Justin Burns, ACW: How is business for Astral Aviation?
Gadhia: We have experienced a 15 per cent decline in payloads in 2016, compared to the same period in 2015, which can be contributed to various reasons such as drop of oil, gas and mining commodities, which combined with a weak currency is affecting inbound volumes to Africa.
There is excess capacity of an average 25 per cent to and from Africa, and yields are low. We expect the situation to correct itself in the second half of 2016.
Justin Burns, ACW: What are your buoyant trade lanes?
Gadhia: Nairobi–London Stansted – which is being operated twice-weekly on the Atlas wet-leased Boeing 747-400F now in its third year of operation. In addition, Nairobi-Juba, Nairobi-Mogadishu and Nairobi-Mwanza continue to operate relatively well on schedule, while the Djibouti–Sanaa route has been very buoyant on the charter front, mainly for the aid-fraternity with an excess of 50 charters performed to date.
Justin Burns, ACW: Where are seeing strong growth?
Gadhia: Aid and relief along with consumer goods are on the rise. The perishables sector is experiencing good growth levels to and from Africa.
Justin Burns, ACW: Does Astral plan on widening its network and reach within Africa and outside of Africa?
Gadhia: Indeed. Astral has exciting expansion plans in its existing East African footprint in addition to planned expansion into West and Southern Africa, along with the acquisition of B737 Freighters. Timing is very important as the expansion plans into West Africa is dependent on a buoyant oil and gas industry, which is sadly not the case, however, Astral will continue to evaluate its strategies cautiously.
Justin Burns, ACW: What are the biggest barriers to development of the air cargo industry in Africa?
Gadhia: 1) The air cargo sector in Africa is not fully liberalized 2) Restrictions on traffic rights on the intra-African sector for African carriers due to outdated BASA’s which limit growth potential 3) Protectionism exists in certain countries, which limits accessibility 4) Unfair and restrictive business practices in traffic rights 5) Imbalance in air cargo results in higher operating costs for freighters 6) Lack of intra-African connectivity 7) Cargo infrastructure 8) High costs – jet fuel, cargo handling, royalties, freight fees and taxes 9) Lack of co-operation between African airlines in air cargo 10) Dominance of foreign carriers who control 85 per cent of air cargo traffic 11) Ageing freighter fleet and presence of Russian aircraft
Justin Burns, ACW: Which countries in Africa do you think will boom over the next few years?
Gadhia: The freighter hubs of Nairobi, Addis Ababa, Johannesburg and Lagos will experience good levels of growth as all inbound cargoes are routed via these hubs, however, I rate the following countries highly: Mozambique, South Sudan, Somalia, Cameroon, D R Congo, Djibouti, Ghana and Rwanda.
Justin Burns, ACW: What are the potential benefits of using drones to move cargo in Africa?
Gadhia: Commercial drones will revolutionise Africa, just like mobile technology, due to various reasons such as lack of accessibility, infrastructure and physical address. Drones will play an important part in the transportation of medicines in remote and in-accessible areas, in addition to urban deliveries of small parcels to the growing African middle-class population, which don’t have access to a postal address. Drones will be used in aerial surveys and will be useful to monitor infrastructure projects in addition to the power, oil and gas sector, besides anti-poaching efforts. Astral aims to be the largest drone operator in Kenya once the regulations have been ratified.
Justin Burns, ACW: Where do you see the air cargo industry in 10 years’ time?
Gadhia: It’s very hard to predict where Africa will be in 10 years time,, but one thing is for sure, that it will be the largest market for air cargo, as it’s a continent with 54 countries, and blessed with enormous natural resources which remain unexploited, along with the largest middle-class population in the world which is embracing e-commerce at a fast pace.
Many African countries will emerge from developing to developed status with a new generation of young leaders and entrepreneurs, which will transform, what was once described as the failed continent to a prosperous one.