Home » Southern Air moving headquarters to N.Ky. airport to be nearer to DHL

Southern Air moving headquarters to N.Ky. airport to be nearer to DHL

By Mark Green
The Lane Report editor

HEBRON, Ky. (Jan. 22, 2013) — Air freight operator Southern Air is moving its headquarters from New Haven, Conn., where the company is reported to be laying off 120 employees in preparation for the relocation, to the Cincinnati-Northern Kentucky International Airport (CVG). Southern Air’s largest customer, DHL, also has it major operations at CVG.

The Cincinnati-Northern Kentucky International Airport (CVG)
The Cincinnati-Northern Kentucky International Airport (CVG)

Southern’s CEO has indicated CVG is the most logical base for the company, which flies Boeing 777F aircraft for DHL Express, the German global air freight company that operates one its three main world hubs at CVG.

Northern Kentucky already represents Southern’s largest hub of activity.

The move has been in the works since mid-2012 when news reports indicated that Kenton County Airport Board had OK’d a lease agreement for just more than 33,000 s.f. of space for five years with options to extend that to 15 years.

The Kentucky Economic Development Finance Authority approved tax incentives for Southern Air in May 2012 to encourage the cargo carrier to shift its main operations to Northern Kentucky.

Southern Air was reported last year to also be considering Dallas, Fort Lauderdale, Fla., and Norwalk, Conn., as relocation sites.

According to Cincinnati.com, its parent company Southern Air Holdings filed for Chapter 11 bankruptcy last year after losing U.S. Defense Department work and reduced its $285 million in debt by two thirds as well as cutting its workforce from a previous level of 611.

News of a final decision to move to Kentucky was reported Monday and today by the New Haven (Conn.) Register and Cincinnati.com.

“It has become apparent that a relocation of our headquarters is warranted for both strategic and financial reasons,” stated Dan McHugh, CEO of Southern Air Inc., in an email sent to employees and obtained by the New Haven Register.

“Over the last 18 months, our management team and advisors have conducted in-depth research and analysis to evaluate key U.S. markets for factors critical to Southern Air, including reduced costs, access to aviation talent and proximity to key customers,” the email states. “Our board of directors, key financial stakeholders and management team have made the decision to relocate Southern Air’s operations and headquarters to Northern Kentucky (the Cincinnati Airport).”

The email notified employees in Connecticut that they will be laid off in March and some will be offered the opportunity to relocate with the company.

KEDFA incentives approved last year offered up to $270,000 a year in tax breaks for 10 years to Southern if it met investment and hiring commitments. It then was looking at an $8.5 million investment that would produce 120 new jobs at CVG the first year and 150 within three years, according to state records.

Southern Air Transport was founded in 1947 in Miami, Fla. according to the company’s website. In 2007, Oak Hill Capital, a private equity firm that has offices in Stamford, acquired a majority ownership stake in the company. Southern Air has contracts with cargo carriers in Ethiopia, Korea and Thailand.