Is there an Eastern European airport that could challenge the dominance of Frankfurt and Vienna in moving air cargo to and from the region? An ideal location and a €261 million modernisation plan may just be the ticket. Peter Conway looks at the potential.

With the exception of Leipzig in the former East Germany – due to become DHL’s main European hub this year – so far no obvious challenger has emerged. The problem has been a lack of modern cargo facilities at many of the region’s airports, and a lack of cargo focus on the part of the companies running them.

Budapest could be about to change all that. Ideally located in the heart of the new industrial regions of Hungary, the Czech Republic, and Slovakia, and offering lower costs than the established European hubs further west, the airport has already attracted the attention of Cargolux for Asia to Europe traffic.

But it has been held back by its series of small, outdated cargo terminals, which are generally considered inadequate for the needs of modern freighter operators.

All that is about to change as part of a €261 million modernisation plan for the airport, announced by its new German owners Hochtief, who acquired Budapest airport early in 2007 from BAA, the UK airports operator.

A cargo pedigree
Hochtief comes with a good track record in the cargo area, having sharehold-ings in airports such as Athens, Sydney and Dusseldorf, and involvement in Senai Airport in Malaysia and a proposed new cargo handling facility in Chengdu, China.

As well as upgrading Budapest’s passenger terminals and maintenance facilities, it will be starting construction in coming months on a new cargo village, the first phase of which could open sometime in 2009 with 160,000 tonnes of annual cargo capacity. A further two phases of the project could later bring capacity to 300,000 tonnes.

The new village will include facilities for all the current handlers at Budapest, including national carrier Malev, Celebi, TNT and DHL, as well as forwarding and logistics facilities – some 270,000 square metres of warehousing space in all, or nearly three times current capacity. “We want to make Budapest airport a real Central European cargo hub,” says Domokos Svollar, the airport’s spokesman. “If you look at the map we are better located than either Vienna or Prague, with all the main cities in the region within 3,000 kilometres. We are also only 1,600 metres from the main ring highway around Budapest.”

Cargolux an early convert
Already enthusiastic for Budapest is Cargolux, which has been operating B747-400 freighters to the airport since April 2002. The aircraft fly in directly from Asia using fifth freedom rights, and frequencies have steadily increased. On 26 February, the carrier added a fourth weekly frequency from Hong Kong, complementing two frequencies from Taipei via Bangkok.

The flights carry parts to Asian factories in Hungary and Slovakia. Export volumes are smaller, but growing rapidly, and include IT and telecommunications products, art work, pharmaceuticals and handicrafts.

“We prefer Budapest to Vienna be-cause it is closer to the main factories in Hungary,” says Robert van de Weg, Cargolux’s senior vice president sales and marketing. Cargolux also uses Budapest as a gateway to Vienna, Sofia, Bucharest, Ljubljana and Warsaw, operating overnight trucking services to these destinations.

Ever eastward?
The carrier certainly has no plans to move from the airport, but van de Weg admits that the eastward movement of manufacturing from Hungary to the lower cost economies of Romania could threaten Budapest in the medium term. “We are always looking at opportunities, and maybe we will have to move further east in the years to come,” he said.

Cargo traffic at Budapest was roughly static in 2007, according to Szollar, matching the 2006 total of 65,150 tonnes. The airport plans a major push to win more freighter operators in the coming year, and is offering 50 per cent off landing fees in the first year, 40 per cent in the second and 30 per cent in the third, to any operator starting a new route.

This also applies to passenger routes, where currently Budapest’s longhaul network is limited to five routes, all operated by 767s. The only Asian ones are a service to Bangkok, operated by Malev, and a flight from Beijing, operated by Hainan Airlines. The airport also has two services to New York and one to Toronto.