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Cargo

Growing business

Ethiopian Airlines is about to activate its second cargo terminal at Bole International Airport, its operating headquarters. Ian Harbison was invited to Addis Ababa for an exclusive tour
 

This huge 40,000m² facility was inaugurated on 29 June, during the Second ICAO Meeting on Air Cargo Development in Africa. Although it is still in final fit out, it should become fully operational around September. While the original cargo terminal has a capacity of 350,000 tons per year, the new one has a capacity of 600,000 tons per year, making it the largest and most modern on the continent. With over 350,000 tons annual uplift expected in 2017, it is clear that the expanded capacity has arrived just in time.


Fitsum Abady, Managing Director Ethiopian Cargo & Logistics Services, says the size reflects the ambitions of both the airline and the country. Currently, exports are dominated by perishables, which account for over 80% of traffic, and is why almost half of the new facility is given over to cooled space, with adjustable, compartmentalised cooled rooms to suit the requirements of every temperature-sensitive shipment. These perishables are predominantly flowers, followed by vegetables, fruits, herbs, meats and pharmaceuticals. The airline is working on CEIV certification in line with the pharma and life science freight business. As the government’s industrialisation programme kicks in, the inauguration of this state-of-the-art cargo terminal will contribute to the growth in the amount of dry goods that they deliver.

 

The programme involves the establishment of Industrial Parks in various parts of the country as part of a drive to create jobs in the labour-intensive and export-oriented light manufacturing industries, such as textiles and clothing production, pharmaceuticals and value-added agricultural products. To date, four have been opened – Kombolcha (250km northeast of Addis Ababa), Hawassa (275km south), Mekelle (500km northeast) and Bole Lemi in Addis Ababa itself. All are located close to airports on the Ethiopian Airlines domestic network, with Hawassa having a brand new airport which opened in 2016. The parks have attracted inward investment. In Mekelle, DBL Group, a Bangladesh-based exporter of ready-made garments, will be the sole owner of a textile factory, supported by a loan from Swedfund, the Swedish state organisation that invests in emerging markets, backed by a long-term buying commitment from Swedish fashion chain H&M. Meanwhile, a shirt factory in Hawassa is a joint venture with PVH Corp., which owns the Calvin Klein and Tommy Hilfiger brands.

 

For inbound traffic, imports account for only 30%, with the vast majority of freight being in transit. This is a reflection of the airline’s extremely successful policy of developing Addis Ababa as a transfer hub for passengers, along the lines of Abu Dhabi, Doha and Dubai. However, Ethiopian Cargo also maintains secondary hubs at Brussels and Liège. This is part of a strategy to build a network that sees flights leaving from Addis Ababa and heading to Europe, and from there on to Asia. Of the 21 weekly flights that transit Belgium, 16 are for China and Hong Kong, three to the Middle East and two to South Africa. The return path is from Asia direct to Addis Ababa.

 

The last leg is of growing importance due to the huge amount of Chinese investment that is taking place throughout Africa and, once again, the company has a competitive advantage due to its extensive network across the continent, which accounts for 25 of the 39 destinations (see Table 1). This also applies to outbound freight to Asia, where its regional freighter operations feed the Addis hub for onward passage. Abady notes that much of this market is generated by traders, as well as global forwarders or shippers. In addition, the airline has an agreement with ASKY in Togo and Malawi Airlines with a multihubbing strategy, and is looking to expand these relationships in other countries, further extending the reach of its cargo operations.

 

In total, Ethiopian Cargo & Logistics Services has a daily capacity of over 800 tons, in and out, on the passenger and freighter fleet through Addis Ababa, despite the large amount of luggage that most passengers carry. One disadvantage is the airfield’s elevation at Addis Ababa Airport, around 2,330m, which has a negative effect on aircraft performance and results in payload being typically reduced by around 10 tonnes as it is traded for range. In this context, Abady concurs with Group Chief Executive Officer Tewolde GebreMariam (see box story) that the new Airbus A350-900 is a 'cargo-friendly aircraft', as it offers over 25 tonnes of belly freight – even with the operational constraints. This puts it between the Boeing 777-200 (20 tonnes) and 777-300 (30-35 tonnes). The 787 has not lived up to expectations, however, at just 10-15 tonnes.

 

For pure freighters, the current fleet consists of six Boeing 777-200LRF and two 757-260F freighters. At the 2017 Paris Air Show, it ordered two more 777-200LRFs. However, the airline’s Vision 2025 development plan calls for a total fleet of 19 aircraft. This will be achieved through orders for a further two 777s, the retirement of the 757s, and the addition of four 737-800s and four 767-300s. Although the latter two types are in passenger service with the airline and are due to be replaced, he says the new aircraft will be Boeing Converted Freighters from other sources. Two 767s are expected by the end of this year – and the first 737 is expected in mid-2018. >>


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