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Budapest Airport Can Be a Potential Leader in European Air Cargo Business

Hungary Today 2024.03.21.

Passenger traffic at Budapest Airport often takes center stage, yet the real potential for buying back the airport lies in harnessing freight transport. According to Index, Budapest Airport has the capacity to become a European leader in cargo business, emulating Leipzig’s success, with the Chinese connection poised to play a pivotal role in this endeavor.

A behind-the-scenes negotiation process is unfolding for the buy-back of Budapest Liszt Ferenc International Airport. Last autumn, the Hungarian government took strategic steps to secure funds for this transaction, divesting mainly minority-owned, non-strategic investments to acquire a majority stake in the airport. This move, as explained by logistics expert Péter Ilg, managing director of PMI Logistics Solutions Ltd., involved reducing stakes in various entities, such as the Vienna Insurance Group and Erste Bank Hungary, and divesting shares in telecom companies.

Budapest Airport showcased robust performance, with 14.7 million passengers in the previous year, marking a 20.5 percent annual growth and a 90.9 percent recovery compared to pre-pandemic levels. Notably, air cargo traffic surged by 3.8 percent to a record 201,300 tons.

Despite periodic negative results, Budapest Airport Zrt. remains profitable, capable of paying substantial dividends annually. However, Ilg emphasized the importance of analyzing the professional aspects of the transaction, highlighting Budapest’s potential as both a tourist destination and a burgeoning logistical hub.

The cargo business, the expert stressed, is not only crisis-proof but also expanding dynamically.

Budapest Airport’s handling of over 200,000 tons of cargo last year is a testament to its potential. Drawing parallels with Leipzig, which experienced exponential growth in cargo traffic, Ilg emphasized Budapest’s favorable positioning for similar ascent.

Budapest’s potential lies in several factors: current air cargo demand in the region is substantial, the airport has ample capacity for expansion, no major cargo airline hubs exist in Eastern EU countries, and its strategic location enhances its appeal.

Mr. Ilg predicted that Budapest Airport could surpass Vienna and rival Munich’s cargo handling capacity, calling for new investment targets and development initiatives.

Furthermore, Budapest Airport’s role as an air bridge between East and West is pivotal.

Significant cargo links with major hubs in China and South Korea have been established, facilitating product delivery to Hungary. Closer collaboration with airlines from the Far East could position Budapest as a regional hub for air cargo distribution, unlocking vast traffic potential.

The government’s economic development targets aim to increase the logistics sector’s contribution to GDP to 10 percent by 2030, highlighting the importance of Budapest Airport’s development. Passenger traffic could reach 20 million by 2030, while cargo traffic could approach a million tons, mirroring Leipzig’s trajectory.

Achieving these goals requires clear objectives and comprehensive economic development action, with the airport’s acquisition serving as a crucial component. Rapid development, facilitated by the buy-back, could accelerate Budapest Airport’s growth beyond organic expansion, maximizing its potential as a key player in the European cargo business.

Budapest Airport Kicks off 2024 with over One Million Passengers
Budapest Airport Kicks off 2024 with over One Million Passengers

In addition, the cargo business has never seen such strong traffic in the first month of the year.Continue reading

Via Index; Featured Image: Facebook / Budapest Airport

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