In September, the latest available figures from IATA, Africa posted year-on-year growth of just 0.1%, down from 2% seen in August. Apart from Latin America, which is posting double-digit recovery as airlines come out of bankruptcy, Africa is the only region not posting negative year-on-year results, but it only has a world share of 1.9%.
Ethiopian Cargo & Logistics Services, the cargo division of Ethiopian Airlines, is a key player connecting Africa with the world.
Managing Director Abel Alemu says the division has been coping well while the world faces the challenges of the Russia-Ukraine war, lockdowns in China, and the modal shift back to sea freight.
The outlook going into 2023 is positive, with Alemu saying, “We expect an increase in demand which we are planning to accommodate with the reviving passenger belly capacity on top of the dedicated freighters and P2Fs.”
The challenges of the pandemic created opportunities, which Ethiopian was able to exploit. Alemu says, “Ethiopian Cargo is led by a vision and detailed strategies, but when there are unprecedented conditions like Covid-19 there is a demand for emergent strategy to support the change in the macro/micro economic environment. Ethiopian had been swift in understanding and reacting to the market environment and demand at the time.”
During the pandemic, cargo was the focus, so seats were removed from B777, B787, A350 and Q400s to provide cargo capacity. With passenger traffic returning, more than half of the aircraft converted for cargo operations have returned to passenger service.
Alemu says, “Ethiopian Cargo will pursue its vision through cost leadership with slight differentiation, keeping the functional airspace blocking, on time performance of flights and grow its network further through its hub and direct point to point operations.”
Ethiopian played a key role in combatting the pandemic, using its Pharma Wing facility and modern fleet to transport medical equipment and PPE across the globe.
Alemu says, “Ethiopian transported one billion doses of vaccine to over 30 countries across the globe and became the only African carrier to reach such a milestone playing a crucial role during such difficult time.”
In Africa, air cargo faces several challenges, with Alemu listing low connectivity between African countries, limited intra-African trade due to the similarity of their produce, high fuel prices and fuel shortages, and weak economies and currencies.
There are big opportunities and major players are focusing on the African market as countries upgrade their infrastructure and systems to make themselves more attractive business destinations.
The prospects for e-commerce are good, with several start-ups in Africa focusing on this area, but infrastructure, logistics and financial challenges need to be overcome.
Alemu says, “Working on its part, Ethiopian is developing its own dedicated e-commerce hub at Addis Ababa airport with a capacity of 150,000 tons per annum with a huge investment of $50 million covering a 15,000sqm area.”
Expanded footprint
By combining Menzies Aviation and National Aviation Services (NAS), the combined company is the largest aviation services provider in Africa, positioning it to grow at an accelerated rate, says Charles Wyley, Executive Vice President MEAA at Menzies Aviation.
The takeover by Agility to combine Menzies and NAS means, operating under the Menzies Aviation brand, the combined company provides air cargo, fuel and ground services at more than 250 airports in 58 countries.
Wyley says, “As a combined company, we have the resources to provide innovative solutions for growing and forward-thinking customers, and to develop our talent, technology, and sustainability. It also means we are well positioned to support our customers in tackling supply chain challenges and labour shortages currently impacting the entire aviation industry.”
Providing cargo services at 15 airports, Menzies Aviation handles around 220,000 tonnes a year. Wyley says, “We continue to target growth opportunities in the region, as it remains one of the fastest growing globally with high demand for passenger and cargo needs.”
As 2022 comes to an end, recovery in the region has been slower than expected, says Wyley.
Airline schedules have improved but this has been offset by late flight cancellations due to low passenger numbers.
Cargo volumes are on the up but are not at pre-pandemic levels, with the war in Ukraine having an impact.
Wyley says, “Longer-term, Africa is still one of the fastest growing regions worldwide, with high demands for passenger and cargo needs. There are plenty of opportunities to accelerate our growth in the region and we are working on new business opportunities as we speak, while also providing the highest quality service to our current customers.”
The future of Africa’s air cargo market will depend on political stability, because stability makes investments more attractive.
Wyley adds, “We have seen over the past few years that the Middle Eastern carriers are expanding their networks into the African region, and we are working with several of these carriers on how we can jointly expand our network along with theirs. Partnerships will become the future of handling in the aviation sector over the forthcoming years and Menzies Aviation is geared up for this development.”
This article was published in the December 2022 issue of Air Logistics International, click here to read the digital edition and click here to subscribe.