Budapest cargo is thriving, despite challenges

First, Hungary’s national carrier, Malev, collapsed. Next, the Hungarian parliament voted to increased land taxes. But through it all, Budapest Airport’s cargo business has been thriving, according to Christa Soltau, Budapest’s vice president, cargo and logistics.

Freight traffic has taken only a marginal hit from the collapse of the national carrier, she said. To offset the land-tax increase, however, Budapest officials will be raising rates. Carriers have recently received notice proposing a 30 percent hike in landing fees for 2013. With the tax increase also comes the cessation of investment work at the airport, which means work on the 11,000-square-meter Cargo City project has stopped. “We were all set to cut turf and have the project up and running later this year,” Soltau said. “Officially, it has been delayed by two years, but I am determined to implement it next year.”

Soltau insisted, though, that the delay will not impact the airport’s cargo handling ability. “We already have sufficient space, but current cargo handling facilities are spread between three buildings,” she said. “The Cargo City project is aimed at providing a more modern and efficient operation.”

Indications that Budapest’s cargo prospects remain on the up comes the recent arrival of a twice-weekly A330 freighter service operated by Qatar Airways Cargo between Doha and Budapest. Other cargo operators, such as Turkish Cargo, have reaffirmed their commitment to serving Budapest by increasing the frequency of its A310 freighter service from Istanbul to a  twice weekly rotation. The airline also wants to increase capacity on the route to larger A330F aircraft. “We see great potential in the Hungarian market,” said Levend Arisoy, general manger for Turkish Cargo in Hungary. “Hopefully, we can soon expand to three flights a week with the larger aircraft and build-up to what we would like to see as a daily operation.”

Cargolux remains the airport’s mainstay cargo operator and has developed Budapest as its fully-fledged gateway for Eastern Europe and beyond. The airline currently operates five B747 freighters a week through Budapest, originating in Hong Kong and flying onward to its main European hub in Luxembourg. According to Tony McNichol, Cargolux’s manager for central and eastern Europe, the airline’s traffic figures have held up, but the nature of the business has changed. “We used to move huge volumes of microchips from Asia into eastern Europe on behalf of companies like Nokia,” McNichol said. “But now Nokia is closing down plants in Hungary and  Romania and moving production to places like Vietnam.”

Cargolux has recovered the losses, McNichol said, but the balance of its business has shifted. “Around 20 percent of  our Budapest traffic was previously transit cargo, now the figure has climbed to nearer 40 percent,” McNichol said. “We have been able to spread the risk by developing a very intensive trucking operation out of Budapest to other eastern European points.”

Even with a threatened 30 percent hike in landing fees, McNichol said it’s unlikely Cargolux would consider a move away from Budapest. “We are very firmly established here and work well with the airport,” says McNichol. “Besides, we would consider any such proposed increase in landing fees as merely the starting point for discussions.”

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