1. Session 2: Kazakhstan – Regional Air Hub
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»
Session 2: Kazakhstan – Regional Air Hub
November 07, 2013
Moderated by:
Thomas J. Niehaus
Associate Partner & Manager for the CIS region

2. Scheduled flights to/from Kazakhstan, all carriers, summer 2013
Kopf
The scheduled airline network currently connects Kazakhstan heavily to Russia, but also Europe, Asia and Middle East
Scheduled flights to/from Kazakhstan, all carriers, summer 2013
Aviation environment currently undergoes a dramatic development in Kazakhstan
ICAO team working on implementing international quality and safety standards (incl. some airlines having their AOC revoked)
aim to remove the EU blacklisting of airlines in Kazakhstan
Airport development in Kazakhstan aiming at new levels of service and infrastructure
Airlines growing network and hence passenger and cargo business
Source: AirportIS
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

3. Expected growth of the O&D traffic to and from Kazakhstan by 2018
Kopf
Within 5 years overall air traffic on markets to and from Kazakhstan is expected to grow 14%
Expected growth of the O&D traffic to and from Kazakhstan by 2018
Europe
~15%
Russia
~10%
+13%
+11%
~ 43%
Domestic KZ
+13%
~9%
~6%
+15%
Turkey
+14%
Asia Pacific
~ 4%
CIS
~7%
China
+13%
~5%
<1%
+16%
+14%
+13%
Middle East
America
Key …
Regional distribution of traffic 2018 …
CAGR 2014–2018 growth
Note: CAGR = Compound annual growth rate, O&D = origin and destination: Source: Lufthansa Consulting, AirportIS, IMF GDP forecast
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

4. Air-Cargo (incl. mail) tons in 2012 – selected airports
Kopf
Almaty is the biggest cargo airport in Kazakhstan and CIS, but like other Russian & CIS airports is dominated by international inbound cargo
Air-Cargo (incl. mail) tons in 2012 – selected airports
In 2012 approx. 100 thousand tons or air cargo have been transported at airports in Kazakhstan
Due to the structure of the economy air cargo mainly are international inbound goods for consumption or materials for productive usage
Even all three Moscow airports ‘only’ handled 540 thousand tons of air cargo
Larger cargo volumes at other airports are driven by
a passenger airline actively developing the business within their passenger aircraft bellys and/or
a full freighter airline
In Kazakhstan the local passenger airlines only play a minor role in the cargo business so far
Note: ALA figure is for 2011 (latest available year); MOW figure is the sum of volumes of SVO, DME, VKO
Sources: Albatross Database, ACI, Lufthansa Consulting Analysis
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

5. Kazakhstan as intermodal transfer hub for cargo
Kopf
The main targeted lever of growth in air cargo therefore lies in participating in the international transfer cargo market
Kazakhstan as intermodal transfer hub for cargo
By 2020 the Government strategy is to increase total international transfer cargo flows via Kazakhstan by 81%
in 2010 Kazakhstan handled 18 million tons of cargo
in 2020 the objective is to handle 32 million tons
Currently the share of international transfer air cargo of total international transfer cargo is < 0,1%
Part of the Government strategy is to create an intermodal transfer hub
which mainly focuses on cargo flows from East to West (e.g. CN  EU & RU), but also
acts as a distribution center within Kazakhstan and
connects rail, road and air transport
Source: KTZ Express, Lufthansa Consulting analysis
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

6. Kopf
Projections of future transfer cargo flows directions indicate where air freight as part of the intermodal chain should focus on
International transfer cargo flows via Kazakhstan – historic and projected volumes
Direction
2010
2020
2030
Growth
China-EU-China
125
5.368
7.483
4194%
EU-Korea-EU
583
747 -
EU-Japan-EU
477
575
China-Russia-China
2.446
5.481
7.993
124%
China-Uzbekistan-China
1.403
2.647
4.691
89%
China-Iran-China
1.708
3.327
Russia-Uzbekistan-Russia
3.060
4.755
6.297
55%
Russia-Tadjikistan-Russia
1.569
2.514
3.694
60%
Russia-Kyrgyzstan-Russia
1.400
2.368
3.813
69%
Russia-Afghanistan-Russia
795
1.477
2.184
86%
Russia-Turkmenistan-Russia
455
916
1.622
101%
Russia-Iran-Russia 16
502
740
3038%
Russia-Korea-Russia
224
301
Russia-Japan-Russia
145
195
Korea-Uzbekistan 34
111
149
226%
Japan-Uzbekistan 1 3 4
200%
Japan-ТТК
Korea-ТТК 20 32
Other
2.668
3.252
3.965
22%
Total:
13.974
32.555
47.816
133%
Major growth is targeted within the China trade flows (mainly east-west) to/from EU
Russia
Uzbekistan
Iran
Next to China also cargo flows to / from Russia are expected to grow significantly (north-south-north)
Within an intermodal transfer hub the strategy needs to take into account the specifics of airfreight, but also needs to connect the main streams to an airport
Source: KTZ Express, Lufthansa Consulting Analysis
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

7. Global comparison of LPI*
The Logistics Performance Index measures the logistics environment of most of the countries worldwide, highlighting the needs for improvement
Global comparison of LPI*
Criteria measured by LPI: Efficiency of the customs clearance process, quality of trade and transport infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services, ability to track and trace consignments, timeliness of shipments in reaching destination within scheduled delivery time
Kazakhstan is ranked 86th: Singapore 4, Hong Kong 4, Turkey 3, Georgia 2, Dominican Republic 2, Kazakhstan 2, Niger Belarus 2, Russian Federation 2,58
The country is currently targeting to be within the top 40 positions by 2020
Legend 1: lowest score; 5: highest score
UK = 3,90
Kazakhstan: 2,69
China = 3,52
Canada = 3,85
USA = 3,93
Turkey: 3,51
Germany = 4,03
UAE: 3,78
Countries with LPI from 3.5 to 5
* Logistics Performance Index; Sources: World Bank, Logistics Performance Index (LPI) 2012, Lufthansa Consulting Analysis
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

8. Kazakhstan and regional competitors - LPI* comparison
In the Logistics Performance Index Kazakhstan ranks 86th, with substantial upgrades needed to improve its transport environment
Kazakhstan and regional competitors - LPI* comparison
Kazakhstan shows substantial improvement potential especially in regards to
general logistics infrastructure,
customs procedures, and
service quality
but also timeliness of shipments in reaching the designed destination
The country is currently targeting to be within the top 40 positions by
LPI Total
3,52
3,51
2,77
2,69
2,61
2,58
Customs
3,25
3,16
2,90
2,24
2,04
Infrastructure
3,61
3,62
2,85
2,60
2,78
2,45
Services
3,46
3,38
2,68
2,67
2,59
Competence
3,47
2,75
2,65
Track & trace
3,54
2,83
2,76
Timeliness
3,80
3,87
2,86
2,73
2,87
3,02
*Logistics Performance Index; Sources: KTZh, World Bank, Logistics Performance Index (LPI) 2012, Lufthansa Consulting Analysis
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

9. Contact Thomas Niehaus Associate Partner Manager for the CIS region
Kopf
Contact
Thomas Niehaus Associate Partner Manager for the CIS region
Lufthansa Consulting GmbH
Von-Gablenz-Straße Cologne Germany
Mob:
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

10. Kopf
Aviation is our business – Lufthansa Consulting provides state-of-the-art aviation and logistics know-how
Lufthansa Airline
Academic Network
Our Client
Lufthansa Technik
Partner- ships
Lufthansa Cargo
Lufthansa Consulting
Institutions
Lufthansa Systems
Agencies
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

11. CIS and Russia are among the most important markets of Lufthansa Consulting's business with each a dedicated regional manager
Lufthansa Consulting markets areas of expertise
Lufthansa Group
Europe
Mediterr. Region
Russia
CIS
Africa North
Africa South
Middle East
Americas
Airline Strategy & Network
Airline Restructuring & Commercial
Airline Operations
Air Cargo
Airports
Strategy
Restructuring
Operations
Infrastructure and Logistics
Development
Economics
Network Management
Commercial
Maintenance & Engineering
Air Cargo Management
Market & Services
Combination of relevant experts for each project
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»

12. Contact Thomas Niehaus Associate Partner Manager for the CIS region
Kopf
Contact
Thomas Niehaus Associate Partner Manager for the CIS region
Lufthansa Consulting GmbH
Von-Gablenz-Straße Cologne Germany
Mob:
II International Transport and Logistics Business Forum «Kazakhstan New Silk Way»