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African carriers on growth path: Emirates spoils ride

The latest data by the International Air Transport Association (IATA) for the global airfreight markets shows that African carriers registered a year-on-year growth of 15.6 per cent as at December 2017, and a capacity increase of 7.9 per cent. “This contributed to an annual growth in freight demand of 24.8 per cent in 2017— the fastest rate of all regions,” IATA said. This was the second time African airlines have topped the global demand growth chart since 1990. The aviation body said that capacity increased due to demand resulting from a strong growth in Africa-Asia trade, which rose by more than 64 per cent in the first 11 months of 2017. For the cargo carriers, East Africa is one of the most lucrative markets, because it is a major flower-producing region. Kenya and Ethiopia export flowers to the international flower auction in Amsterdam, before distribution to other European countries, and lately the emerging markets of China and Australia.

Ethiopian Airlines continues to dominate the region’s cargo market. It hauls at least 240,000 tonnes annually, compared with Kenya Airways’ (KQ) 58,000 tonnes. Ethiopian, which operates the youngest fleet in Africa from its Addis Ababa hub, boasts eight freighter aircraft — six Boeing B777-200LRFs and two Boeing B757-260Fs, with a cargo capacity of 32 tonnes. The Boeing B777-200LRF boasts a cargo capacity of 103 tonnes. The other major player, South African Airways, transports an annual average of 110,000 tonnes. In the region, it operates cargo sub-hubs at the Jomo Kenyatta International Airport and Entebbe. SAA also has three dedicated Boeing B737-300(F)s for its cargo services, but it also uses its belly carriages on its daily flights to these two destinations and Dar es Salaam to move cargo.

Emirates spoil

But, even as the African freighters celebrate the improved performance in 2017, Middle Eastern carrier Emirates flew in to spoil the party, transporting more than 46,500 tonnes of flowers from Kenya alone in 2017. The entry of Emirates in the cargo business consequently tightened the competition in the segment, with KQ saying that its total cargo haulage for 2017 declined 14.5 per cent to 51,668 tonnes, from 60,457 tonnes in 2016. The airline earned $71.6 million from freight revenue. “The reduction in capacity was driven by the cut in the number of wide-body aircraft in operation. Capacity shrink and deployment of narrow bodies to cargo rich destinations contributed to the decline in volume,” said the airline’s chief executive Sebastian Mikosz.

Kenya Airways also admitted that the African market, which recorded the largest year-on-year capacity growth of 25.5 per cent on the back of long-haul expansion of other airlines, also led to stiff competition. KQ is now banking on the positive developments in new market segments, notably the flower traffic to Australia and China, and the development of pharma cargo, to increase its volumes. But the region’s airlines are gradually losing their competitive advantage to the Middle Eastern aviation players.

Emirates carried more than 46,500 tonnes of cargo comprising mainly roses and carnations. Khalid Mohd Al Hinai, the airline’s Africa vice-president for cargo, told The EastAfrican that it has made good inroads in the segment. “Our daily freighters travel from Nairobi to Amsterdam to transport flowers to the Aalsmeer auction. We also transport flowers from Uganda and Ethiopia on our passenger flights,” said Mr Al Hinai. He said the increase in cargo volumes from Nairobi was achieved through increased capacity in the passenger aircraft, which carry cargo in the belly, and freight aircraft.

Emirates SkyCargo operates scheduled freighter services from Addis Ababa, Djibouti, Eldoret, Lilongwe and Nairobi. Nairobi has a dedicated daily freighter flights to transport flower exports from the region, on Boeing 777 freighters that can carry up to 100 tonnes. “We also saw a rise last year, in the exports of other perishables such as fresh vegetables, fruits, meat and fish from the region. For example there is a large quantity of green beans that travels from Kenya to the Middle East and Europe on our passenger aircraft. We have also seen large quantities of fish exported from Uganda and meat from Tanzania,” said Mr Al Hinai. The airline is, therefore, also exploring other growth areas, especially seafood exports, Mr Al Hinai revealed. “We have seen growth of up to 20 per cent in the past five years for seafood to the Far East. We have seen growth in the volumes of flowers and other perishables as well,” he said.

Kenya says it is also enhancing its export and import handling capacity by 10,000 square metres, pushing the number of transit sheds to six. The move has been triggered by the rising competition for cargo amid a rise in horticultural exports. The new transit shed, according to Kenya Airports Authority (KAA), will include coldrooms for the preservation of flowers and vegetables, an export area to receive and prepare cargo for loading, an import area and a dry cargo area. “There are only five transit sheds at the JKIA deal with cargo. The additional facility should be ready in the next four months, which will allow us extra capacity of our uplifts for cargo facilitation,” said KAA commercial cargo manager Evans Michoma. Currently, the handling capacity at JKIA stands at one million tonnes annually, but upon completion of this expansion it is expected to increase by 150,000 tonnes annually.  Click here