FedEx closes hub in Subic
HONG KONG: FedEx said Wednesday it will close its Asian hub in Subic Bay, Philippines, replacing it with a new $150-million hub in Guangzhou, southern China.
The Subic Bay facility will close by the end of 2008, by which time the Guangzhou operation will be in service, according to FedEx Corp., the world’s largest cargo airline.
The new hub at Guangzhou’s Baiyun International Airport will better serve clients doing business in China’s fast-growing market, FedEx said in a statement.
FedEx Chief Executive Frederick Smith said the runway at Subic Bay, a former US naval base, cannot be expanded and cannot accommodate new cargo jets. Last year FedEx had extended its Subic Bay lease to 2010.
Meanwhile, insufficient capacity to support its intra-Asia market development in the next 30 years prompted FedEx to transfer its main hub from the Philippines to China.
FedEx Philippines gave assurances that it will give generous severance packages to employees who will be disenfranchised by the hub transfer. The company also denied unverified reports that incompetence and political noise prompted the company to leave the Philippines.--AP with Niel V. Mugas