Effects of the airport cargo developments

on the competitiveness of the region Airport region cluster conference – HIPA, 26.02.2016

• 100% privatized and managed by

AviAlliance consortium

• 340 Mio. EUR investment since

2007 in new infrastructure and

buildings

• 926 employees (including

affiliates)

• 10.3 million passengers in 2015

• 91,500 tons cargo

• 87,000 A/C movements

• 5.800 freighter movements

Budapest Airport – Fast Facts

52,67%

22,17%

20,17%

5,00%

AviAllianceGmbH

MaltonInvestment PteLtd.

Caisse de dépotet placement duQuébec

KfW IPEX-BankGmbH

Ownership structure of Budapest Airport

Emirates started daily

flights to Budapest

from October 2014,

A330-200, with belly

cargo capacity of 12

tons per flight.

They increase

capacities from

December 2015 to

B777.

Turkish Cargo increased from 2 to

3 the weekly frequency of

operation to Istanbul by the end

of 2014.

Cargolux kept on

handling the highest

cargo volume more than

11.000 tons in 2014 via

3 flights per week from

HKG

Cargo market development

In May 2015 Air China started 4

flights per week passenger flight

operation to Beijing with 10 tons

/ flight cargo capacity to each

direction.

In 2015:

• 91,500 tons cargo, steadily growing market with 5,800 freighter ATM

• 1,6% total cargo market increase

• 6,4% increase in total air cargo volume compared to 2014

• 8,8% total market volume increase in January 2016

Increase of

dedicated

special cargo

charters by

2014-2015

In March 2016 Qatar

Airways Cargo will start

operation of Doha-

Budapest-Prague-Doha

freighter route with A330-

200 (about 65 tons cargo

capacity), two flights per

week

The total Integrator market (DHL, Fedex, TNT, UPS) increases steadily,

provides about half of BUD air cargo volume

Integrators

Major Integrators have daily flight connection to their

European hubs (DHL, FEDEX, TNT, UPS)

- with daily feeder fligths from more airports in the region

• Budapest has a great geographical location in Central and

Eastern Europe to be regional distribution hub

• Extensive road (highway) network to the neighboring 9

countries and to the 20 countries in trucking distance, four Pan

European Corridors crossing Hungary

• Airport has direct highway connection

• Developing local air cargo related industries (mechanical

engineering, automotive, electronics and telecommunication,

pharmaceutical)

• Industrial growth in Hungary

• 24/7 operation, available night slots

• 24/7 customs clearance, bonded warehouses

• Ability to handle all, Category D, even E and F aircrafts

• Two independent Runways, always available apron capacities in

24/7, also in case of longer term parking and loading times

• Flexible and co-operative Airport Operation Team and Air

Control Authority

• Competitive cargo handling prices and professional handlers

• Very favorable incentive scheme for landing charges (e.g. 100%

discount in the first year of operation for a new cargo route)

• Continuously expanding freighter, belly cargo and integrator

network

Potentials of Budapest Airport in Cargo Development

Major roles of airport logistics in the industry

Gateway

Engine

– In total there are 65 000 jobs in Hungary

associated with airport operations,

contributing 1.6% to the GDP

– Of these 22 200 jobs are at and around the

airport, contributing 0.5% to the GDP

– Additional 43 300 jobs in tourism and

commerce

– 1 % increase in passenger traffic generates a

1 % growth in economic impacts

– one million additional passengers generate

approximately 1300 new jobs and contribute 13

billion HUF to the GDP

– 90.000 tons cargo = ~900 direct jobs and

5,850 tons indirect jobs

– 10 000 tons of cargo volume increase at BUD

(~10%) generates 95 new direct jobs and 617

jobs in logistics in total

The airport is a key driver of the regional and

national economy – an ACI Europe study

The success of Budapest Airport is the success of Hungary

Impacts of BUD Cargo development on Hungary

• Increase cargo traffic and convince

airlines to open new cargo routes

Main air cargo route opening target

regions:

North America Middle East, Asia,

South America, Africa

• Increase air cargo volumes flowing

through Budapest Airport

• Attract new cargo operator

companies to BUD

• Improve air cargo business

environment and infrastructure

Air Cargo buildings

Integrator buildings

Rail Cargo terminal

Development

goals of

• Better transport opportunities and improved accessibility to the world

market improves the competitiveness of the Hungarian products

• More direct air cargo route connections provides more efficient export and

import transport options for air cargo relevant products, and makes

Hungary more attractive location for the Logistic Investments and also for

the Manufacturing Companies

• Direct cargo connections improve the economic relationships of Hungary

with the partner countries

• More flights and more cargo volume result more workplaces in

Airport operation, security, custom clearance and flight handling

Cargo handling at the airport

Logistic business at the forwarders, transporters

(Cargo operation is a labor intensive business)

Gains for

• Logistic investments opportunities in warehouses, offices and other

facilities attract foreign FDI to Hungary

• Air cargo development increase GDP and tax revenues

Property and cargo development potential

Cargo City

Business Park

Airport Hotel

Aircraft maintenance

Office Park

9

Integrator activity

bud:property – supporting cargo- and logistic growth

BUD office center

Magyar Posta, International Postal Distribution Center DHL Global Forwarding & Freight

• In addition to growing passenger traffic, cargo

and logistics services are being extended at

the airport too

• In recent years, we built new facilities

investing more than EUR 20 million

• Further developments are in the execution

pipeline (TNT, DHL Express) in order to

establish a leading role in Central Eastern

Europe.

10

Integrated Multi modal concept

For Cargo Developments

DHL Global Forwarding

DHL Freight

(2013)

Hungarian Post

(2010)

Forwarders

(2017-)

Railway cargo terminal

2016-2017

Cargo City

(2017-2018)

Integrator projects for

DHL and TNT

(2016-2017)

• A project co-funded by the European

Commission provides new service roads and

rail access in the airport area

• Upgrade of Express Road to be performed

by City of Budapest

• Rail-road-air interconnectivity to be

strengthened in order to generate more

growth and economic development

Some success stories

Leipzig, Halle – Germany, DHL Hub

It was opened in 2008 with 48,000 m2 warehouse and

23,000 m2 hangar: cargo volume increased from 52.000

tons to 760.000 tons in 3 years, 10,000 new jobs created.

Project value was 70m EUR.

Memphis Airport, Tennessee, USA, Fedex Hub

It opened its current "SuperHub" facility on the north side

of the airport in 1981. By 2009 the airport had 3.7 million

tons of air cargo (95% handled by the Fedex Hub),

220.000 jobs created (one airport workplace generated 3

indirect jobs).

Zhengzhou Airport China

In November 2011 the City opened a 5 m2 km customs –

free bonded zone for high value, time critical

manufacturing and distribution. Foxconn located a

manufacturing campus with 240,000 workers for I phone

assembling. The smartphone business doubled the export

value of the Henan province in one year. By 2013 48 new

projects (IBM, Microsoft, Amer Int., Cainiao Networks)

followed Foxconn with total value of 24,3 billion USD.

Thank you for your attention!

Looking forward to see Qatar Cargo

at Budapest!

József Kossuth

Cargo Manager

Budapest Airport Zrt. Tel: +36 1 296 6264

E-mail: jozsef.kossuth_pu@bud.hu

René Droese

Director Property

Budapest Airport Zrt. Tel: +36 1 296 6746

E-mail: rene.droese@bud.hu

Thank you for your attention!

The information in this document is confidential and may not be disclosed to any other person

without Budapest Airport Zrt.’s (“BUD”) prior written approval. BUD’s prior written approval is not

needed provided the disclosure of such information is required by law or by binding court ruling.

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relating to the information included in this document.

The disclosure of any matter or information in or by this document does not imply the existence of

any warranty, representation, undertaking, indemnity or other obligation or commitment of BUD

or its Affiliate. Accordingly, this disclosure does not extend the scope of the warranties,

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Disclaimer

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