Georgian Airways recently unveiled a new cargo air route connecting Tbilisi, Georgia to Ashgabat, Turkmenistan via Meilan, China.
This strategic expansion is poised to enhance trade connectivity, streamline logistics, and foster economic growth across the caucuses and Central Asian regions.
Strengthening trade
The launch of the new cargo route by Georgian Airways is aimed at bolstering trade links between Georgia, Turkmenistan and China. By establishing this route, Georgian Airways is not only expanding its network but also facilitating smoother and more efficient cargo transportation across these key regions.
Tbilisi, the capital of Georgia, has seen significant growth in air cargo traffic. The Tbilisi International Airport (TBS) serves as a key hub for cargo movement in the South Caucasus region. In recent years, Tbilisi International Airport has handled an increasing volume of cargo. In 2023, the airport processed approximately 35,000 metric tonnes of airfreight, reflecting a steady annual growth rate of around 7 percent.
The primary commodities transported through Tbilisi include pharmaceuticals, electronics, machinery, and perishable goods such as fruits and vegetables.
Turkmenistan, on the other hand, has its air cargo industry centred around the Ashgabat International Airport (ASB), which has developed into a crucial transit point for goods moving between Europe and Asia. Ashgabat International Airport handled around 50,000 metric tonnes of cargo in 2023.
The growth rate has been moderate, with an annual increase of approximately 5 percent. Major commodities include oil and gas equipment, textiles, agricultural products, and industrial machinery. Turkmenistan’s key trade partners for air cargo are Russia, Turkey, and China. The strategic location makes it an important transit hub for goods traveling along the Belt and Road Initiative (BRI) corridor.
China’s air cargo sector is among the largest in the world, with multiple airports handling substantial volumes of freight. For the purpose of this analysis, we focus on key airports like Beijing Capital International Airport (PEK), Shanghai Pudong International Airport (PVG), and Guangzhou Baiyun International Airport (CAN). In 2023, these major airports collectively handled over 7 million metric tonnes of cargo. The annual growth rate has been robust, averaging around 10 percent.
Electronics, machinery, textiles, pharmaceuticals, and e-commerce goods dominate China’s air cargo exports. Imports primarily include high-tech components, luxury goods, and agricultural products.
The United States, European Union countries, and Asian neighbours like Japan and South Korea are China’s top trade partners. The air cargo routes to Tbilisi and Turkmenistan have gained prominence due to the BRI.
Agreements and impact
Georgia’s strategic location and open-market policies have fostered strong trade relations with both European and Asian countries.
Key trade agreements including the Deep and Comprehensive Free Trade Area (DCFTA) agreement with the European Union has boosted trade by reducing tariffs and aligning Georgia’s regulatory framework with EU standards, while, free trade agreements (FTAs) with China, which has significantly increased bilateral trade between two nations.
Turkmenistan’s trade policies are characterized by a focus on enhancing connectivity and infrastructure development.
As a participant in China’s initiative, Turkmenistan has benefited from infrastructure investments aimed at improving trade routes. This has led to increased rail and air cargo traffic, particularly for goods transiting between China and Europe.
Economic cooperation agreements with countries like Turkey and Russia have strengthened trade ties, fostering growth in air cargo volumes.
Economic Benefits for the Involved Regions
For Georgia, the new cargo route presents an opportunity to enhance its status as a regional logistics hub. The country’s strategic location at the crossroads of Europe and Asia makes it an ideal transit point for cargo. With improved air connectivity, Georgian businesses can more efficiently export and import goods, fostering economic growth and development.
Additionally, the increased cargo traffic is likely to boost the local logistics and transportation sectors. This growth can create new jobs and stimulate investments in infrastructure and related services, contributing to the overall economic prosperity of the country.
Turkmenistan, with its rich natural resources and growing industrial base, stands to gain significantly from this new route. Enhanced air cargo connectivity will facilitate the export of Turkmenistan’s products, such as textiles, agricultural goods, and energy resources, to international markets.
Furthermore, the improved logistics infrastructure can attract foreign investments and encourage the development of new industries. By leveraging the new cargo route, Turkmenistan can diversify its economy and reduce its dependence on traditional trade routes.
For China, the new route underscores its role as a central player in global trade. The connectivity to Georgia and Turkmenistan aligns with China’s BRI, which aims to enhance trade and investment flows across Asia, Europe, and Africa. By supporting new air cargo routes, China can facilitate smoother trade operations and strengthen its economic ties with these regions.
The improved air cargo links facilitate faster and more efficient trade between Europe and Asia, contributing to economic growth and development in the regions. Countries like Georgia and Turkmenistan can diversify their economies by leveraging their strategic locations to become key transit hubs.
Investments in airport infrastructure and logistics capabilities are essential to accommodate the growing air cargo volumes. The BRI enhances China’s geopolitical influence by strengthening economic ties with participating countries. This has broader implications for global trade dynamics.
Operational and Logistical Advantages
The new cargo route offers several operational and logistical advantages. Firstly, it provides a faster alternative to sea and land transportation, which is crucial for time-sensitive goods such as perishable items and high-value electronics. The reduction in transit times can lead to cost savings for businesses and increase the efficiency of supply chains.
Secondly, the route enhances the reliability of cargo transportation. Air freight is less susceptible to disruptions caused by geopolitical tensions, border issues, or natural disasters, making it a more secure option for international trade.
Challenges and Mitigation Strategies
While the new cargo route presents numerous benefits, it also comes with challenges that need to be addressed. Navigating the smooth transition of multiple countries can be complex. Georgian Airways will need to ensure compliance with customs, safety, and security regulations in Georgia, China, and Turkmenistan.
Collaborating with local authorities and leveraging technology for efficient documentation and compliance can mitigate this challenge. Meanwhile, adequate infrastructure at airports especially in Georgia and Turkmenistan is essential for the smooth handling and efficient movement of cargo.
Investments in cargo terminals, warehousing facilities, and ground handling services will be necessary to support the increased cargo volumes.
Lastly, the air cargo market is highly competitive, with established players dominating key routes. Georgian Airways will need to differentiate itself by offering competitive pricing, superior service quality, and reliable schedules to attract and retain customers.
