Astral Aviation’s CEO Sanjeev Gadhia, says African airlines must invest in cargo operations to complement growing passenger demand.
- The year 2020 marks your 20-year anniversary in operation. Looking back, how has been your journey? Challenges, opportunities?
The journey has been memorable with a number of challenges and opportunities. The challenges we faced were relating to the regulatory framework in the aviation sector in Africa.
These comprise of lack of liberalization. African cargo sector is not fully liberalized. For years we had to lobby for the revision of out-dated BASA’s in order to get traffic rights on a number of intra-Africa routes, in addition to that most markets have protectionism frameworks on the ground.
Infrastructure remains a challenge in Africa and not every airport you operate to have the required facilities for cargo service. Like some markets around the world, taxes, fuel and handling charges continue to be a threat for sustainable operations. The aging freighter fleet across the continent reduces efficiencies for cargo airlines; this is something that much change. The industry has a high presence of aged Russian made aircraft.
The opportunities of air-cargo in Africa are immense due to the lack of connectivity within Africa. We have come across a number of opportunities for air-cargo over that past two decades.
The industry has vast potential and we have seen it in the agricultural (flowers and vegetables), energy and humanitarian relief sectors. Due to the instability in some regions in Africa we have been experiencing demand in Peacekeeping and UN cargoes.
E-Commerce cargo fueled by mobile phones and technology has opened up the industry to new possibilities. Now customers can track progress of their cargo from dispatch to delivery and making our service delivery modern and of a world standard.
What has been your biggest milestone as Astral Aviation over this period?
We have had a number of milestones in our history. The Strategic co-operation with 25 Global & African Airlines which allows us to carry cargoes from anywhere in the world to Africa due to our interline co-operation with foreign and local airlines. This has greatly expanded our reach.
We operate a diverse fleet of 15 aircraft with up-light capacities from 6 to 110 tonnes with a sustainable network of 15 scheduled and 50 charter destinations. We are one of the few carriers that operate into high-risk regions safely such as Somalia, South Sudan and Yemen. To date, we have performed over 300 flights into Yemen.
- Are you satisfied with Astral Aviation’s performance?
- You operate a mixed fleet with capabilities of 6 to 110 tonnes. What sort of competitive advantage does this give the airline?
No other airline has a mixed fleet compared to Astral as we are able to offer different size of aircraft for our clients` requirements, as our experience tells us that one size will not work in Africa. Hence, we can offer a tailor-made solution for our client’s requirements ranging from 6, 7, 8, 14, 22, 42 and 110 tons respectively on the Fokker 27, Fokker 50, BAE ATP, DC9F, B727F & B747F
- During the COVID 19 pandemic, we witnessed an increase in demand for air cargo. How do you see the African cargo operations in the next 5 years? Are there potential hurdles in sight?
Increase in demand during COVID-19 was as a result of the importation of PPE’s, Test Kits and Ventilators from China to Africa along with the exports of fresh fruits and vegetables from Africa to Europe, however the air-cargo operations will slow down due to the global recession in 2020/1 and will be able to gain momentum from 2021 onwards with the expectation that there will be an increase in regional and intra-African trade following the ratification of the African Continental Free Trade Area.
- Medical cargo recorded the highest demand during this period. What other cargo grew in demand?
In addition to medical cargo, there was a notable increase in demand for Perishables from Africa such as Fresh Fruits, Vegetables, Seafood, Meat and Flowers.
- According to your website, you have 18 different interline agreements. Did these make any difference during the COVID19 pandemic?
Sadly, the interline agreements were suspended by the foreign carriers during the pandemic, but we maintained our interline agreements to our interline partners, and continue to accept interline cargoes during the pandemic.
- Is African air cargo adapting to the requirements of perishable and pharma-cargo?
Indeed, with Ethiopian Airlines Cargo, Astral Aviation, Kenya Airways Cargo, South African Airways Cargo, Egypt Air Cargo and RwandAir leading the way.
- Are African airports adequately equipped for cargo operations or more has to be done?
There are many secondary airports in Africa which lack the infrastructure to support cargo operations which results in bottlenecks and delays. We have lobbied for private sector participation in the form of PPP’s as this will enable significant investment in the air-cargo sector in Africa.
- In this digital era, how best can the African industry implement e-cargo or smart logistic?
Digitalisation is an important part of the aviation sector and more needs to be done in e-cargo in Africa. Pace of digitalization is slow with only a few airlines who have adapted a digital strategy.
- Security is a key fundamental in aviation. How best can cargo security be improved in Africa?
Cargo security continues to be a problem in Africa with many weaknesses along the supply-chain. There is a lack of security which affects the credibility of the continent in attracting high-value cargoes, as there has been a number of incidents which have not been prosecuted due to the weak judicial sector in various parts of the continent.
- How do you attract staff to Air cargo as compared to passenger travel?
Air cargo sector has had a problem in attracting employment as most employees prefer a carrier in the passenger sector. However, there is a shift following the collapse of the passenger airlines during the pandemic, that we will see new blood coming to join the air-cargo sector which offers a sustainable tenure.
- What is your overall outlook for the African air cargo industry?
The air-cargo sector has been neglected by the aviation community due to the lack of investment appetite in this sector. African airlines need to invest more in cargo aircraft to complement their passenger network.
IATA’s outlook for Africa is -0.4% in 2020 (Global -4.7% / Based on RPK) and $29b loss for the Global Passenger airlines (-0.04 for Africa). 2020 will be a tough year for the Air Cargo Industry in Africa due to COVID-19 (Corona Virus).
In addition, due to massive cancellation in flights and shipping originating from China in Q1/2020, African Airlines will face significant losses despite a potential rise in yields once the flights resume.
Global warming and climate change have caused adverse weather conditions in East Africa that have affected the yield of perishables and their exports. We saw this during the Valentines period when farmers produced limited output.
On a positive note, the increase in Intra-African trade will result in improved connectivity and capacity for air-cargo which is projected to grow at 15% in 2020.
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