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Sanjeev Gadhia Spreading the Load – Cargo Market Potential for African Freight Sanjeev S Gadhia Vice Chairman, TIACA Vice Chairman – AFRAA Cargo Committee Founder & CEO – Astral Aviation www.tiaca.org – Representing all parts of the supply chain TIACA The International Air Cargo Association n International not-for-profit association representing all parts of the air cargo industry (traditional players and new entrants, small, medium and large companies) n Shippers n Forwarders 2020 focus n GSSAs n Airports n Airlines n Ground handlers n Cargo drones • Maintain high quality and n Manufacturers Member satisfaction n IT solution providers • Have TIACA Ambassadors in n Educational institutions all regions n Consulting firms • Get closer to our members by organizing regular Meetups www.tiaca.org – Representing all parts of the supply chain • Attract new entrants: start-ups, cargo drones, etc. TIACA’s mission n Set the vision for air cargo industry n Educate its Members and the air cargo industry n Support or lead, as appropriate, necessary change in the air cargo industry n Unite the industry with one voice on common interests n Promote and encourage innovation www.tiaca.org – Representing all parts of the supply chain TIACA’s strategic focus Partnership Training Sustainability Networking Outreach www.tiaca.org – Representing all parts of the supply chain Partnership: stronger together is TIACA’s philosophy 2020 focus • Strengthen our existing partnership with ICAO, IATA, ACI • Develop new partnership at regional levels and in specific areas: Sustainability, www.tiaca.org – Representing all parts of the supply chain Unmanned Aviation, e- Commerce, ULD Sustainability: set-up the urgency and accelerate progress through innovation and collaboration n 3+2: people, planet, prosperity + innovation & partnerships n New program launched in 2019 to drive sustainability goals within the air cargo industry n 1st Sustainability Award at the last TIACA Executive Summit in Nov 2019 2020 focus n 5 Strategic Partners funding the initiative: we need more! • Launch the 1st Air Cargo Industry Sustainability Survey • Build relevant partnerships • Unite the industry towards one common vision for sustainable air cargo www.tiaca.org – Representing all parts of the supply chain • Reward sustainable practices with the 2nd Award AFRAA & CARGO Established in September 2016 in Nairobi, Kenya with members from AFRAA which are -Air Algeria; Air Zimbabwe; Astral Aviation (Vice Chairman); Champ Cargo Systems (Industry Partner); Express Airlines; Egypt Air (Chairman); Ethiopian Airlines; Kenya Airways; Libyan Airlines; Royal Air Maroc; Rwandair; Safe Air; South African Airlines; South African Express & Tunisair Ø 7TH AFRAA Cargo Task Force Meeting, Cairo, 7-8 October 2019 Ø MoU with TIACA (The International Air Cargo Association) Air cargo and mail security and facilitation; replacing paper-based practices with electronic ones; environmental practices; liberalization of market access for air cargo services; air cargo safety; and modernization of all the processes of air cargo transportation. Ø Network Coordination Meetings between AFRAA Member Airlines www.tiaca.org – Representing all parts of the supply chain ASTRAL AVIATION n All-Cargo Airline which is based at JKIA, Nairobi and operational for 20 years. n 2019 Data > 75,815 Tons / 3,093 Flights n SCHEDULED FREIGHTER EX NAIROBI v Europe > London & Liege, Belgium v Intra-Africa > Tanzania, Mozambique, Somalia, South Sudan, Djibouti, DRC. n Fleet is B747-400F (110t); B727-200F, DC9F, F27 + FlyOx (Cargo Drone) n Co-operates with 20 Airlines including 5 African Airlines on Cargo. n Proud Member of AFRAA & TIACA n Voted Best Cargo Carrier in Africa from 2011 - 2019 www.tiaca.org – Representing all parts of the supply chain KEY STATISTICS – AFRICA AIR CARGO n AFRICA’s Share of Air Cargo is 1.8% of Global FTK (Source: IATA) n AFRICA’s Growth in Air Cargo is the highest in the world (Source: IATA) n FTK 7.7% n AFTK 13.8% n Key Trade Lanes n China – Africa n Europe – Africa n Intra – Africa n TOP African Airports (Source: ACI / As at Nov 2019) n Nairobi 364 Tons n Johannesburg 345 Tons n Cairo 337 Tons n Addis Ababa 273 Tons n Lagos 188 Tons www.tiaca.org – Representing all parts of the supply chain 2020 Outlook n 2020 will be a TOUGH year for the Air Cargo Industry in Africa due to : n COVID-19 (Corona Virus) n Bad Weather in Eastern Africa. n 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) n 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. n Due to the adverse weather conditions in Eastern Africa in Q4/2019 and Q1/2020, Perishable EXports during the Valentines Period were affected due to limited output from the farms. n 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. www.tiaca.org – Representing all parts of the supply chain AIR CARGO IN AFRICA www.tiaca.org – Representing all parts of the supply chain AIR CARGO IN AFRICA www.tiaca.org – Representing all parts of the supply chain 5 KEY FACTS – AIR CARGO IN AFRICA Ø HIGH COST Ø Jet Fuel, Cargo Handling, Freight Tax and Royalties. Ø REGULATIONS Ø Lack of Liberalization, Restrictions on Traffic Rights, Protectionism. Ø Favouritism for Foreign Carriers Vs African Carriers. Ø CONNECTIVITY Ø Lack of Intra-African Connectivity results in air-cargoes being routed via Middle East and Europe. Ø Lack of Co-operation between African Airlines hampers connectivity. Ø INFRASTRUCTURE Ø Lack of Basic infrastructure, Terminals, Parking & Capacity for Aircargo Ø Encourage Private sector investments Via PPP Framework Ø FOREIGN CARRIERS Ø Lack of Co-operation with African carriers. Ø Dominates 85% of Cargo and 80% of Passenger Traffic Ø Granted 5th Freedom Rights in several Key Routes www.tiaca.org – Representing all parts of the supply chain 5 PRIORITIES – AIR CARGO IN AFRICA Ø LIBERALIZATION of air cargo operations should be promoted through removal of restrictions on traffic rights and limitations on capacity in air service agreements. SAATM needs to be implemented !!! Ø HIGH TAXES, charges, royalties and levies on aviation should be assessed and disclosed; and action taken to limit their adverse impact on the growth and development of air cargo services. Ø African Airlines need to make genuine efforts to increase the levels of CO-OPERATION in Air cargo with greater interline, SPA, Code-share, JV and Reciprocal GHA’s between themselves Ø Importance of INFRASTRUCTURE to support continued development of airports and intermodal transportation infrastructure to meet the demand for air cargo including PPP & JV’s Ø AFRICAN CONTINENTAL FREE TRADE AREA (AfCFTA) implementation in July 2020 will result in increase in intra-African trade which will enhance regional connectivity www.tiaca.org – Representing all parts of the supply chain CONCLUSION v Aviation has the potential to make an important contribution to economic growth and development within Africa. v LIBERALIZATION brings benefits to consumers and airlines, and results in lower tariffs and better connectivity, which in turn stimulates new and additional traffic volumes, trade and investment, which propels economic growth and increase in employment. v If African nations and airlines don’t fully embrace the SAATM for the benefit of Africa, then the continent, its people and its airlines are unlikely to reach their full potential. v With the implementation of SAATM, intra-African connectivity will develop and there will be more growth opportunities for African airlines. As a result, aviation’s role as an economic driver will grow significantly. v SAATM & AfCFTA are excellent initiatives by AU, which need to be supported with the view of implementation within the prescribed time-lines. www.tiaca.org – Representing all parts of the supply chain Join us! What’s in it for you? nJoin the association now nGrow your network anD business nJoin the Sustainability Program nLearn, get inspired n st Register to the 1 Airports4Cargo nShare, increase your visibility Conference in Brussels, 24 – 25 June and reach 2020 nInfluence, be hearD nSave the Date for the Air Cargo Forum in Miami, 10 – 12 November 2020 nHave fun! nSubscribe to our publications anD social meDia channels www.tiaca.org – Representing all parts of the supply chain TIACA’s vision for air cargo is a safe, profitable and united air cargo industry that embracesTIACA’s modern vision technologies and practices to sustainably serve global trade and social development worldwide. www.tiaca.org – Representing all parts of the supply chain.
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