Think big is the official policy of the Kazakhstan government. The visible result is the country's new capital Astana built from scratch and now a thriving city of over 800,000 inhabitants all within the last ten years. Since the airport has reached its limits a new one has been proposed. Cargo is a cornerstone of the ambitious project.
The future is just 35 kilometers away. There, southeast of Kazakhstan's capital Astana, a new airport will be erected in the coming years. A ring road displayed in the master plan presented by the city’s town planning office will link the place with the downtown area through seven arterial roads but also connect the airport with the Eurasian railway that runs right through Astana and a number of large logistics centers that are supposed to be set up along the ring road. "This way we'll become a multi-modal hub, offering the market adequate transport solutions and opportunities for contract logistics activities," says Baktybay Taitaliyev enthusiastically, Astana’s Chief Architect.
Cranes are popping up like mushrooms
However, when exactly the first earth will be moved at the future airport site is still undecided. It won't take too long, states the city developer, leaving no doubt. "Most likely by 2017, but possibly earlier," he announces, although in a surprisingly vague manner.
His indecisiveness is explained by the fact that a working group of experts are still putting their heads together to give the project its final shape. However, two main factors are driving things rather faster than slower forward: Astana is hosting the next World Expo in 2017 (see below) and - secondly, but foremost - the eagerness of the government to put the name of the state's capital with 814.000 inhabitants on the world map, the sooner the better. A new state-of-the-art airport that offers limitless growth opportunities for air traffic would undoubtedly be the most appropriate tool to achieve this ambitious aim. How seriously these growth plans are pursued can be seen today when visiting the city where cranes are popping up like mushrooms at just about every corner.
KC is becoming a network carrier
By 2030 Astana's number of residents is expected to nearly double today's figures. Accordingly, the city will expand, step by step into the scarcely vegetated steppe that stretches from its boundaries seemingly endlessly into the countryside.
In view of this perspective airlines need a new haven. All the more since Astana's current airport is reaching its limits. The existing location will be moderately enlarged to accommodate more passengers and cargo shipments to prevent constant traffic jams until the first aircraft will take off from the new airport. In particular to manage the constantly increasing amount of tonnage into and from Kazakhstan "we need a new airport that fulfills all the requirements expected by airlines, forwarders and consignees," states architectTaitaliyev. This all the more since Central Asia's largest carrier Air Astana (Code: KC) is changing its biz model step by step. "Our strategy until now was to mostly offer point-to-point traffic," says VP Public Relations Bella Tormysheva. Increasingly however, "we will become a network airline, linking intercontinental with intercontinental and also domestic routes," she announces.
Dual hub system
Accordingly, the ground infrastructure has to be amended enabling fast transits of passengers and cargo shipments. This accounts for both airports, Astana and Almaty that are linked by a multitude of shuttle flights operated by KC. "Astana will become the gateway for our European and western Russian traffic, whereas at Almaty we will concentrate our traffic flows to and from central Russia, the Far East and Southeast Asia," says Senior Vice President Sales Worldwide Richard Ledger.
For further information please click here to view our video with Richard
High yield cargo market
However, from an air freight perspective the dual hub strategy seems to be of only moderate attractiveness. This is due to a number of reasons:
First is that Kazakhstan is cargo-wise a high yield market, which makes transshipping of air freight only slightly attractive from a financial standpoint. “On rates we would have to compete with carriers that fly nonstop between the Pacific Rim and places in Europe," explains Cargo Sales Manager Olessya Kononova. She goes on to say: "Prices to and from Kazakhstan are quite healthy, so we better concentrate on that biz instead of focusing on the acquisition of transshipments."
A second obstacle for the transit of large volumes between Astana and Almaty is the limited capacity offered by the A320s, mostly operated by KC between both cities.
To round things off it can be said that the dual hub strategy pursued by Air Astana's top management will surely push the carrier's passenger numbers up, but is of limited value for cargo flows both from an operational and financial perspective. "We better try to optimize the utilization of our belly-hold capacity for consignments flown in the holds of our passenger aircraft between Europe and Kazakhstan and vice versa instead of filling the cargo compartments with shipments to beyond destinations located outside of Kazakhstan,” Sven Gossow recommends, KC's Head of Sales Germany.
This is fully in line with Olessya's and Richard's position on how to achieve the best profitability in cargo. At least, this adds up until Astana's future airport goes online, which eventually might become a game changer if KC should abandon the dual hub strategy and concentrate its operations there.
EXPO 2017 – worth going!
EXPO 2017, planned for Astana, Kazakhstan, under the main heading “Future Energy”. As oil production declines the world has no choice but to shift to alternative and renewable energies. The EXPO will serve as a platform for exchanging experiences from all over the world in the field of alternative energy, a rapidly growing sector.
Energy consumed by the expo community will be provided from renewable sources. Buildings will become generators of power, and their energy will be stored using innovative technologies while being distributed by a smart grid. The expo community will provide infrastructure to encourage and support the use of vehicles that use renewable fuels,” announces Adrian Smith + Gordon Gill Architecture (AS+GG) of Chicago. They had won the international design competition for building Astana’s EXPO village.
The event will take place from June 10, 2017 to September 10, 2017.