A New Era at RFD: Flying Forward as Chicago’s Third Airport

It’s no accident that RFD has become one of the world’s fastest-growing cargo airports and a major intersection of commerce in Illinois. Indeed, RFD’s rise on the national and global stage has been a long time in the making, as leaders double down on their strengths and position the airport for victories to come. This is the inside story of a growing juggernaut at Rockford’s airport.

UPS Airlines maintains its second-largest regional hub at Chicago Rockford International Airport. Since its arrival in 1994, UPS has consolidated more operations into the facility, and it now handles some 74 daily flights to and from Rockford. (Samantha Behling Photo)

Living in the shadow of one of America’s busiest airports has its advantages – if you’re willing to see it that way.

At Chicago Rockford International Airport (RFD), in Rockford, leaders certainly do. Capitalizing on the airport’s unique position – on a number of fronts – leaders there are making a name for Rockford’s air hub on the national and international stage.

The Federal Aviation Administration (FAA) considers Rockford the 17th-largest cargo airport in the nation. Industry groups called RFD the world’s fastest-growing cargo airport in 2018, besting locations in Kenya, Belgium and China.

Over the past five years, the airport has invested more than $100 million in its facilities and welcomed thousands of new jobs along with several key employers – and more are expected in the coming years.

It’s been a long time coming. Rising from challenges in the early 2000s, this regional airport has left little doubt about its future. The arrival of new cargo carriers, a massive maintenance hub and a growing platform for passenger service have solidified its role in the world stage and positioned it for major market shifts happening right now.

“We’ve always hoped we could convince companies they can land their aircraft here, unload it here and get it to their markets in the Midwest – not just Chicago but all over the Midwest – faster, more efficiently and more economically than they could out of O’Hare,” says Mike Dunn, RFD executive director. “That’s what we’re proving to them.”

A Growth Machine

Dunn takes special pleasure in showing off the airport to political and other leaders, including Sen. Dick Durbin, Rep. Cheri Bustos and Rep. Adam Kinzinger, who’ve become strong supporters to the airport. There’s a distinct look of surprise as they realize the juggernaut that’s been building over the years.

“Gov. Pritzker and Senator Duckworth have become very good friends to the Rockford airport and have been very supportive of us,” says Dunn. “When they both came here for the first time, I think they were shocked at what they saw, and how big the airport is and what our capabilities are.”

It’s an impressive and growing list of capabilities. With longer runways, RFD can now accommodate some of the world’s largest aircraft. With new ramps, RFD can accommodate increased traffic. And then there are additional improvements, like RFD’s rehabbed terminal, a growing Amazon cargo hub and the massive AAR hangar that specializes in maintenance, repair and overhaul of planes. Since 2014, federal, state and local governments have supported more than $100 million in infrastructure improvements, Dunn estimates. That doesn’t even include the recent expansion of Interstate 90 from Chicago to Wisconsin, a factor that Dunn calls a major advantage in attracting logistics firms.

Outside of the 900 acres it maintains within air operations, the Greater Rockford Airport Authority oversees an additional 2,100 acres of industrial park where manufacturers, freight movers and others piggyback on the airport operations. These growing tenants together supply nearly 8,000 jobs – a figure that’s quadrupled over the past five years, says Zach Oakley, deputy director of operations and planning for RFD.

Driving that growth in employment is a persistent rise in activity at RFD’s runways. Last year, the airport moved an estimated 2.7 billion pounds of cargo – nearly triple what it moved in 2016 and about 15.5% more than it moved in 2019.

“The last three years in a row, we’ve set our all-time highs for cargo,” says Oakley. “In 2018, we broke 2 billion pounds for the first time.”

The airport terminal at RFD recently received a $25 million facelift, in anticipation of additional passenger service over the coming years. In 2019, the airport moved about 116,000 people through its gates, making it the 230th-busiest passenger airport in the U.S.

The Rise of Cargo

It’s no accident that RFD moved nearly 3 billion pounds of goods last year. The momentum has been steadily growing for more than a decade.

RFD was little more than a modest regional airport when UPS set up shop in 1994, six years after the firm established its own airline. The package carrier’s arrival kicked a number of infrastructure improvements into high gear.

“We had runway improvements happen, UPS ramps being built, upgrades on the airfield in terms of landing systems and whatnot,” says Oakley. “If UPS had not shown up in 1994, we probably never would have gotten where we are now.”

Then, as now, UPS found several key advantages to the Rockford area: ease of movement, speed in arrival, and an ideal geography.

“It’s well located to serve UPS customers throughout the Midwest,” says Jim Mayer, public relations manager for UPS. “RFD is not at all congested. That’s critically important for UPS. Probably even more so than a passenger carrier, UPS has to operate on a precision schedule to be able to deliver packages overnight anywhere across the country.”

Today, Rockford is UPS’ second-largest regional hub, only slightly smaller than one in Philadelphia. Rockford’s 2,200-plus employees and estimated 1,100 seasonal workers sort overnight and two-day deliveries, handling up to 83,000 packages per hour. By comparison, UPS’ primary cargo stop, Worldport in Louisville, Ky., occupies 5.2 million square feet and can sort up to 416,000 packages in an hour.

At Rockford, aircraft fly in and get unloaded; packages are sorted, the planes are reloaded and they return to the air. An estimated 74 flights arrive and depart each day. They often taxi along UPS’ 50-acre ramp, which can accommodate about 31 aircraft at a time.

Larger, quieter jets have been taking to the runway over the past decade, in part as a move to accommodate more cargo per load. In 2017, UPS delivered more than 1,000 new jobs to Rockford, as it consolidated flights and relocated sorting operations from Des Moines (The nation’s 91st busiest cargo airport).

“While you are in bed, hundreds of your friends and neighbors are busy keeping the economy moving,” says Mayer. “That’s even more true during the pandemic. UPS has been deemed an essential business by governments in the U.S. and around the world, and UPSers in Rockford are on the front lines saving lives and livelihoods.”

The Amazon Effect

The economic collapse of 2008 hit Rockford and its airport hard, in one year causing freight loads to sink more than 20%. Like the national economy, recovery came slowly to RFD. When Dunn arrived in 2012 he put a new, more intensive focus on growing the airport’s cargo business. The numbers seesawed, but the hard work behind the scenes continued.

The payoff came in 2016.

“It’s not an accident that Amazon showed up,” says Oakley. “That was a lot of hard work getting the Rockford name out there and the market awareness of us as an alternate to Chicago. But when Amazon showed up in 2016, that really started ramping things up.”

The e-commerce giant first landed in a 75,000-square-foot building on the airport’s southwest side. The facility is now 228,000 square feet and serves nine inbound and outbound flights per day. It can handle some 80 trailers sending packages throughout the region and beyond. More than 1,000 associates work out of the facility.

Located so close to massive fulfillment centers in Beloit, Elgin, Huntley (as of next year) and the rest of the Chicago area, RFD’s centralized location and easy access to Interstate 90 enable Amazon to ship orders quickly to any part of the country – advantages that Oakley and Dunn believe will convince other freight carriers to consider our region.

“When you look at it from a cargo standpoint, an airline or freight forwarder can say, ‘Well, UPS is out there, but UPS is different. They do things differently. We may not be able to be successful,’” says Oakley. “But then Amazon shows up and you have Amazon and UPS on the same airport at the same time. Those companies don’t usually make mistakes, so that really helps to push us out there.”

Amazon’s arrival helped RFD shipments to grow 15% that first year. Then, freight grew an astounding 49.7% and 54.84%, respectively, the next two years. Cargo jumped an additional 15.5% in 2020, driven in part by the COVID-induced boost in online shopping. According to the U.S. Census Bureau, Americans spent $209 billion online during the third quarter – an increase of almost 40% from the year before.

“You’re talking about jolting the e-commerce market forward 3-5 years, which, on the cargo side, is massive,” says Oakley. “We were seeing growth already. We expected growth related to our general flight expansions with UPS and Amazon. But we’ve seen more than we’d expected, and from talking to both companies, the volume they were seeing last fall was exceptionally high for that time of year.”

While UPS and Amazon are power players at RFD, they’re only two parts of what Dunn calls a three-legged stool. It’s international carriers that will help RFD to make its next big leap, Dunn says, and deals are already taking shape.

Last October, RFD welcomed German air cargo firm Senator International, working through contract firm Emery Air. The company set up inside a 90,000-square-foot operation that opened this summer. Located on the airport’s south side, it’s built to accommodate more than 20 truck docks and future cargo operators.

“This will give us the ability to support the growing demands of air cargo within the U.S. Midwest, a market we have strongly focused on and have committed ourselves to develop over the years to come,” Ralf Schneider, chief operating officer of Senator International, said at the project’s October announcement.

Passengers on the Climb

For all the growth RFD has enjoyed in its cargo operations, such a future wasn’t always so certain. When Dunn served on the Board of Commissioners in the early 2000s, he and his colleagues faced a challenging question: Was it cargo or passenger service that would take Rockford to the next level?

Both were tantalizing.

“The question at the time was, being so close to O’Hare, what would benefit Rockford the most by that proximity?” says Dunn, who left the board in 2010. “And basically, the cargo guys are the ones who figured out Rockford first.”

But not without some serious wrangling over passenger service – a portion of RFD’s business model that’s remained fairly stable over the past decade, even in the pandemic.

“There was a big emphasis on passenger service in the early 2000s, but that had to do with the fact that the airport lost passenger service in 2002,” says Oakley. “That was low-hanging fruit. The airport’s Board of Commissioners pushed passenger service heavily, and they were successful. That’s what landed us Allegiant and changed our trajectory.”

Allegiant Airlines helped to deliver about 116,000 passengers through the gates in 2019 and 79,674 last year, making it the 202nd busiest for passengers. By comparison, O’Hare, the nation’s fourth-largest, saw about 40 million passengers in 2019 and 14.6 million last year.

Part of the challenge for Rockford’s passenger service lies in the industry’s dual markets: business travelers and leisure travelers. The former is hard for Rockford to compete with, because business travelers appreciate the sort of repetitive flights offered by larger airports.

“For leisurely travelers and the smaller air carriers that serve them, we use pretty much the same argument as we do with cargo,” says Dunn. “We’re an efficient place to operate, we’re a low-cost place to operate for low-cost carriers, and I think there’s plenty of room for growth in that area.”

Both Dunn and Oakley believe there’s even more room for growth as dynamics shift due to the pandemic.
Not only do they see leisure travel rebounding faster than business travel, but they see a new type of competition arising after Southwest Airlines announced it would fly out of O’Hare.

“That’s very interesting to us, going forward, because of the ability for Southwest to grab a foothold in O’Hare,” says Oakley. “Some of those carriers we’ve been talking to over the years rely on some of the same airspace that’s going to be used by Southwest. That’s an advantage for us going forward, because it opens up some ability for us in terms of selling the alternate access into Chicago for leisure, low-cost airlines.”

Diversifying RFD

Cargo and passenger service are perhaps the easiest aspects of RFD to understand, but they’re only part of the picture. Since the arrival of AAR, an international specialist in airplane maintenance, repair and overhaul (MRO), the airport has entered a new revenue stream.

“One of the things we felt very strongly about several years ago was finding something other than cargo and passenger service for the airport, because it would benefit the economic vitality of the region,” says Dunn. He was one of many partners who helped to recruit AAR to town in 2014.

Inside AAR’s impressive dual hangars, officially opened in late 2016, crews perform what’s essentially the aerospace equivalent of your car’s maintenance plan. At certain intervals, particular check-ups and fixes must be made. Rockford’s hangars stand 10 stories tall and measure about 300 feet square – large enough to hold some of the largest planes in the world.

Since AAR’s arrival, other high-profile maintenance firms, including Emery Air, Chronos and Code 1 Aviation, have been investing in RFD. This April, AAR announced it would handle all of United Airlines’ narrow-body fleet in Rockford. The firm expects the move could add up to 250 local jobs over the next few years.

The key to landing an airplane MRO didn’t lie in Rockford’s aerospace strengths or its economic incentives so much as its supply of labor. That’s because just across the street, Rock Valley College is training the next generation of airplane mechanics – in a state-of-the-art building designed with AAR in mind.

Each year, nearly 150 students work to become an airframe technician, a powerplant technician or an aviation maintenance technician, and they have the option to earn an associate degree. Classes focus on the ins and outs of airplanes, from the engine to the structure and everything in between.

When they’ve graduated, these students, most of whom are working adults entering a new career, have a clear path to job openings at AAR. Whether or not they end up across the street, it’s still a win for the Rockford area. These well-paid, high-demand workers can fit in at manufacturers including the likes of Ingersoll, Woodward and Collins Aerospace.

“If any one company or industry has a bit of a slowdown, of course COVID notwithstanding, another place can pick up the slack,” says Gina Caronna, vice president of STEM for Rock Valley College. “So, that’s another unique feature out of this program because we are unique to Rockford, and because we are an aerospace industry hub, it gives our graduates a wider range of places they can go for employment.”

Not surprisingly, Caronna says Rock Valley’s aviation maintenance technology program has been among the school’s fastest growers in the past five years.

“We’ve increased the number of full-time faculty we employ. We’ve doubled,” she says. “We also have some of the most solid community partnerships in that program.”

The payoff for her students is immense, she says, because AAR presents a daily reminder that their work matters in the real world.

“I watch students struggle all the time with this,” she says. “It’s like, ‘Why do I need to learn this? How is this ever going to mean anything to me?’ This is an opportunity to see that crystal clear, because you’re seeing it in the classroom, in the shop, and every single time you go to class.”

While COVID has taken its toll on the aerospace industry and challenged RVC’s approach to education, Caronna says she’s still exploring new ways to strengthen the bonds between AAR and the school. She envisions in-depth job shadowing for RVC students and explored ways that AAR can prepare team members for a new project – a process called general familiarity classes – in a way that benefits both organizations.

She’s worked with Rockford Public Schools on dual credit classes and is in talks about a four-year degree like the arrangement between RVC and Northern Illinois University’s engineering school.

“I think this program is a lot like our engineering program, because both had their genesis in a community ask,” she says. “When we were making the decision to expand this program, it was directly because AAR was working with the city, the county, the airport authority, and they were saying, ‘If we come here, how will we be able to hire people?’ Those are the types of programs that can take the best hold in the community, because they’re born out of the community looking for a solution to growth potential.”

Partnering for the Future

Word of RFD’s growth is catching on. Late last winter, Dunn and his team were preparing to announce the arrival of a second passenger carrier – until the pandemic shut everything down.

“It will come back,” says Oakley. “It’s just a matter of when.”

For now, though, the team at RFD continues to set its sights on a prosperous future for Rockford’s airport.

“If UPS and Amazon make a shift, we have to accommodate them,” says Oakley. “We’re already trying to plan for some additional airfield infrastructure in the next 3-5 years that will allow growth to continue seamlessly. It’s always about positioning ourselves to be ready before things happen.”

Collaboration is sure to play a role in RFD’s next major moves, and Dunn says it’s sure to involve key figures in Washington and Springfield.

“Our job has always been to make Rockford the best possible alternative in the world to O’Hare, and to make Rockford the state’s third major airport,” says Dunn. “I think we’ve been very successful in doing that.”

FTZ #176: Another Tool for Growth

While Chicago Rockford International Airport is a port of entry for billions of pounds of goods every year, it’s also helping to move goods that may never pass through the gates. That’s because RFD is the grantee of Foreign Trade Zone #176. This special designation, which impacts businesses in 11 counties across northern Illinois, enables approved companies to bypass U.S. Customs and defer their import process. Rather than pay tariffs upon import, designated firms pay only when they sell to the U.S. market.

“In some cases, it can be a reduction of the tariff or even an elimination of the tariff, if that product never touches the U.S. market,” says Carrie Zethmayr, zone administrator. “There are efficiencies in not having that product held up in the port of entry. You can take control over your supply chain.”

Products don’t have to go exclusively through RFD. Rather, they can process through any of nine currently designated sites: three in Rockford, three in McHenry County, one in Dixon, one in Hampshire and one in Sycamore.

Over the past five years, exports from the greater Rockford area have increased 15%, she says, and they now represent about 18% of Rockford’s gross regional product.

“Our area has become a more important export market to the state of Illinois’ economy, at a faster rate than other areas,” says Zethmayr.

Learn more at FTZRockford.com.