by truck through Southern Illinois to Lambert-St. Louis International Airport, Boring said.
"Our goal would be to try to capture that," he said. "We think that MidAmerica is going to be really a center of transportation. We would like to capture that market, be able to fly out of there to say Memphis for FedEx, maybe Indianapolis."
Phoenix Provider would fly to destinations throughout the country as well as Canada and Central America, Boring said.
Boring said he has worked in the aviation industry as a program manager and in production and maintenance. He added that he is a retired U.S. Air Force lieutenant colonel, but was never stationed at Scott Air Force Base.
"I spent a short time with a large defense contractor, then kind of heard about this through some contacts," he said. "It sounds like a great opportunity here. I want to see what I can do."
Phoenix Provider is currently working out of office space on State Street in East St. Louis. "We're just actually sort of bunking in with some businesses that are kind of in the planning stages here (none airport-related)," he said. "When we get our facilities built, we'll be at MidAmerica."
Information provided by the Belleville News-Democrat
Cheryl Eaton Article
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