BUD reveals China growth strategy, plans Asia routes

Tourism

Budapest Airport, operator of Ferenc Liszt International Airport (BUD), has revealed a new growth strategy for Asia to be launched in the new year, including additional direct freighter and belly cargo routes to China, alongside enhanced e-commerce capabilities at the Hungarian hub.

René Droese, executive director of property and cargo, Budapest Airport.

The plans align with the airport’s ongoing BUD 2020 expansion plan, a EUR 160 million development program including the EUR 32.6 mln Cargo City development scheduled to open in 2019, according to a press release sent to the Budapest Business Journal. The new program comes after the airport recently added new freighter operations from both AirBridgeCargo and Silk Way West Airlines.

A delegation from Budapest Airport also attended the 15th China Air Cargo Summit in Shanghai, meeting Chinese e-commerce firms and international companies based in the country with support from the Consulate General of Hungary in Shanghai.

"China plays a major part in our BUD 2020 growth program, and we are working together with some of the country’s largest logistics and transport companies to meet rising demand for imports from China," said René Droese, executive director of property and cargo at Budapest Airport. "The new freighter routes launched this year complement our existing direct and indirect scheduled freighter and belly cargo connections with China operated by Air China, Cargolux, Emirates, Qatar Airways Cargo, and Turkish Cargo."

"The forwarder community in our region is seeking new ways to reach the Asia market; in addition to this, we are witnessing increasing demand from Chinese e-commerce companies for new, efficient distribution hubs in Eastern Europe, which amounts to a unique opportunity for us," added Droese. He noted that e-commerce is a major driver of growth in the air cargo market, particularly in Hungary, which is seeing a more than 25% growth rate per year, one of the reasons Budapest is cited as one of the fastest-growing cargo airports in Europe.

The executive director also stressed that Eastern Europe represented around EUR 73 bln of the e-commerce market last year, which he considers a growing opportunity for the airport.

"The electronics and automotive business is booming in our region, and more Chinese investment was announced recently regarding these sectors," Droese said. "Our new Cargo City project, under construction with total investment value of about EUR 50 million, will provide fast and highly efficient logistics solutions for all business-to-business, business-to-consumer, and consumer-to-consumer markets."

Budapest Airport expects the new, additional routes to China to start next summer, with discussions ongoing with e-commerce companies such as Alibaba Group, SF, ZTO, and STO Express.

"We are witnessing historic moments in China; it was precisely 40 years ago that the Chinese Central Government, led by Deng Xiaoping, introduced the policy of opening the economy to foreign direct investment," noted Szilárd Bolla, the Consul General of Hungary in Shanghai. "Now, the government of Xi Jinping would like to call the attention of global players to the dynamically growing Chinese internal market. The quality of current diplomatic relations between the two countries and this momentum create an excellent opportunity for Hungarian businesses to enter the market."

Between October 2017 and October 2018, the volume of trucked and flown freight at Budapest Airport increased by 22.9%. From 2015 to 2018, cargo volumes increased by more than 60%, the press release noted.

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