Central Asia growth outpaces the overall market

10 / 10 / 2017

Cargo demand to and from central Asia is growing at a faster pace than the overall market, while the region’s airlines could also benefit from their position between Asia and Europe.

Speaking at the Caspian Air Cargo Summit in Baku, World ACD Market Data director Ken de Witt Hamer said that between 2015 and August 2017 the overall cargo market had grown at a compound annual growth rate of 6%.

Meanwhile, the central Asia air cargo had grown at a rate of 11%, more than the analyst’s main six regions of: Africa, Asia Pacific, Central and South America, Europe, East and South Asia and North America.

Over the first eight months of this year, it has fallen slightly behind with its growth rate narrowing to 4%. However, this is largely down to Russia and with figures from that country stripped out, central Asia has grown at a rate of 18%.

Much of the growth this year has been to the destinations of Asia Pacific and Africa, with year-on-year growth rates of 35% and 48% respectively.

On imports, the larger of the two, Asia Pacific grew by 19%, Europe 21%, East and South Asia 15% and North America 32%.

Looking at the largest country pairs, Turkey to Kyrgyzstan is up 48% year on year over the first eight months of 2017, Turkey to Kazakhstan improved by 45%, Netherlands to Kazakhstan was up 159%, Germany to Kazakhstan increased 23% and Turkey to Uzbekistan registered a 123% improvement.

On imports into the region, Hong Kong to Ukraine increased by 50%, China to Ukraine 43%, there was a 4% drop on China to Kyrgyzstan, China to Kazakhstan jumped 46% and there was a 64% improvement on China to Uzbekistan.

Looking at yields to the region in dollars, the news was not quite so positive as many types of cargo had noted a year-on-year decline up to August: perishables was down 4%, dangerous goods 3%, live animals 16% and valuables 6%.

On the other side, general cargo was up 1%, there was a 4% improvement on and high tech and 5% on pharma.

Other findings from de Witt Hamer’s presentation were that European airlines accounted for most of the cargo to the region, although AirBridgeCargo was the biggest carrier and Asia Pacific airlines have gained the most marketshare this year.

Looking ahead, growth in cargo volumes to the region is expected to continue as the its GDP is expected to return from a decline of 3.7% in 2016 to an increase of 3% per year in 2019-2022.

Also, the top 20 forwarders have less of a marketshare in the region (33% inbound and 14% outbound) than they do overall, where they have a 43% share.

Finally, de Witt Hamer highlighted an opportunity for airlines in the region, pointing out that while imports and exports to central Asia are a big opportunity, carriers are also well positioned to capitalise on the trade between Asia and Europe.

He pointed out that China to Europe is three times the size of the total central Asia market, Asia Pacific to Europe was seven times the size and Europe to Asia Pacific was eight times the size.