Will more airlines move to all-in rate?

A major challenge facing the airfreight sector is how different airlines will adapt to the move by Emirates to switch to an all-in rate and put an end to surcharges being billed separately. Stephen Bishop, airfreight general manager of neutral groupage operator CFR Freight, said that while Emirates was the first airline to announce in January that it would go this route, a few had already followed the lead in their own way. “It will be interesting to see which airlines adjust their rates in line with high increases or decreases in the oil price as this affects the overall competitiveness of the carriers and value for money for the consumer,” he said. Bishop said aircraft capacity was another major challenge as aircraft were re-routed to more profitable passenger lanes as cargo was not a high priority for carriers. “Margins are a concern, with consumers at all levels always looking for cost savings, and this ultimately gets to a point where a route or yield is no longer viable for a carrier and they walk away from business. This decreases capacity, increases demand and then increases the prices once again,” he said. However, he added that a few airlines had increased capacity on some routes recently, which had created competition. Bishop said West and East Africa were the company’s two top routes for general cargo (genco) and cross-trades, a trend that was expected to continue in 2015. “Africa as an emerging market has huge potential as both consumers and producers of goods. Since the industry is driven by passengers, as the economies grow in Africa so will the demand for goods,” he said. “We have also seen more international carriers setting up routings into Africa and hopefully this trend will continue to increase capacity and competition.” Bishop said the company, which has project specialists that can assist with ‘out-ofgauge’ and abnormal requests, had seen an increase in requests for project cargo. “We have also noted an increase in cross-trade requests, particularly from the US and China into Central and Western Africa,” he said. “There has been consistent growth across the continent with a few more requests coming from North Africa. “The main centres in Kenya, Nigeria, Zambia, Tanzania, Ghana, Zimbabwe and Mozambique will continue to be strong destinations in the year ahead.” Bishop said the business had relaunched all of its export products across SA to improve competitiveness and ensure a typical “McDonald’s” franchise experience – wherever a client was situated he would benefit from the same products and services. “We are constantly growing our number of territories where we have agents on the ground in Africa and we will continue to do so in 2015.” INSERT & CAPTION We have seen more international carriers setting up routings into Africa and that will increase capacity and competition. – Stephen Bishop