Certainly the situation for the, ‘almost’ all-freighter cargo airport, has possibly never looked better. The ‘almost’ is the result of a curious event that occurred earlier this year, putting a new, albeit minor, spin on Liège Airport’s business – the formerly all-freighter cargo airport took on a belly dimension.
“We’ve always been 100 per cent freighter and zero per cent belly and now it’s going to move to 99 per cent freighter and 1 per cent belly,” Steven Verhasselt, business development manager of Liège Airport (LGG) says with his characteristic laugh.
This happened when LGG began getting passenger flights from China – although it’s not the first time as the airport has been getting passenger services from leisure carriers for a number of years, but they carried no belly cargo. Verhasselt explains that a Russian carrier is operating flights on behalf of a Chinese tourism company three times a week.
“We’re getting 1,000 Chinese passengers and 60 tonnes of cargo a week between Liège and Xi’an, Shenyang and Tianjin,” he says. The flights started with A340s but now have upscaled to B777s which bumps up the weekly belly cargo capacity from 30 to 60 tonnes per week.
Certainly not an event that will make or break the airport, which in 2014 handled 590,000 tonnes of cargo and this year will surely exceed that figure considerably – firmly cementing its position as Belgium’s leading cargo airport and the fastest growing large cargo airport in Europe. But it does speak to the many sources of LGG’s growth.
Growth all round
The airport’s story – growth in all forms – is well and truly a rare thing in an industry that continues to see flatlined global cargo growth with only a few exceptions sprinkled here and there in the world – Liège being one of those.
“What we see is that the growth we have today is because of the new customers which is nice, but also because our existing customers are growing and that is truly important to us,” Verhasselt says.
“It’s a healthy mix of new and existing; it’s a healthy mix of scheduled and chartered and our main job is to make sure we bring in the freighters that’s one part of our job, but we also try to help the airlines to fill those freighters and that’s how the commercial team of Liege Airport works. In short, one person to bring in the freighters (Verhasselt), another to keep them there and a third to make sure they’re getting filled. The biggest volume player is still TNT at around 35 per cent of LGG’s volumes, but the biggest part of the airport’s growth comes from Network Airline Services (NAS) which is the previous ANA-branded entity in Europe, but took on the unified NAS brand which it used in the US market.
This also included moving from Austin, Texas to Liege with feedering out of the US and substantial flights down to Africa. Today NAS operates 12 scheduled flights out of Liege – all wide-body MD- 11s from Nordic and B747s from Atlas. “We are now in discussions with them to accommodate further growth – a strategic development between airline and airport,” Verhasselt said without elaborating.
Ethiopian Airlines is also a very big customer for Liege being number two in volume terms after TNT and before NAS. Qatar Airways comes in at number four and has been adding volumes – “they started with Africa flights and while some of the Africa flights left, they are connecting us to Mexico, Los Angeles and Atlanta as well.
“The A330s went away and the B777s came so the number of flights is the same but the volumes are bigger,” Verhasselt added. Then of course there is Liège’s “longstanding, loyal customers” like CAL, that upgraded from a B747-200 to a -400 and also EL Al and Icelandair which is now doing direct postal flights to the US.
And while the scheduled sector is doing well, so too are the charters out of Liege. Last year LGG had a very big programme on the relief flights for the Ebola crisis in Africa which saw more than 100 widebody charters. “This year we have a big charter programme from Saudia Cargo which has now signed up for a programme of more than 50 charters, so our charter business is growing well too.”
With quite a significant number of animal charters, the airport is also building new horse facilities to be ready for the Rio de Janeiro 2016 Olympics.
The Liège advantages
For Liège their mission as a freightercentric airport is clear: “The thing we are promoting to our customers and to the rest of the world – if you operate a freighter operate it into an airport that gives you the full advantage of operating a freighter.”
And this is where LGG excels. Freighters of course fly when the cargo needs to fly and being a 24/7 airport without any slot restrictions means freighter operators can fly in and out of Liege whenever it suits them best.
“If they want to do a quick turnaround we can do a turnaround in two hours. If they want to stay for 12 hours because that’s better in terms of cut-off times, we have the space available. So we offer all that. Our handlers are specialised in wide-body freighters because that’s what they do everyday,” says Verhasselt.
And then there is also the financial aspect – “operational savings are very important,” notes Verhasselt. “What we offer is direct into warehouse without any taxiing basically, so if you look at it from an operational point of view the savings in terms of taxiing compared to the big passenger hubs in Europe which also handle freighters like Frankfurt, Paris or Amsterdam is quite large.”
This can mean saving up to an hour, he says citing the example of a B777F on ACMI of which one block hour comes in at around US$12,000 plus crew, fuel and so on. “That’s where you really save money. In my landing fees I can give a discount, but a landing fee is not even 20 per cent of the $12,000 we are talking about.”
The airport also offers all the related services on a 24 hour basis, including Customs, phytosanitary, veterinary, laboratory, etc. “So we put the cargo on the road as quickly as possible and on the other hand you have the savings.
“We as an airport offer value for money and we have an open market for handlers so they compete with each other which means an airline can negotiate the best deal. It’s the same thing for fuel, everybody can supply fuel into the airport so the fuel suppliers have to battle it out for good rates as well.”
The road network is also an advantage, with Liège being only 21km from Maastricht in the Netherlands and 50 km from Aachen in Germany. Located next to the expressway, trucking to Amsterdam means there is no need to pass big cities like Brussels, Antwerp and Rotterdam and similarly trucking to Paris sees no need to pass any big cities until Paris.
Even the perishables traffic out of Africa such as fresh flowers flown in by Ethiopian and NAS take advantage of this, with significant volumes bypassing the flower markets and heading straight to markets in Russia by reefer trucks.
“All that combined with the operational savings means that value for money wise, I think we have a great proposal for freighter operators,” he says.
And of course the airport also handles pharmaceutical traffic with one of Liege’s ground handlers, LACHS, possessing all the certifications and an Envirotainer station at the airport. Aviapartner and Swissport are also embarking on CEIV Certification which will also boost the airport’s pharma-capabilities.
But while Verhasselt acknowledges the importance of pharmaceutical business, he highlights that pharmaceutical cargo is a business that requires small volumes and high frequencies. “So it is a part of our business and we are offering it, but we don’t see it as a determining factor for freighter operations. On the other hand if you have a freighter operation it will have some pharmaceuticals on board so you have to have everything in place and we do.”
The FedEx factor
And while the present and future look very good indeed for Liege, there is one potential storm cloud on the near horizon for the airport – FedEx’s ongoing acquisition bid for TNT. Just what that will mean for the airport is not yet clear, but Verhasselt is unperturbed.
“We did a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis and we put it under the O rather than the T. It’s very early days and TNT is very important for us, but communication lines with TNT and FexEx are open and we will see what happens.”
Under the previous attempt by UPS to buy TNT, one the European Commission’s requirements was that the airline be sold off and there was a provisional agreement with ASL Aviation to buy the shares of the airline and then lease back capacity to TNT. Liege believes this would be a similar situation should FedEx succeed where UPS failed.
But what if they were to lose TNT? “It would hurt, there’s no secret about it – today TNT is 35 per cent of our cargo throughput. Before, the ‘Plan B’ if we were to lose TNT we try to attract Fedex – that was the plan in the UPS takeover days. Now we will see.
“The three big integrators all have their hubs, but there are also new emerging players – Aramax in the Middle East and there’s the SF Express guys who are also looking into Europe and who already have a commercial agreement with TNT.” He added that SF Express is already in discussion with Liège Airport, “not about tomorrow, but about 2018, 2019,” he said.