By Roland Ohaeri
Kenya Airways’ Hazel Wachira, an Aeronautical Development Engineer and UAS (Drone) Instructor Operator, led a project that converted two Kenya Airways Dreamliner jets to cargo aircraft when COVID-19 pandemic grounded passenger planes, which was the first in the world. This feat,”completed in a record time of 3 months,”did not just contribute to address the shortage of efficient cargo aircraft in Africa, but demonstrates Africa’s readiness using its internal capabilities to improve the continent’s air cargo fleet by way of aircraft conversion. Allan Kilavuka, Group CEO of Kenya Airways, sees the accomplishment as a strategic step towards sustainable development.
Notably also, Allied Air, West and Central Africa’s largest cargo airline, took delivery of its converted 737-800 Converted Freighter early 2021. The aircraft has been instrumental in the distribution of COVID-19 vaccines in Nigeria, and adds to the cargo aircraft fleet improvement in Nigeria and the region. According to Capt. Val Tongo, CEO of Allied Air, the aircraft is part of Allied Air’s focused fleet upgrade programme.
In 2021, Israel Aerospace Industries (IAI) Aviation Group inked a deal with Ethiopian Airlines to set up a conversion site for Boeing 767-300 passenger aircraft. This will be sited at the Ethiopian Airlines Maintenance centre in Addis Ababa, and the biggest in Africa, to serve the rising need for converted cargo aircraft in Africa. Ethiopian Airlines in itself resorted to converting some of its passenger aircraft to cargo to meet the demand for cargo. The conversion appears the shorter and easier way to access more efficient cargo aircraft.And in the second quarter of 2022, Nairobi-based Astral Aviation is expected to become the launch customer of the A320 converted passenger-to-freight aircraft. Air Zimbabwe is also said to be looking at converted B777 freighters.
Africa’s Cargo Aircraft Gap
Before the COVID-19 struck in 2020, Africa held – and still holds – a paltry 2% of world’s air cargo traffic. Even as recovery inches up slowly now, the same cargo airlines including Allied Air, Ethiopian Cargo, Kenya Airways Cargo, Astral Aviation, and few others, are building up improved fleet on the continent. Several other adhoc cargo operators in Africa have been largely associated with old inefficient aircraft. This creates the need for setting up efficient dedicated cargo airlines in Africa.
This also strengthens the conviction that the conversion of passenger-to-cargo aircraft programmes, which most if not all aircraft manufacturers have embraced, would continue to buck the trend for African airlines in the struggle for more efficient cargo aircraft fleet amidst expected rise in demand across Africa.
New Market Dynamics Drive Cargo Demand
After the decline of cargo traffic among African airlines, which “moved 960 thousand tonnes of cargo in 2020, representing a drop of 3.3% compared to 2019,” there has been growth so far with more projected for the Africa region says Abderahmane Berthe, Secretary General of African Airlines Association (AFRAA).
Particularly, the build-up of new businesses, as well as the intra-Africa trade and investment policies to drive the achievement of the global Sustainable Development Goals (SDGs) 2030 and the African Union’s Agenda2063 create new demand for more efficient cargo aircraft in Africa.
Of note is the fact that e-commerce is rising fast in Africa, as the continent’s predominantly young population has made e-commerce a big business in Africa. Already, some airports and airlines in Africa are re-aligning with the fast emerging e-commerce evolution. According to Airbus also: “Cargo demand, boosted by e-commerce, is driven by an expected growth in express freight of 4.7% per year and a general cargo (representing about 75% of the market) growth of 2.7%. Overall, over the next 20 years there will be a need for some 2,440 freighters, of which 880 will be new-build.” These also include freighters for Africa.
Mr. Tewold Gebremariam, immediate-past CEO of Ethiopian Airlines, says: “We have also started the construction of the largest E-commerce Hub Terminal in Africa.”Signifying the essence of improved cargo fleet in Africa, he says “We are increasing our dedicated freighter fleet with the latest technology, fuel efficient and environment-friendly airplanes of the 21st century.”
Emphasising on Africa’s market potential is a major factor for improved and increased air cargo fleet among African airlines, ACI-Africa states: “It is estimated that the untapped intra-Africa potential sits at $48bn, and if exploited could increase intra continental trade by 20%, to more than $210bn. Under a free trade agreement, using the proven international competitiveness standards, Southern and Northern Africa are the regions holding the most potential for intra Africa trade. With $33bn (69%) worth of potential awaiting exploitation due to liberalization in Africa, Southern and Northern regions anchored by their most industrialised countries of South Africa and Egypt are ripe for cargo and air freighter unlocking.”
ACI-Africa also explains that “When zooming into the potential of the Southern Africa region, it is observable that SADC intra-regional trade will account for 22% of the total potential followed by East Africa at 20%. South Africa alone will contribute 82% to potential exports, which may present an opportunity for air cargo. The risk however is that due to the skewed benefits towards South Africa, the possibility of empty return legs of cargo capacity is high thus undermining the competitiveness of the exports in markets that are already characterised by relative low income. Triangular cargo routes may be an option to mitigate this risk.”
ATR also believes the freighter market is growing strongly.”ATR forecasts a demand for 460 freighters over 20 years in the up to nine tonnes category. Passenger to freighter conversions are another part of the cargo business potential: most of the 10 second-hand aircraft delivered by ATR in 2021 have been converted for cargo operations,” ATR explains.
Dedicated freighters have become more important for Africa, and Boeing says:”While increasingly capable passenger widebody airplanes have helped the air cargo industry grow over the last decade, dedicated freighters are expected to continue carrying over half of global air cargo traffic for multiple reasons.”
Cost Reduction Essential For Africa’s Freighters
Given that African airlines suffer very high cost of operation which reflects in their charges to consignees, the reduction in air freight costs will attract new shippers away from rail and road transport, especially for short distances. According to ACI-Africa: “One of limiting factors for air freight demand is cost, typically priced 4-5 times that of road transport and 12-16 times that of sea transport.”
ACI-Africa explains further that “Commodities shipped by air thus have high values per unit or are highly time-sensitive, such as documents, pharmaceuticals, fashion garments, production samples, electronics consumer goods, and perishable agricultural and seafood products. For shorter distances air freight rates per kilometer are higher – It is therefore often preferable to use other modes for shorter distances.”
However, in short distances within and between some African countries, items like clothing have found their way to air freight, for instance, between Lagos and Eastern Nigeria, as high demand and quick sales encourage sellers to use air freight to move these foreign wears.
Going by the submission of ACI-Africa on cost above, the right-sizing of cargo aircraft is essential to bring cost-efficiency in serving Africa’s emerging cargo market sustainably. Aircraft makers have continued to enhance the cost-efficiency of their aircraft, while also improving environmental efficiency with newer technology. Embraer recently launched its passenger-to-cargo aircraft conversion programme, with emphasis on right-sizing in regional markets. It aims “to convert pre-owned E190s and E195s from passenger jets to freighters in response to the explosive growth in e-commerce and increased demand for cargo capacity especially to smaller markets, with deliveries planned for 2024.”
Embraer says cargo airlines can now put right-capacity E190F and E195F freighters on the right routes with the right frequency and right economics. Moreover, airlines can now access new smaller markets while deploying their larger aircraft on routes where they are more economical. Likewise, Boeing, Airbus and ATR have exciting and remarkably beneficial freighter conversion programmes supporting airlines globally and in Africa.
Cargo Corner Stone
Africa could double or triple its global air cargo-share with innovative approach to air cargo. Experts see growth in Africa’s cargo. African airlines are quick to embrace passenger service, rather than cargo, perhaps because of inadequate understanding of the underlying gains of air cargo business in Africa. As aircraft manufacturers pay new attention to freighter conversions, and as Africa’s market dynamics evolve into what many business analyst see as the largest trading bloc in the world with varying and new businesses driven also by e-commerce, the time is now to re-align the perception of cargo airline service in Africa using newer converter freighters. Looking also at smaller airlines and start-ups, it is up to aircraft manufacturers to fill up the gaps in Africa’s airlines’ cargo aircraft fleets bearing in mind cost-efficiency and profitability of African airlines, and overall mutual benefit.