African air cargo faces enormous challenges: Gadhia

Astral Aviation
Sanjeev S Gadhia

Despite the International Air Transport Association‘s (IATA) positive outlook on growth for the continent, Africa continues to face enormous challenges in its air-cargo development strategy, says Sanjeev S Gadhia, board member of The International Air Cargo Association (TIACA).

Highlighting the problem with the continent’s air cargo sector, Gadhia, who is also vice chairman of the African Airlines Association (AFRAA) Cargo Task Force and founder/CEO of Nairobi-based cargo airline, Astral Aviation, said today in a TIACA board update: “It is a sad-reality that only 15 per cent of the air-cargo is carried by African-domiciled carriers.”

This poor showing amongst African cargo carriers is due to a litany of problems he says, including: A lack of liberalisation, restrictions on traffic rights, limited intra-Africa connectivity, lack of co-operation between African airlines, high cost and taxes in fuel and airport services, inadequate infrastructure and lack of capacity building and training.

Gadhia noted that according to IATA, African carriers had the fastest growth in year-on-year freight volumes in June 2017, up 31.6 per cent year-on-year with a capacity increase of 7.6 per cent.

This contributed to freight demand growing 25.9 per cent in the first half of 2017 – the fastest of all regions. Demand has been boosted by very strong growth on the trade lanes to and from Asia which have increased by nearly 60 per cent in the first five months of 2017.

At the same time capacity grew 11.2 per cent in the first half. Seasonally adjusted growth has levelled off in recent months, but growth is set to remain in double digits for the remainder of 2017, Gadhia noted.

“Africa will offer enormous opportunities in air-cargo to serve its middle-class population and its youth,” he said, adding that 60 per of the population is below the age of 30.

“There is hope for Africa with the ratification of the much awaited ‘Single African Air Transport Market’ in January 2018 which will be undertaken by 23 of the 54 African countries,” he said. This initiative will to create a single unified air transport market in Africa, the liberalisation of civil aviation in Africa and as an impetus to the continent’s economic integration agenda.

Other priorities for 2018, according to Gadhia, include a lobbying effort for the reduction of taxes and charges which will generate more demand and connectivity and increase the intra-Africa traffic by 20 per cent by an active participation in AFRAA’s Route Network Co-ordination Project.

“While the benefits of a single unified air-transport market will be enjoyed by African airlines, it is likely that foreign carriers will place more importance in co-operating with African airlines by entering into code-shares and JV agreements,” Gadhia said.

“Foreign airlines who operate into Africa rarely co-operate with local carriers with the exception of interline agreements in the form of SPA’s (Special Pro Rate Agreements).”

This will be a unique opportunity for TIACA and AFRAA to form a joint project which will enable carriers from both associations to enhance their co-operation, Gadhia said.

This will not be without its challenges however, as TIACA secretary general, Vladimir Zubkov recently noted the lack of attention cargo was paid at the 49th Annual General Assembly of AFRAA held just over two-weeks ago in Rwanda

Following that event, Zubkov said: “Air cargo issues virtually were non-existent in the programme or in the statements. Even e-Commerce was reduced basically to the sale of air tickets online and convenience of using smart phones for buying, boarding and using in-flight, where Wi-Fi is available.”

The situation has a glimmer of hope on the horizon, however, with Gadhia heading up the global air cargo organisation and coming from one of the continent’s more successful cargo airlines, Astral Aviation. The signing of a Memorandum of Understanding (MoU) between TIACA and the AFRAA on 14 November with a view to strengthen cooperation will also surely set things on track.

The MoU stated the two organisations’ intention to work together with a view of strengthening cooperation on aviation matters in air cargo and mail safety, security and facilitation; working on replacing paper-based practices with electronic ones, on liberalisation of market access for air cargo services and modernisation of all the processes of air cargo transportation.

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African air cargo faces enormous challenges: Gadhia
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African air cargo faces enormous challenges: Gadhia
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Despite the International Air Transport Association's (IATA) positive outlook on growth for the continent, Africa continues to face enormous challenges in its air-cargo development strategy, says Sanjeev S Gadhia, board member of The International Air Cargo Association (TIACA).
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AsiaCargoBuzz.com
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