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Prioritising cargo – Belgium’s Liège Airport to invest EUR500 million in expansion drive

Analysis

There are several small airports in Europe that have chosen to prioritise cargo operations over passenger.

One of them is Liège Airport in Belgium, and arguably it is the most successful, handling aircraft from across the world and benefitting from its location close to major industrial conurbations.

Now the airport’s owners intend to invest EUR500 million in additional facilities to benefit both long haul services and maintenance operations.

Air cargo, which prospered during the COVID-19 pandemic, has faltered during the post-pandemic economic turndown, but recent statistics from IATA for the period 3Q2023 suggest that international cargo demand registered its first growth since the end of 2021.

Summary

  • Belgium’s largest cargo airport to make EUR500 million investment to attract more long haul services, also maintenance operations.
  • There are 25,000 jobs that could be added.
  • Liège is one of numerous European airports that prioritise freight over passenger flights.
  • Liège is situated in a commercial freight ‘golden triangle’ and close to huge industrial conurbations.
  • While cargo services grow, passenger traffic is in decline.
  • Cargo business was generally on the increase in 3Q2023. 

Belgium’s largest cargo airport is the seventh largest in Europe and 88th globally 

Liège Airport, also known as 'Liège-Bierset', is mainly used for freight operation, but it also serves several destinations with passenger flights.

The airport is located in the north-west of the city of Liège, in the east of Belgium. Liège is the country’s fifth largest city, with a population of 200,000.

Liège Airport is Belgium’s largest cargo airport and the seventh largest cargo airport in Europe, and 88th in the world for cargo payload.

EUR500 million investment targets additional long haul services, maintenance and logistics functions, allied to rail and waterways

Liège Airport has unveiled its 2023-2040 development plan, announcing a EUR500 million investment, primarily targeting the northern zone. The investment is in approximately 15 additional parking spaces for long haul aircraft adjacent to the runway, a new maintenance hangar, and further development of the logistics real estate, including the construction of three 12,500sqm warehouses to be leased out by Liège Airport.

The strategic focus revolves around transforming the airport into a versatile hub linked to rail, waterways, and air transport.

The main investors are Liège Airport, Liège Airport Business Park and Sowaer (Société Wallonne des Aéroports). Liège Airport Business Park is a real estate company, a subsidiary of Liège Airport.

Development: 55,000 annual flights and 25,000 jobs to be added in the planning period

The ambitious initiative aims to double flight frequency and job opportunities, reaching 55,000 flights and 25,000 jobs, respectively, within the prescribed period.

Moreover, plans include constructing a maintenance hangar capable of accommodating two large aircraft like the B747-400 (which are still used extensively in freight operations), emphasising the airport’s strategic growth.

Self-financing supported by bank loans is the chosen way forward – no private sector involvement

Funding for this substantial investment, coming from operating income such as landing charges and site rentals, supplemented by bank loans, is expected to ensure self-sufficiency, securing the project’s financial viability.

So far there has been no mention of any outside financial interest, such as in a public-private partnership.

There are numerous private sector companies that specialise in the financing and construction of outsourced facilities, such as cargo terminals and maintenance hangers.

One of numerous European airports that prioritise freight over passenger flights

There are numerous airports in Europe that prioritise air freight over passengers. The main reason is often their strategic location, close to major road and rail networks.

Moreover, they are the facilities that have historically attracted the interest of Chinese companies for investment – and as often in Eastern Europe as in the west.

This subject was examined in a CAPA - Centre for Aviation research report in 2016: Chinese Investment in Europe's Airports: 2016

Prime examples of these types of airports include the following, which are freight-oriented, or have been in recent history: 

In addition – Manston Airport, to the east of London, operated mainly as a cargo airport during the late 2000s and 2010s before it closed to commercial aviation in 2014. Planning permission has been given for it to reopen as a cargo airport, but the process is a long, slow one.

Liège is situated in a commercial freight ‘golden triangle’

Some of these airports – Liège, Ostend and Manston – fall within a small geographical area, separated by the English Channel; this is an area that counts as the most populated in Europe.

Indeed, Liège is located in the centre of a ‘golden triangle’: ParisAmsterdamFrankfurt, which handles 66% of European freight, and 75% when taken together with London.

It also sits right in the centre of the European ‘Blue Banana’, the commercial heart of Europe, and close to commercial areas that carry names such as the 'Randstad' (Amsterdam, Rotterdam, The Hague), the 'Flemish Diamond' (Antwerp, Brussels, Ghent) and the 'Ruhr Metropolis' (Dortmund, Düsseldorf, Cologne, etc.)

Location of Liège Airport: with respect to Ostend-Bruges and Manston (near Broadstairs) airports, and to heavily populated regions of west-central Europe

The network map below shows Liège Airport’s route map for the week beginning 27-Nov-2023, but most of the routes are cargo ones.

Liège Airport: network map for the week commencing 04-Dec-2023

Passenger traffic in decline

Indeed, passenger traffic at is contracting, as shown in the chart below which covers the last 10 years.

Having peaked in 2016, passenger numbers almost halved in 2017 and did not recover before the COVID-19 pandemic.

Liège Airport: annual traffic, passenger numbers/growth, 2013–2023 YTD

The airport is served exclusively by TUI (charters), with just five year-round destinations – all in Europe, although that number is supplemented by seven others in the northern summer months, compared to 38 nonstop freight destinations covering all continents.

No low cost or alliance airline presence

Thus, there is no low cost airline presence, at an airport perfect for that variety of airline operator, even if it is within striking distance of established low cost airports such as Charleroi and Weeze.

There is no passenger airline alliance representation.

This chart for peak time movements in the week commencing 04-Dec-2023 is indicative of the position: all the airlines recorded are cargo airlines or the freight arms of airlines.

Liège Airport: system movements share (peak operations), week commencing 04-Dec-2023

Cargo volume flown increased by a factor of three times from 2013 to 2021

The airport’s cargo volume stands in contrast to the passenger figures. In that case volume in 2021 was almost three times what it was in 2013.

Liège Airport: annual traffic, cargo volume/growth, 2013 to 3Q2022, tonnes

In line with that increase, volume capacity is also increasing again, after falling by 16% in 2020.

Liège Airport: annual cargo payload capacity (kg) and growth, 2013-2024*

Ethiopian Airlines the primary airline; China has the largest payload

The vast majority of that volume is taken by six airlines, as in the chart below, and it is led by Ethiopian Airlines, with 31%.

Liège Airport: total system cargo payload, by airline, week commencing 04-Dec-2023

Although Ethiopian Airlines has the largest airline payload, China has the largest payload by country, at 30% in the same period.

Finally, utilisation by the hour, as measured by arriving and departing payload, is high, as evidenced by this chart for Thursday 07-Dec-2023.

Liège Airport: system cargo payload per hour for 07-Dec-2023

It is evident that Liège has a sufficiently well established business base to merit this level of investment, with cargo air services to many points of the globe.

It has local competition with Maastricht Aachen Airport, but not enough to call the investment into question.

Cargo business generally on the increase in 3Q2023

The investment statement came just as IATA announced that global Cargo Tonne Kilometres (CTKs) increased by 0.6% year-on-year in 3Q2023 and that international demand registered its first growth since the end of 2021.

International capacity increased by 10.9%, but capacity on dedicated freighters fell by 0.14%.

Load factor reached 49%. Load factors on major trade lanes showed an upward trend by the end of 3Q2023.

Air cargo demand growth exceeded that of global goods trade for the first time since Dec-2021.

However, growth in world merchandise trade is anticipated to slow to 0.8% in 2023 – down from 3% in 2022.

IATA has stated that the decline can be attributed to persistent inflation, conflict in Europe and the Middle East, geopolitical tensions and supply chain issues.

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