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Perishables push

Perishables growth calls for more cold chain investment in Africa. Ian Putzger reports

T he African market is beckoning for Cargolux. The European all-cargo airline has signalled a desire to step up its presence on the continent and has announced plans to add several new destinations to its network there. The list of possible markets under the microscope includes Ethiopia, Uganda, Mozambique, Zambia and Zimbabwe.


CargoLogicAir, the UK-based offshoot of AirBridgeCargo Airlines, has moved in the opposite direction. Last November it pulled out of the African market, ending its B747F run from London to Libreville, Johannesburg and Nairobi, shifting the aircraft to more promising markets elsewhere. The end for the carrier’s first route came after little over half a year, after load factors had sunk below the 30% mark, according to one report.


Other operators have also scaled back. Air France-KLM Martinair Cargo cut its freighter capacity in Africa by 30%, a step that helped stabilise its load factors and yields, says Noud Duyzings, the company’s Director, Eastern & Southern Africa. Panalpina – which has been using dedicated freighter capacity to the continent for years under the ‘African Star’ moniker to supplement commercial lift – has adjusted to demand by using different aircraft and partners, reports Slavey Djahov, Regional Head of Air Freight, MEAC.


In recent years capacity poured into the region, led by rapid expansion of the Middle Eastern carriers’ passenger and freighter activities in Africa. In addition, several African carriers have brought in new aircraft with greater cargo capacity, notably Ethiopian Airlines, which embarked on an expansion programme for its long haul activities. According to IATA, in 4Q16 international capacity was 26.4% higher than a year earlier. This has led to a glut in lift, which is reflected in carrier results. IATA statistics show a 5% decline in load factors for African airlines.


Nobody is scrambling to find lift in this market: “Capacity is ample now,” remarks Djahov.


Exacerbating the situation for airlines, demand has not kept up with this growth. Rather the contrary: flows to South Africa, the continent’s largest market, were down last year, which operators have attributed to the political instability in the country. Johannesburg’s OR Tambo International airport, the country’s main gateway, clocked up a throughput of about 318,500 tonnes last year, a 10% decline.


Consumer goods have kept flowing into Africa, but the weakness in the oil and gas sector – historically a major engine of air freight traffic to the continent – has been an important factor for the sluggish inbound momentum. This has soured airlines’ optimism on growth in Africa. Djahov notes that inbound demand is important in order to make the economics of operating freighters into Africa work. “It’s tough to fly a plane there if there is not enough southbound traffic,” he says.


Like other observers, he does not expect the oil and gas sector to stage a strong recovery any time soon, but he remains optimistic about other commodities going into Africa. “There is always demand for new phones or pharmaceuticals. We see that steadily continuing,” he comments.


Duyzings reports that, while the southbound sector last year produced deterioration in both volume and yield (especially in the latter), African exports by air to other parts of the world increased, although outbound yields were still in decline. >>

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