FedEx is expanding at Chattanooga Metropolitan Airport by flying larger aircraft and leasing hangar space for the first time.
"It will double the capacity we have for freight in and out of Chattanooga," FedEx spokeswoman Sally Davenport said.
Starting Oct. 3, Memphis-based FedEx Corp. will fly a Boeing 727 into Chattanooga every day, replacing two smaller aircraft, she said.
The freight giant is leasing 12,000 square feet of hangar space at Lovell Field, officials said. FedEx also is investing in machinery to help it with the increased number of parcels, but Davenport said no staff is being added.
"Certainly as the market grows, there will be [hiring] down the road," the company spokeswoman said.
Mike Landguth, the airport's president, said the FedEx expansion is an example of the city's economic growth, making Lovell Field an attractive option.
"We will continue to focus on the three major areas of aviation -- commercial, corporate and general aviation and cargo -- to ensure that we are positioned to capitalize on every opportunity for growth," he said.
FedEx flies in parcels and sends them to a central facility in Chattanooga where they're sorted and delivered, Davenport said. She declined to break out the volume of parcels it handles in Chattanooga or disclose investment figures.
Davenport said Volkswagen's new $1 billion auto assembly plant and the broadening auto sector is one reason for the expansion.
"Certainly, there's the opportunity to better serve Volkswagen and other companies," she said.
FedEx officials also hope to service Amazon's two new distribution centers under construction in Hamilton and Bradley counties, Davenport said.
Landguth said the 727 will be the largest cargo flight into Chattanooga. The hangar, owned by the airport, is undergoing about $25,000 in improvements, he said. He said the FedEx deal will result in about $75,000 in annual rental fees for the airport.