Silk Way West unveils plans for new cargo village

In another signal of a changing world, Silk Way West Airlines showcased plans for a major new facility as it expands its fleet.

At the Caspian Air Cargo Summit held in Baku on October 24 and 25, all-cargo carrier Silk Way West revealed plans to build its own ‘Cargo Village’ in the Alat Free Economic Zone (AFEZ) in Azerbaijan around 65 kms south of Baku.

The AFEZ plans also include the development of a new airport with stands for 18 widebody aircraft on a four km long runway and taxiway as well as an air traffic control centre, fuel and fire services and other related airport services.

First phase construction, which will begin next year, is for a 20,000 sq m cargo terminal with a bonded warehouse, a light industrial unit as well as perishable and processing facilities.

Jawad Dbila, business development advisor for the new development, said: “Other facilities will be following shortly afterwards. It will be operational in 2025,” he added.

Eight thousand hectares has been set aside for AFEZ overall. Not only is this to be a ‘smart city’ but the AFEZ will have a single regulator, a business centre as well as customs.

“Yes, the New International Cargo Airport and Silk Way Cargo Village in Alat Free Economic Zone is indeed unique in the region,” said Dbila.

“It is the only international cargo airport within a free zone, offering an attractive business environment with special preferences and opportunities for carriers, freight forwarders and investors. This distinction makes it a pioneering and highly advantageous hub for cargo operations in the area.”

Also at the summit, Silk Way West Airlines outlined its current network strategy and plans for the future.

“[The network is] very much Asia, Central Asia, Europe driven,” president and chief executive Wolfgang Meier told the Summit, adding there are some “important points” into the Americas among its forty destinations.

“It’s a very versatile network and you see we built it where the world’s biggest GDP is. We have built it up with a strong focus on Asia and on Central Asia which is our home turf,” Meier added.

Silk Way West has also invested in new aircraft.

“The strategic decision has been made to modernise the fleet and the tactical decision is how long we are going to keep the older planes in the fleet,” Meier told the Summit.

The carrier plans to add three Boeing 777s by 2025 and two 777-8Fs by 2029 as well as two Airbus A350Fs by 2027. Its fleet currently stands at 12 Boeing 747-400s.

Meier said that the carrier may also add Boeing 767 freighters at some point in the future, although it currently favours the larger widebodies.

Also at the summit, Marco Bloemen, managing director, Accenture – cargo advisory lead, said that countries around Russia were being used as import hubs for the country following the outbreak of the Ukraine war and resulting sanctions.

“Half of all the goods going into Russia by air are from China. That’s a seriously big number. Cargo is finding other ways to get into Russia.”

The examples he gave was Kazakhstan and Uzbekistan becoming gateways and importing more cargo.

“It’s a logical consequence,” said Bloeman.

Also speaking at the event, Björn Eckbauer, senior vice president global operations and procurement, DB Schenker, global airfreight, said that the changing market conditions meant that it was reviewing its charter network.

He said that Schenker is set to end its China charter flights that were introduced in response to the Covid pandemic.

The company had started its own flight operations between Germany and China and then later the US, but Eckbauer told the summit this is now “going to end”.

He added that China is now effectively two markets; e-commerce, “which pays very well to the airlines” and the traditional cargo markets.

He said that high tech and automotive volumes from the country had weakened, although he hoped the former might make a resurgence next year.

Eckbauer also noted companies switching to a China plus one strategy as they look to diversify their supply chains.

“We see that more and more happening,” said Eckbauer. “There is a strong tendency towards other countries in Southeast Asia, in India. Some are even going back to Europe.”