The Belgian government has vowed to let DHL expand at either Brussels Zaventum airport or develop a hub at a regional airfield to allow the parcels express carrier to triple its operations in the country.

With the threat of DHL moving its largest European cargo hub out of the country if its growth is constrained, the Belgian government has said it will do everything it can to allow the carrier to expand, preferably at Zaventum.

The main limiting factor to DHL's growth is a limitation on the number of night flights allowed at Brussels. This is capped at 25,000 movements a year. At present, the number of night time movements stands at 21,800. DHL uses about 16,000 of these. According to DHL, its growth can be managed at Brussels under the current cap and at its current cargo base until about 2007. After that it has to "invest massively" to triple capacity from today's 1,000t a night to 3,000t by 2012.

After DHL started a search for an alternative European hub last year, the government responded by asking the Brussels International Airport Company (BIAC), which manages Zaventum, to study if any other airports in Belgium could be developed to meet DHL's needs and at what cost. Of the eight airports studied, the costs varied from €1.5 billion ($1.9 billion) to €2.2 billion. "Given the costs to the treasury, it is obvious that Brussels airport constitutes the cheapest solution," said BIAC.

In mid-January, the government said that the employment boost in and around Brussels because of DHL's expansion meant it was committed to keeping the carrier in Belgium. Discussions over the preferred Brussels expansion option will start between all parties, with a deadline to reach an agreement by September. If this cannot be found, the second option of developing the airports of either Bierset, Chievres or Jehonville will be explored.

DHL has become one of the most important customers of BIAC, which has seen traffic suffer in recent years following the collapse of Sabena and the bankruptcy of charter carrier City Bird in late 2001. Although traffic at Brussels is still around 30% down on the peak of 2000, it did recover by 5.4% to reach 15.1 million passengers last year. Cargo rose an impressive 17.3% to 603,737t, which is only 12% lower than that achieved in 2000. Recently cargo has been boosted by an increase in service from Asian carriers such as Taiwan's EVA Air and Singapore Airlines.

Retaining DHL at Brussels is important not only for BIAC but for the government which is preparing to sell some of its 63% shareholding in the company. The government, which has appointed the ING bank group to sell its stake, says it intends to retain at least a 30% share in BIAC.


Source: Airline Business