FedEx may not leave RP totally

Federal Express (FedEx) may not completely leave the Philippines.

According to government sources, FedEx is still studying the possibility of keeping its back office operations in the country.

President Arroyo and Trade and Industry Secretary Peter B. Favila are still reportedly negotiating with FedEx to keep some operations in the country.

FedEx had earlier announced plans to cease hub operations in Subic by December 2008 and move to China.

Because of its increasing volume and the need to use much bigger aircraft, FedEx has decided that Subic’s current runway capacity cannot accommodate much larger aircraft.

Thus, FedEx has decided to locate to China which is also a more lucrative market.

FedEx is expected to exceed its 20 MD-11 cargo plane capacity limit at the Subic Bay International Airport (SBIA) for its Asia-One operations.

There had been offers from the government that once FedEx exceeds its Subic capacity, Clark’s Diosdado Macapagal International Airport could handle the additional operations of FedEx.

The Clark DMIA can accommodate much larger aircraft such as the A-380 which requires a longer runway.

FedEx, however, decided not to extend its operations in Subic once its lease agreement expires in 2007.

FedEx is one of the biggest investor at the Subic Bay Freeport Zone.

Its Asia-Pacific hub enabled it to deliver overnight to the United States.

Angelito Alvarez, president and chief executive officer of Airfreight 2100 Inc., the local licensee of Fedex, had said its current hub in Subic could no longer accommodate the infrastructure needs of the company.