TBY talks to the managers of two cargo firms, on the cargo sector in Azerbaijan.
How well developed are Cargolux’s operations in Azerbaijan?
BÜLENT İLHAN Baku is centrally placed between Asia and Europe, and the development of Baku airport has come about rapidly. The development of this cargo terminal is exceptional too. It’s the biggest and best in the entire region, including all the CIS states and even Turkey. The storage facilities are perfect, built to handle any kind of cargo, and it is a smaller copy of the facilities in Luxemburg. Baku has truly become a regional hub in cargo transport. The runway in Baku airport features a system that enables very low visibility landings. No other country in the whole area has this—not even Moscow or Istanbul. So we as Cargolux are very happy with our operations here. It’s a hub that feeds western Kazakhstan, Turkmenistan, Afghanistan, and Iraq, among other countries.
Which sectors do you primarily serve?
NARGIZ HAYATOVA At the beginning of our operations we mainly served the oil and gas sectors. However, we are now advancing and becoming involved in a more diverse range of sectors. As we offer the widest range of cargo services, we are able to cater for all industrial sectors that are time sensitive and demand special attention. This includes cargo from sectors such as pharmaceuticals, agriculture, banking, and luxury goods.
What are the most prevalent cargo types being imported into Azerbaijan?
Bİ Mainly equipment for the oil and gas industry, originally for the big oil pipelines like the Baku-Tbilisi-Ceyhan (BTC) pipeline and the Shah Deniz project, which are finished or nearing completion. There are always new projects coming out; one is a new gas pipeline passing through Kars and Erzurum in Turkey, another is the Baku-Tbilisi-Kars railway. But in the long term, more diversification is needed in the economy. One day the crude oil will run out, and Azerbaijan needs to produce, manufacture, and export things other than oil and gas.
During the recent global economic crisis, did you notice any fall off in demand? What strategies did you implement to maintain market share and further improve business?
NH The global economic crisis hit our market with a delay of three to four months compared to the rest of the world. By taking into account that most business in Azerbaijan is based on projects, which are tendered in the market, the main players managed to maintain the same level of activity throughout the downturn.
However, local SMEs were definitely affected and we did notice a fall off in demand for airfreight services. We did our utmost to accommodate our customers’ requests in order to secure tonnage and revenues with a clear focus on regaining profitable operations.
How is the customs situation in Azerbaijan?
Bİ In our first year here, customs regulations and rules were virtually non-existent. Now we know what is what, how much of what kind of product is taxed, and what the import regulations are. A new method in use, which we have just started using in Azerbaijan as well, is consolidated cargo, whereby high-density cargo and volume cargo are mixed together and space is bought from airlines under a single airway bill. The consolidators are then able to make better profits.
What is your general outlook for the airfreight market in Azerbaijan in 2011 and beyond?
NH Azerbaijan has one of the fastest growing economies in the region in terms of airfreight demand. The advantage of the geographical position of Azerbaijan makes Baku the main airfreight hub for the Caspian and Central Asian region. Our outlook for the airfreight market is very positive.
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