Later this month, the fifth general election will be held in Nigeria since the official end of military rule in 1999. For Kenyan cargo airline Astral Aviation, the scheduled March 28 vote will be good news, not only for democracy in Africa, but also for the expected rise in charter shipments of election materials to Nigeria.
According to Astral’s CEO Sanjeev Gadhia, such connections between Kenya and other African nations via African-owned carriers are a welcome development in a region that has been dominated by larger European and Asian airlines. “African countries have started to trade more with each other than before, resulting in an increase of intra-African logistics,” he said.
Now entering its 15th year of operation, Astral uplifts various types of cargo, including oil and gas equipment, telecommunication equipment, aid and relief supplies, mining equipment, and medicines and vaccines. Last year, Astral experienced higher demand for intra-African scheduled service on routes to destinations such as Juba in South Sudan, Pemba in Mozambique, Mwanza and Zanzibar in Tanzania, and Mogadishu in Somalia. “There was also a significant increase in aid and relief cargoes into South Sudan and Central African Republic, in addition to mining equipment into Tanzania, and gas equipment into Mozambique,” he said.
The only downside to 2014, Gadhia said, was an embargo on relief flights from Kenya into the Ebola-stricken countries of Sierra Leone, Guinea and Liberia in West Africa, which arose out of regulatory restrictions. Now that the reports of Ebola cases appear to be on the decline, he said he hopes to be able to resume flights to the region later this year.
In general, Gadhia said, oil, gas and mining equipment – mostly shipped to Nigeria and Angola – are the carrier’s highest-yield businesses, but those shipments are being threatened by the dramatic drop in oil prices in the last nine months. The rise in the election-materials charters to Nigeria this month, he said, will help make up for the expected lower volume of oil and gas exploration equipment shipments.
Another sector of business that is expected to fill the gaps left by oil and gas at Astral is the perishables market from East Africa to Europe. “This year, we expect to see an increase in perishable exports into Europe and an increase in intra-African transit cargoes from our Nairobi hub,” Gadhia said.
The all-cargo carrier currently offers twice-weekly flights from Nairobi’s Jomo Kenyatta International Airport to London Stansted on an ACMI-leased Atlas-operated 747-400F. Last year, the carrier also acquired a 5-tonne-capacity Fokker 27, which complimented Astral’s fleet of DC-9 and 727 freighters.
Plans are also being made to acquire a second 747-400F in the first quarter of 2015 to keep up with demand for increased intra-Africa service, Gadhia said. New markets being considered for scheduled service include Angola, South Africa, Democratic Republic of the Congo, Zambia, the Congo Republic and Zimbabwe, “which will be done cautiously,” he added.
Despite this optimism for 2015, Gadhia says there are many obstacles facing African cargo carriers, such as the lack of airport and cargo infrastructure in certain airports in Africa. Inadequate facilities lead to “higher operating costs, hence there is a need of greater foreign and local investment to upgrade or install modern equipment,” he explained.
Also, the current patchwork of overlapping airfreight regulations imposed by the many countries has created a regulatory framework in which “certain countries are over-regulated while others are under-regulated.” As a result, African governments have tended to favor foreign carriers by granting fifth freedom rights. Today, about 90 percent of the African air cargo market is now dominated by these foreign carriers.
On a positive note, Gadhia added, trade blocks in Africa are becoming stronger. “The possibility of a single trade block in Africa will soon be a reality, which will encourage lower tariffs, greater trade and movement of cargoes within Africa.”
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