Kelly Air Force Base was located at the southwestern edge of San Antonio and at its closing was the oldest continuously-operating flying base in the United States Air Force and the largest single employer in San Antonio. Capt. Benjamin Foulois, the "father of military aviation," selected the site in November 1916 to expand the activities of the fledgling Aviation Section of the United States Army Signal Corps from Fort Sam Houston. The new airfield was named for Lt. George E. Kelly, who was killed in a crash at Fort Sam Houston on May 10, 1911. He was the first American military aviator to lose his life while piloting a military aircraft. The base was initially called Aviation Camp, then Kelly Field. When the air force achieved autonomy in 1947, the name was changed to Kelly Air Force Base.
Flying activities began on April 5, 1917, and with America's entry into World War I grew rapidly. The facilities were divided into Kelly Number One, later to become Duncan Field, for maintenance and supply functions, and Kelly Number Two, devoted to flight training. The base served as a reception and testing center for recruits as well as a training center for almost all the skills required to operate an air force. More aviators of World War I earned their wings at Kelly Field than any other field in the United States. At some point of their training most of the future leaders of the air force passed through Kelly Field. They included the later air force chiefs of staff Carl "Tooey" Spaatz, Hoyt Vandenberg, and Curtis LeMay; Charles Lindbergh earned his wings at Kelly Field, as did the famous "Flying Tiger" Claire Lee Chennault. In 1927 the Academy Award-winning movie Wings was filmed at the base.
World War II brought major changes, including the consolidation of Kelly and Duncan Fields. A part of Kelly became the Aviation Cadet Reception Center, later to become Lackland Air Force Base. All pilot training was transferred to other installations, and Kelly became the base for the San Antonio Air Materiel Area, which stored and distributed materiel and modified or repaired aircraft, engines, and related equipment. During the war, women, who had already comprised almost 7 percent of the Kelly workforce in clerical positions, held more than a quarter of the jobs due to the high number of draft-eligible men who had joined the military. These women, whose jobs included sheet metal work and electrical instrument repair, came to be known as the “Kelly Katies.”
After the war Kelly continued to expand and had worldwide logistic responsibilities for such aircraft as the B-29, B-50, B-36, B-47, and B-58 bombers; F-102 and F-106 fighters; and various cargo aircraft, including the huge C-5 transport. To provide the facilities necessary to meet those responsibilities, all of the remaining World War I hangers were removed, and a million-square-foot hanger was constructed. It was the largest structure in the world without center columns. In keeping with developing technology, mechanized central receiving operations, underground fuel and defuel systems, modern data-processing systems, and an automated air freight terminal were installed at Kelly. In addition to the logistical mission, Kelly AFB was host to the Electronics Security Command, the Air Force News Service, and National Guard and reserve units.
In 1989 the base had more than 25,000 military and civilian employees, and its payroll exceeded $721 million. Kelly Air Force Base played a key role as a transit point for troops and materials during the military operations in Panama and the Persian Gulf. The end of the Cold War brought about many changes, however, with shrinking military budgets and the consolidation of operations. In 1993 the Base Realignment and Closure (BRAC) Commission placed Kelly on its closure list, but an outpouring of local support for the base saved it from closing. Efforts to save Kelly failed when BRAC once again recommended closure in 1995. According to A History of Military Aviation in San Antonio, “By a vote of six to two, the commission decided to recommend the San Antonio Air Logistics Center for closure and realign Kelly with adjoining Lackland Air Force Base.”
Throughout its long history, Kelly Air Force Base had employed generations of families in San Antonio, and the loss of such an established institution was seen as a hit to the local economy. In the years from 1995 to 2001 leading up to base closure, the Department of Defense advocated a new initiative of privatization and worked to transfer depot maintenance to private contractors who would hire former Kelly employees to work at the base’s former facilities. The majority of the workforce was accounted for through retirement, transfer, priority placement, or other new employment in the region; actual layoffs accounted for approximately 8 percent of the Kelly workforce. As privatization continued, the Greater Kelly Development Authority signed leases with commercial firms such as Boeing and Lockheed Martin. Lackland Air Force Base took over base support of Kelly Field Annex, the runway complex, and the Air Intelligence Agency, 433rd Airlift Wing, and 149th Fighter Wing on April 1, 2001.
The San Antonio Air Logistics Center was officially inactivated on July 13, 2001. Kelly Air Force Base closed and became KellyUSA. In the 2000s, with a concerted focus on the development of the base as an inland port, KellyUSA became Port San Antonio in 2007. The San Antonio Port Authority opened the East Kelly rail port in April 2007, and a new 89,600-square-foot air cargo terminal (with a 50,000-square-foot cargo staging area and fourteen acres of ramp space) opened in early 2008. That year the United States Air Force transferred more than 1,000 acres that held the Base Exchange, military housing, and other facilities to Port San Antonio. Lackland Air Force Base took back three buildings on base for renovations and the housing of new tenants, including the Air Force Medical Operations Agency. As of the 2010s the U. S. Air Force held responsibility for several buildings on the old Kelly grounds, and a large upgraded office complex on the east side housed the national headquarters for several important Air Force agencies, including the Medical Operations Agency, Air Force Civil Engineer Center, and the 24th Air Force (also known as Cyber Command). In 2017, the centennial of flight operations at Kelly, Port San Antonio had more than 80 public and private-sector tenants and employed more than 12,000 workers; it contributed more than $5 billion to the San Antonio economy.