Last year was mostly a down year for cargo activity at airports around the world, according to Airports Council International. Most of the airports on its list of the 50 busiest cargo destinations in 2011 had experienced year-over-year cargo declines ranging from fractions of a percentage point (JFK, New Delhi) to more than 10 percent, in the case of Tokyo Narita. In the top 10, only Louisville saw year-over-year tonnage growth — even that was only 1 percentage point.
With all the declines and small increases experienced by the majority of the airports on the list, a few stood out. Of course, officials at Hong Kong International Airport deserve recognition for once again obtaining the top spot on the list, despite a 4.5-percent, year-over-year, drop in activity; HKIA overtook the perennial winner, Memphis International Airport, on 2011’s list. Airports in Africa, Latin America and the Middle East saw the largest increases in activity.
HKIA squeaked by Memphis this year, finishing at 3.97 million tonnes, compared to the U.S. airport’s 3.91 million tonnes. According to an airport spokesman, HKIA officials amassed this amount of cargo with the help of their three biggest cargo markets — Europe, the U.S. and Southeast Asia. To corner a large market share on those routes, those at HKIA entered into partnerships between the carriers, the airport authority and the government, and made good use of HKIA’s access to multimodal transport.
In the first half of this year, cargo activity at the airport stayed mostly flat, which was a relatively good sign in this difficult economy. Although officials saw a 1.6-percent, year-over-year, decline in July, HKIA has seen a bit of a resurgence recently. Freight volumes rose 3 percent, year-over-year, to 328,000 tonnes in August. “We’ve started to see some positive growth in cargo throughput recently,” the spokesman says. “Although the cargo performance will still be affected by the eurozone crisis and the U.S. economy in the short term, we are confident in HKIA’s long-term air traffic demand.”
Moving forward, the spokesman sees a few key challenges for HKIA. The general sluggishness of the economy and the price of fuel is a perennial concern, but one issue specific to the airport is capacity. The spokesman cited estimates that by 2030, cargo volume at HKIA will reach 8.9 million tonnes. Currently, there’s not enough room for that type of expansion, he says. “To truly handle unconstrained demand up to 2030 and possibly beyond,” the spokesman says, “HKIA needs to build a third runway.”
The Chinese government has given its in-principle approval of adding a third runway to the airport, so the quest for more capacity is slowly moving forward. Next up, officials will conduct environmental impact studies, obtain necessary governmental approvals, and then actually build the runway. The spokesman estimates that project implementation is three years away. Tonnage should start to skyrocket early next year, with the opening of the HK$5.5 million Cathay Pacific Cargo Terminal. According to the spokesman, the terminal will increase the airport’s capacity by 2.5 million tonnes. Other notable developments include Shenzen Donghai Airlines’ recent freighter service; Silk Way Airlines and SF Airlines will also both start freighter service this year.
South Korea’s Incheon Airport ranks fifth on the list of top cargo airports, and its tonnage numbers were good enough for third on the list of Asian airports. But it also experienced a drop in activity, year-over-year, in 2011.
An airport spokesman says Incheon retained its high ranking despite the decline because of strong international business. Incheon has remained the second-busiest international cargo destination for the past six years, the spokesman says, while seeing the international volume at competing airports steadily decline. Transshipment activity this year has helped recent tonnage figures.
“Transshipment cargo moderated the poor showing of export and import cargo by decreasing only 1.5 percent, compared to 2011,” the spokesman says. “Incheon Airport has strong points in its transshipment environment — such as a geographical benefit of connecting Asia and the Americas — as well as a fast and easy transshipment process.”
Last year’s decline, however, was due mostly to the general malaise in the global economy. That has carried over a bit to this year, with Incheon turning in a first-half decline in tonnage of 5.3 percent, year-over-year. More specifically, these numbers reflect a delay in the European and U.S. economic recoveries, the spokesman says. Carriers are still adding flights to Incheon, however. Turkish Airlines, Qatar Airways and Evergreen International Airlines all introduced new freighter services to the airport in the first half of 2012. More recently, Emirates restarted its freighter routing into the airport.
“This year’s decrease of cargo in Asian airports and carriers was caused by high oil prices, the high unemployment rate, and the shrinking of consumer confidence in the European and American market,” the spokesman says. “Those factors are not expected to be resolved within a short time period.“
While a majority of the Middle Eastern and African airports in the rankings achieved solid growth when compared to 2010’s tonnage numbers, African airports all showed impressive jumps, year-over-year. Jomo Kinyatta International Airport in Nairobi experienced the single biggest increase out of all the airports on ACI’s list, with a 25.4-percent increase when compared to last year. Though at 288, 291 tonnes in 2011, the airport still process a far cry from that of the regional leader, Dubai, which saw more than 2.2 million tonnes pass through last year.
According to William Simbah, commercial manager, cargo, at the Kenya Airports Authority, last year exceeded the airport’s average annual volume growth rate. He attributes this increase to improved infrastructure, both at the airport and in the surrounding country; expanded cold room facilities in new, modern sheds; and a larger cargo apron. Carriers including Turkish Airlines, Singapore Airlines and Air Arabia also increased their flight schedules to Nairobi recently.
Air Cargo Germany upped its charters to the city, and British Airways recently came back to the airport after a long absence. Transshipment is also important at the airport. “Nairobi has developed as a major transit hub linking most of the African states,” he says. This enhanced cargo importance has been spreading throughout the region. So far this year, Simbah has also seen increased joint ventures among airports and foreign investors.
“Dar-es-Salaam is just about to open a new cargo terminal; Addis Ababa has built a new expanded airport, and so has Kigali. Entebbe has improved its existing facilities and is now feeding South Sudan and the Eastern Congo,” he says. “Kenya is developing new cargo facilities at the new Kisumu International Airport to capture the cargo potential in the Great Lakes Region and Central Africa.”
But these expansions can’t achieve their full potential in Africa without first fixing a few challenges common to the country’s air system. Simbah points to poor infrastructure as a hindrance to moving cargo inside the country. This is a barrier to trade that the government needs to address, he says.
The government could also help out with the introduction of regional trade agreements; currently those in the African cargo supply chain have had to deal with “unharmonized Customs tariffs,” Simbah says. More specifically to Nairobi’s airport, an imbalance exists between imports and exports, which has muddied airfreight rates. The list of potential difficulties goes on and on, he explains. “Upcoming regional airport developments and improvements in existing airport facilities are likely to bring regional competition, which is healthy, but will bring new challenges,” Simbah says. “Risks associated with security and terrorism are a major factor impinging on cargo growth due to costs related to mitigation measures.”
Leipzig/Halle Airport ranked 27th among the top 50 carriers, but saw the largest rise, year-over-year, among European airports. According to Markus Kopp, CEO of Mitteldeutsche Airport Holding, the parent company of Leipzig/Halle Airport, this is the seventh time airport officials have seen record year-over-year rises. Leipzig/Halle achieves its success, he says, by focusing on niche markets like the cargo charter business and live-animal exports (the airport opened its Animal Export Center in 2010). The airport’s proximity to Eastern European growth markets, direct access to the trans-European motorway, and 24-7 operations have also helped keep the airport in the running as a major cargo facility. Due to all these factors, 2011 was an exceptionally good year, but Kopp says that this year is shaping up nicely as well. Officials saw a 15-percent, year-over-year, rise in tonnage from January to August, and he expects to see the airport pass the 800,000 tonnes mark this year. “Contrary to the general German and European trend, cargo volume at Leipzig/Halle is rising steadily,” he says. “However, we do not live on a paradisiacal ‘logistics island,’ but are … dependent on global economic forces. Unfortunately, we cannot look into a crystal ball and see the future.”
Exciting developments are also coming to Leipzig/Halle. By 2014, officials will unveil a €40 million cargo center, complete with direct apron access. By the end of this year, Kopp expects to see the finishing touches on a new apron, which can accommodate up to five wide-body freighters, and a new maintenance facility. As far as expansions in services, Kopp notes that airport officials are currently in touch with several Chinese carriers. And these developments, it seems, could be just the beginning.
“Leipzig/Halle Airport is a relatively young player, and it is our goal to firmly position the airport in the international markets in the long run,” Kopp says. “We will keep working hard to ensure further growth and to become ‘best in class.’ In the past few years, we had been able to demonstrate that our strategy of focusing on logistics offers huge potential for success. This is our benchmark for the future.”
Memphis International Airport isn’t used to being second on ACI’s list, but for the second year in a row, the airport ranks just behind HKIA. Year-over-year, Memphis’ activity remained flat, which is an accomplishment in the current market, and according to Larry Cox, head of the Memphis-Shelby County Airport Authority, tonnage for 2012 is up 2.75 percent. But with this boost comes a bit of disappointing passenger news — passenger activity is down 19 percent because of Delta Air Lines cutbacks.
These cutbacks, in addition to the European economy, were the biggest impacts to cargo activity. “It seems to me that cargo activity is reducing due to global economic conditions for most American airports, with little relief at hand,” he says.
A big challenge to American cargo growth includes a predilection to divert airfreight to ground transport because of ballooning air transport costs. This leads Cox to believe that the best bet moving forward is international cargo business in the perishable and critical parts spheres.
Of course, the slow economy can’t last forever. For those airport officials waiting for the global recovery, Cox has some advice: Be ready. At Memphis, he says, infrastructure improvements and the expansions are always ongoing. FedEx, one of the airport’s major drivers of activity, is working on new facilities as well. “Airport operators need to continue to plan for airport facility improvements to be ready for the inevitable turnaround in the global economy,” he says, “and operate their airports in a cost-effective way to compete with other modes of transportation.”