One was the emergence of Azerbaijan as a hub for air traffic between east and west. The second one was that the industry can look forward to better times ahead – despite ongoing economic and geopolitical problems.
“Cautious optimism” was the outlook that Tom Crabtree, the managing director of the Trade and Transport Group, a boutique consultancy, offered his audience in Baku (Azerbaijan) late last year.
He balanced the e-commerce boom – which he and many others see as “having a lot more potential for development” – against ongoing economic problems. These include inflation, above all, which has seen fuel costs rise by a quarter, and has restricted budgets in emerging markets. Simultaneously, Crabtree told the summit that he’s worried about our tense, armed world – same as nearly everyone else is.
Part of the reason for his – and his audience’s – overall feeling of cautious optimism are recently-published statistics which show that major markets are all trending upwards, with either less negative trends or even with positive developments. The routes that stand out include links between Europe and East Asia, with 8% more goods moved monthly since August, compared to the previous year.
The strong US economy also helps, as Glyn Hughes, of The International Air Cargo Association (Tiaca), elaborated, together with continued strong interest in freighters both old and new, as new players join the e-commerce bonanza.
The shuttering of Russian and Ukrainian airspace helped, as did restrictions on Chinese flights to the USA, as they meant capacities could be absorbed and yields kept “elevated”, as Crabtree’s put it.
“We’ve turned the corner” – Kwong
There’s some industry support for this. After describing the past year as “challenging” Wilson Kwong, the CEO of Hong Kong Air Cargo Terminal Limited (Hactl), told the ITJ that “our recent experience has been much more positive. I believe we’ve now turned the corner and that 2024 will see a return to consistent – though muted – growth – though current events in the Middle East naturally remain a concern.”
One particularly busy region is Central Asia, which is becoming an indirect gateway for goods destined for Russia. Marco Bloeman, a managing director as well as the cargo advisory lead at Accenture, pointed out that Kazakhstan and Uzbekistan now also import more cargo.
Silk Way West Airlines is a part of this emergence in Central Asia. It has ambitious plans for a cargo village, with an airport, in the Alat Free Economic Zone in Azerbaijan. The facility, located 65 km south of the capital Baku and set to be operated by the Silk Way Group, illustrates how the world is changing – and air cargo with it.
The Silk Way Group has proposed stands for 18 widebody aircraft, a 4 km runway, as well as full airport services, according to group CEO Jawad Dbila. The target is to move 500,000 t of cargo annually.
The first phase will be launched this year and will include a 20,000 m2 cargo terminal with a bonded warehouse, a light industrial unit as well as perishable and processing facilities, as Dbila told the summit.
Ambitions in Azerbaijan
The cargo village will be its own free port, and is near a seaport as well as international road and rail links. More importantly it will be a smart city too, with a single regulator, a business centre as well as customs authorities handling trade facilitation.
The centre will be of great use to Silk Way West Airlines, as president and chief executive officer Wolfgang Meier acknowledged. The Baku-based cargo carrier is set for growth by substantially expanding its fleet of brand-new aircraft. The move will see it add three Boeing B777s by 2025, two Airbus A350Fs by 2027, and two B777-8Fs by 2029. The carrier will continues to leverage to the full its base located midway between Europe and Asia.
And that’s not all. Silk Way West Airlines has now also started operating a regular weekly service to Brazil, which returns via Quito, as Meier told the summit.