Investment ‘carrots’ will address empty leg syndrome

KEVIN MAYHEW THE DEVELOPMENT of airfreight services into Africa will play an important role in the general economic growth of the continent but it will require certain individual countries to look hard at restrictive air freedom rights and restrictive general trade regimes that discourage investors, according to SAA vice-president cargo, Patrick Dlamini. He says that these challenges must be met to overcome other major drawbacks for profitable airfreight operations within many areas of Africa – one-directional cargo and trade, dumping of capacity by European airlines and reliance on belly space. That said, Dlamini believes that cargo is a lucrative and highly competitive business that has played a major role in East Africa and some southern African countries’ development as governments have realised its potential to drive growth. “We fly out of South Africa full to African markets in which we operate. Most of the time we fly back empty or with very little cargo, which of course impacts negatively on profitability,” he said. The solution is to employ investment regimes that make it attractive for investors to beneficiate in these countries and so manufacture export items to fill the empty space. “SAA has effectively placed itself at the forefront of linking Africa with international markets using airfreight,” he said. “Achieving the maximum benefit from this can only be achieved if countries show some unity of purpose with aligned airline policies that will be favourable for the continent’s airlines to operate like those of Asian and European countries.” The South African carrier is aiming for growth in its cargo business that will exceed the 5-7% worldwide growth expected in the next five years. “We cannot grow by using belly space in our Airbus aircraft which service African destinations. At present we have four dedicated freighters that operate domestically and regionally to Luanda, Harare and Blantyre. Our focus to 2010 is to acquire more freighters which can help us to grow our business in the next five years.” He added that SAA Cargo understood the need to establish hubs at strategic regions in order to sell full networks into and out of Africa to Europe, Asia and the Americas.