Looking to the outside
Lufthansa, like other carriers active in the area, is seeking to build up its reach beyond the main gateways of the Caspian region, which are still dominated by origin and destination traffic. “We are very active in Baku trying to build links to other regions through regional carriers – to eastern Kazakhstan, for example,” Becker said.
Azerbaijani all-cargo operator Silk Way West Airways certainly has its sights on transit flows beyond its home base, which is reflected in its freighter lineup, consisting of three 747-8 and two 747-400 freighters. “They try to run business from China over Baku to the U.S. and Europe,” Coyne remarked.
Besides China, Southeast Asia has become a larger focus for the Azerbaijani carrier. In March, Silk Way announced a block-space agreement with MAB Cargo on a twice-weekly Silk Way 747-8 from Kuala Lumpur via Baku to Amsterdam. “Leveraging existing interline and block-space agreements, this partnership will allow both airlines to have access to each other’s capacity across their respective global networks,” said Silk Way CEO Kamran Gasimov. “The first Azerbaijan freighter arriving in Kuala Lumpur airport has started a new page in our airline history. We will continue our network expansion into Southeast region and meet the changing needs of the market.”
The freighter block-pace deal is part of a broader agreement between the two carriers that aims to build up greater collaboration on capacity, ground handling and line maintenance. It should also facilitate the development of Kuala Lumpur and Baku into regional transit hubs, the pair have indicated. Silk Way underscored its ambition for a larger role beyond origin/destination traffic in the same month with the deployment of Descartes’ cloud-based Global Air Messaging Gateway, which helps users automate connectivity to trading partners, monitor shipment status in real time, and send status updates to forwarders and consignees.
Coyne said that the opening of Iran will bring opportunities for transit points in the region, but added that other barriers still remain. Yerevan, for instance, would be a potentially strong contender for hub status in the region, were it not for Armenia’s participation in a customs union with Russia, Belarus and Kazakhstan. This re-joining of forces has brought back Soviet Era customs practices, such as mandatory clearance of cargo at the point of entry.
In Kazakhstan, the customs practices have effectively stopped Coyne’s established strategy of serving multiple points on one routing. “Now you either leave or your plane sitting on the ground while they translate all the air waybills into Russian,” he said. By his estimate, the parking and translation fees would add US$1.50 to $2 per kilo to the rate.
There are also border disputes of a more dangerous kind. Relations between Armenia and Azerbaijan have been frosty ever since the clashes over the disputed enclave of Nagorno-Karabakh in the early 1990s. Hostilities erupted again in April this year, and trucking routes from Tbilisi to Yerevan have moved further inland as a result. But otherwise, the tension has not affected operations and cargo flows in the region, according to Coyne.