Disembarking to the world: international cargo shippers and corporate executives see Miami-Dade as a nexus of travel

South Florida CEO, Jan-Feb, 2005 by Doreen Hemlock

The commute from New York just did not make sense anymore for Kraft Foods executives who specialized in Latin America and the Caribbean. Much of the time, they ended up flying through South Florida, because Miami International Airport (MIA) offered more international flights to the region than any other airport in the world.

[ILLUSTRATION OMITTED]

So in the summer of 2004, the food giant moved its Latin American headquarters from Rye, N.Y. to the Miami area, setting up shop on two floors of a new Coral Gables tower. It now employs more than 130 people in the headquarters, many in senior posts.

[GRAPHIC OMITTED]

Software company Computer Associates International Inc. reached a similar conclusion from Brazil. In late 2004, it split off a Caribbean and Central American headquarters from its regional office in Brazil and moved it to an office park near Doral, in western Miami-Dade, to access a wider range of daily flights available from MIA.

Today, more than 300 international companies host regional headquarters for the Latin American and Caribbean area in Miami-Dade County because of MIA. And prospects look good to lure more regional offices and expanding companies during 2005, as Latin American economies stand poised for solid growth after a banner 2004.

Avaya Inc., the Lucent Technologies spin-off that makes office telephone equipment, illustrates the trend. It expects double-digit revenue growth from its Caribbean and Latin American units this year, after gains of about 20 percent in 2004, says Avaya's president for the region, Elizabeth Garcia.

Avaya set up its regional headquarters in Doral in 2002 to be close to MIA, and now employs about 100 people at that office. Garcia herself enjoys the proximity to the airport, since she travels about 70 percent of her time to visit clients overseas.

Her main focus now: selling systems for Voice over Internet phone service (VoIP), which has helped many large companies in Latin America slash their telephony costs.

Garcia marvels at how much Miami has matured as a business hub for Latin America in the decade she has been working with the neighboring region. "There's so much talent here with international experience," she says. "More and more people are moving from Latin America to Miami. It's astonishing."

[GRAPHIC OMITTED]

Still, not all has been rosy for Miami's prime asset. Passenger traffic at MIA plunged after the Sept. 11 terrorist attacks in New York and Washington, and despite recent increases, still lags behind the nearly 34 million-passenger mark set during 2000. Airport officials expect it will take at least until 2006 to regain former levels. New security measures after Sept. 11 have taken an especially high toll: MIA, more than any other US airport, depends heavily on international business travelers, many of whom face security hurdles to obtain US visas even for travel to trade shows.

To adapt to the downturn, MIA has trimmed its proposed $6 billion expansion plan to $4.8 billion, still the largest undertaken by any operating airport in the world. But work remains over budget and overdue, with a new terminal for American Airlines alone likely to cost more than $1.5 billion and take until 2008 to finish.

Nor has political wrangling subsided. Highly regarded MIA Aviation Director Angela Gittens resigned in November amid conflicts over the expansion, and a new full-time director is not expected before March, after a national search, according to interim aviation director Carlos Bonzon, who may also vie for the post.

Even so, new security requirements have created opportunities for some companies, as cash-strapped airlines contract out services to cut costs. American Sales and Management Organization Corp., for example, has seen its revenues and staff soar since 1994, as it takes on such tasks as baggage handling and cabin cleaning in Miami and at airports nationwide.

The Miami-based service company expects revenues in airports across the US to rise by $9 million to $58 million and its staff to grow by 1,200 to 3,400 employees this year, with about half the gains in Miami, says president Joseph Lorenzo Jr. He expects the pace of growth to accelerate in Miami too, once the airport's multi-billion-dollar expansion is complete.

Cargo business at MIA also is rebounding, up roughly 10 percent in 2004 and nearing the nearly 1.9 million ton levels set in the late 1990s. Some of the growth comes from a $50 million Latin American and Caribbean hub that FedEx Corp. opened at the airport in 2004, employing about 300 people and capable of handling about 40,000 packages a day. The new unit has cemented Miami's role as the cargo hub for the Americas and the No. 1 airport in the US for international freight.

[GRAPHIC OMITTED]

Of course, not all cargo shipments at MIA are international. Miami-based Alienware Corp., a maker of high-performance personal computers, is increasing its shipments through FedEx and other delivery companies mainly to reach domestic buyers. Business is booming for the eight-year-old manufacturer, with sales expected to jump from $112 million last fiscal year to $180 million for the year ending Sept. 30, says chief executive officer Nelson Gonzalez. Employment was projected to reach 350 in Miami-Dade and 700 worldwide by October, Gonzalez says.