Air Cargo Africa: Trade barriers impacting industry on the African continent

posted on 21st February 2019 by Justin Burns

Trade barriers affecting the air cargo industry in Africa were the hot topic at Air Cargo Africa yesterday (20 February) in Johannesburg, reports Chelsea Kerley.

During the session, moderated Chapman Freeborn chief operating officer, by Shahe Ouzounian, panellists discussed air cargo challenges and the prospect of Open Skies on the African continent.

Atlas vice president of sales and marketing in EMEIA, Graham Perkins believes that open skies for Atlas, as a US carrier, is a huge component of successful cargo operations, and without this the company would not see the same growth they have been achieving.

He said: “Not all countries are happy about Open Skies. For us, it is something we hugely support. The concept of borders is not in the minds of young people today—they are much more open.”

Talking about strategies to tackle challenges of cargo going into Africa, Lufthansa Cargo chairman of the executive board and chief executive officer, Peter Gerber said: “We need open skies in order to trade. Europe and Germany are advocates for open skies which is the best thing for everyone to benefit from, but we need a level playing field and we need fair competition.”

He added that the industry must push for liberalisation.

Also on the panel was National president of the Middle East and Pacific Rim, Jacob Matthew. He said: “The US carrier for the Department of Transport has done a fantastic job with Open Skies across the world, basing aircraft in third party countries. I think Open Skies on a whole have evolved, taking us to a new level.”

Group Concorde director, Prithviraj Singh Chug, said Open Skies is a great enabler for the air freight business, enabling more access.

“Fifth and sixth freedom is not a challenge and when we talk about freight operators, they could pull out, which would hurt business. More supply creates more demand,” he added.

Talking about the history of liberalisation, Worldwide Flight Services (WFS) vice president of group commercial cargo, Duncan Watson, said: “Liberal, free trade and anything open, we welcome.

“Look at history in general, the opening of global trade creates jobs and opportunities, expanding the economy. I see a connection between this [expansion] and open skies.”

When Ouzounian asked the panel if they think a developing country should avoid the prospect of a globally open sky, panellists expressed very similar views.

Gerber said the developing world is about fair competition and partners on both sides should see the benefits.

“There is no reason for not being liberal. We must look at what it does to their own industry. I think it is necessary for there to be steps in place to protect this industry,” he said.

“The way forward is liberalisation. History tells us the world will benefit from this, and Africa has huge opportunities,” Gerber added.

Watson said: “This is Africa—almost 60 countries. I think more trade means more tonnage, more business and long term sustainable investment. In the world of charters, into Africa for example, restrictions have held us back. Open Skies will give ease. Progress have been seen but there is more to be made.”

Speaking of African trade, Watson said there is more of an increase than a decrease, despite challenges that the industry faces in the continent.

Matthew added: “We are not scheduled but we do have regular flights to Africa. It is a challenge, but we do see huge improvements. Royalties have reduced, to make it accessible for the majority.

“Look at Ethiopian Airlines—it’s amazing what they have done globally. Within the continent we must evolve to the next level, gain more trust and regular profit.”

He also pointed out the issue of when flowers are flown to Amsterdam from Lagos, there are times when the shipment comes all the way back.

The moderator also took a comment from a conference delegate on the floor regarding the trade access into Africa, who said: “When we look at Africa as a big scale, it scares people. When you try to get over 50 countries to agree and there are so many issues there.”

Moving on to speak about the trade restrictions between China and the US, Perkins said: “From Atlas’ prospective, these are troubling times. Trade issues are looming but we now have a positive lead on trade in the US.”

Watson said: “When traffic came in place, it hurt us and made an impact on cargo going out of China. There are regulations that we need to recognise. If you look at it globally, it hurts all if us, particularly the operator.”

He added that he felt negotiations over the next few days between China and US President Donald Trump will open opportunities.

Ouzounian concluded that global trade does help, encouraging everyone to remember that, if you just look at the possibilities, there are many great prospects throughout Africa.