Liege Airport: a successful gamble
Following on from its a military past, Liege Airport embarked on a new civilian life in the 1990s. We take a look back, together with the airport’s CEO Luc Partoune, at the decisions that led to exponential growth.
Freight instead of charters
When Luc Partoune took over as head of Liege Airport in 1994, the airport went through a period of major change. “Studies very quickly confirmed that the airport’s future lay in freight rather than charter flights,” he explained. This reflects the particularly intense competition in the passenger sector within the region, with Zaventem and Charleroi airports, as well as Düsseldorf and Cologne in Germany. To transform the airport into a major player, substantial investments were required, including the construction of new warehouses for goods and the purchase of military land.
An ecosystem revolving centred around logistics activities
The real boom in the airport's transportation business started with the arrival of the giant TNT in 1998. However, this explosive growth in the number of flights, mainly at night, created a need for new investments. For Luc Partoune, any activities that would disturb local residents was out of the question. “We wanted to maintain the night flights as these are one of our competitive advantages in attracting freight business. One important positive point is the fact that we don't fly very close over the city of Liege, which already reduced noise pollution. We asked experts to draw up a noise map. They identified 1 zone where residential housing would no longer be possible and 3 zones where residents would be given an allowance for extra insulation. Together with SOWAER (Société Wallonne des Aéroports), we purchased 2,000 houses and insulated a further 10,000 dwellings.”
All the land purchased from residents and the military was gradually converted into a business zone. “The idea was to create the framework for an ecosystem revolving around logistics, with warehouses, transport companies, security and handling companies.
An integrated service for e-commerce
This logistics eco-system is now a reality. “Purchasing all this land 25 years ago was, in some ways, a crazy gamble, but we are reaping the benefits today,” commented Luc Partoune with satisfaction. “To serve the needs of e-commerce operators, for example, you need to be able to receive large carriers from producing countries and to allow customers to build or rent warehouses and transhipment units for transferring goods to smaller aircraft or lorries, or even vans for the crucial ‘last mile’ in this sector.”
Investing in niches
In addition to e-commerce, which is its most recent development, Liege Airport has spent the last 25 years pursuing a strategy of identifying niche markets where it can create added value. It has five such historic niches:
- Express freight - based at the FEDEX/TNT hub (sorting centre) which enables delivery of parcels and goods all over Europe in record times
- Cut flowers - Liege Airport is the European hub for Ethiopian Airlines which manages most of the transportation of these flowers from Ethiopia, one of the biggest producing countries
- Fresh products - like flowers, this activity requires fast processing times and a refrigerated infrastructure
- Pharmaceutical, biological and medical products
- Transportation of competition horses to event venues - a very delicate activity with high added value. This is a huge market in which Liege Airport has made major investments to become one of the key players. They have built a “horse hotel” with 60 luxury horseboxes to accommodate guests awaiting transhipment in aircraft specially designed for equestrian transportation. At present, over 5,000 horses pass through the airport.
New growth from China
The airport’s e-commerce business has now received a new boost further to an agreement concluded with the Chinese giant Alibaba. “We have been chosen as their air hub for Europe,” explains Liege Airport's CEO. “From existing e-commerce business to flowers, vegetables and horses, we have focused on operations requiring both speed and technical skill. Our experience, combined with our ability to work 24 hours a day, undoubtedly swung the balance.”
- Launch a strategic collaboration with customs: new tax incentives introduced in Belgium to give logistics companies an extra boost have attracted very little attention in the media. However, these measures proved to be crucial during negotiations with Alibaba, helping to tip the scales in Belgium's favour.
- Fast-track customs clearance: the cost of night working puts Belgium at a disadvantage in comparison to neighbouring countries. To offset this drawback, the Belgian finance department took a vital decision: to invest and adapt the regulations to allow fast-track customs clearance for a large number of products in logistics hubs such as Liege Airport.
- Put a strategic vision in place: beyond ‘quick business’ and easy wins, the key to success is to have a real long-term vision.
- Secure the means to achieve your ambitions: the gamble of purchasing the houses paid off thanks to a real strategic vision.
- Take up the internationalisation challenge: with a globalised economy and business operations, growth depends on international development. To succeed, you need to be where things are happening. And if this is on the other side of the world, that's where you need to go.