Navigating the skies: The growing role of air cargo charters in Africa

According to The International Air Transport Association (IATA), global air cargo demand in March 2024 increased by 10.3% compared to March 2023, and international operations saw an 11.4% increase. Available cargo capacity increased by 7.3%, with Middle Eastern airlines experiencing the most substantial demand growth at 19.9%. African airlines also performed well, with a 14.2% increase in demand.

In February 2024, African airlines experienced a remarkable 22% surge in air cargo demand compared to the previous year, marking the highest growth rate globally. The intra-Africa trade lane was particularly noteworthy, exhibiting a substantial 42.3% increase in demand, while overall air cargo capacity rose 28.2% year-on-year.

"Africa is a growing continent", said Erdem Sari, Regional Air Charter Manager, StarBroker – DHL Global Forwarding, Middle East and Africa, as the opening statement during a recent interview with Logistics Update Africa. DHL Global Forwarding and DHL Aviation have bundled resources to add value. This was made possible by their in-house carrier, DHL StarBroker, which is DHL Global Forwarding's in-house charter team.

The demand for air cargo in Africa is on the rise, driven by the growth of e-commerce, urgent deliveries, and the Red Sea Crisis. This demand has led to an increase in both scheduled cargo flights and charter air cargo. These specialised services offer fast and efficient transportation solutions for various industries, including mining, oil, and e-commerce.

Overview of Africa's air cargo charter market

While discussing the overview of the air cargo charter market in Africa, Sanjeev Gadhia, CEO, Astral Aviation, said, "The air charter market for Africa has been buoyant since September 2023, with an increase in charters to Africa."

Discussing the same topic, Leonard Rodrigues, Head of Revenue Management & Network Planning, Etihad Cargo, informed that "Etihad Cargo witnessed a 35% increase in charter requests and operated 23% more charters in 2023 compared to the previous year."

"Traditional demand for cargo charters to Africa remains strong, yet supply remains constrained compared to 2019. This shortfall results from competition for capacity on major trade lanes as companies pivot towards more reliable and quicker shipping options, such as air charters, and a relative lack of belly cargo space out of Greater China, coupled with a higher reliance on freighters," added Rodrigues.

To add to that point, Jenny van Wyk, Country Manager—South Africa, Chapman Freeborn, said, "As Africa's economy continues to develop, the cargo air charter market is poised for further expansion and innovation."

But what is fueling the growth of the air cargo charter market in Africa?

Partnerships between industry players have boosted air cargo charters in Africa. Etihad Cargo and Astral Aviation's collaboration enhances cargo services between the UAE and Africa. Their new route from Nairobi to Abu Dhabi facilitates swift transportation and opens up new trade opportunities, promoting economic growth.

Astral Aviation's Sanjeev Gadhia also believes that geopolitical disruptions are one of the primary factors driving the growth of air cargo charters in Africa. During a recent interview, he informed Logistics Update Africa, "The main factor driving demand for charters is disruptions in the supply chain caused by extreme situations such as conflict, calamity, pandemics, and natural disasters, as evident in the surge of charters during Covid-19 in 2020-2021, the Suez Canal crisis in 2021, the Red Sea crisis in 2023-2024, and conflicts in Ukraine, Sudan, and the Middle East."

Etihad's Rodrigues added that demand for cargo air charter services in Africa is influenced by geopolitical disruptions and other factors, such as urgent delivery needs and transportation of high-value items like electronics.

"It's a sad reality that our industry thrives in times of crisis. However, this should not be seen as an opportunity to profit but to serve and leave an impact on the clients dependent on our services," added Gadhia as a message to industry stakeholders.

Airlines believe charter services are in high demand due to geopolitical disruptions and urgent delivery needs. However, Wyk from Chapman Freeborn says there is also a high demand for African charter services due to infrastructure limitations, remote location, time sensitivity, and unpredictable road conditions. Industries such as mining, oil and gas, humanitarian aid, and agriculture rely heavily on cargo air charters to meet their specialised needs.

Africa's mining and oil industries require charter cargo flights to ensure the arrival of spare parts. Due to the need for more commercial space, life science and healthcare products also need charter services. DHL's Sari confirms that these industries rely heavily on charter services.

E-commerce: Driving charters beyond oil and gas sectors
According to Wyk, air cargo charters have become vital for diverse industries beyond traditional sectors such as oil and gas. The rise of e-commerce in Africa leads to increased demand for air cargo charters. This is due to the need for a reliable and swift delivery system for time-sensitive and high-value shipments. Businesses across the continent are leveraging air cargo charters to cater to their customers' needs.

When Rodrigues was asked what is driving the demand for air cargo charters in Africa apart from geopolitical disruptions, he answered, "The rise of online shopping, which accelerated during the Covid-19 pandemic, has led to a surge in demand for consumer goods not just locally but globally."

Rodrigues also mentioned that although e-commerce demand in Africa is growing rapidly, it is still challenging to contract directly with big players for the last-mile organisation. As a result, these volumes are usually divided among multiple forwarders and intermediate hubs. Additionally, the rapid growth of this market has led to an increased demand for electronic transportation, which is vulnerable to theft and damage.

Overcoming obstacles and flying towards the future
Africa's air cargo charter sector faces challenges due to increased demand, the Red Sea Crisis, and high war-risk premiums. However, industry stakeholders such as DHL, Etihad Cargo, Astral Aviation, and Chapman Freeborn harness technology's power to develop innovative solutions.

To mitigate the impact of increased demand due to the Red Sea Crisis, Chapman Freeborn maximises capacity, prioritises critical shipments, optimises flight routes, and maintains open communication with clients. Meanwhile, DHL has avoided capacity tightness and cost increases for their customers due to their control over a wide BSA and a high charter capacity. On the other hand, Etihad Cargo provides comprehensive security at all transport stages and is CEIV Li-batt certified for handling dangerous goods such as lithium batteries.

Unique solutions for unique challenges
Sari believes that Africa's aviation sector needs an open sky environment as flight permission limitations and slow execution times of flight-related approvals are slowing down the industry. High handling and terminal charges in many countries add to the overall product pricing, affecting the competitiveness of African producers in foreign markets. Similarly, import charges are expensive, and the gap is paid by African nations, which distracts their competitiveness.

On the other hand, Rodrigues points out that delivering charter services is challenging, especially in the dynamic and unpredictable global logistics landscape. The year 2023 exemplified these challenges, with robust Q1, downward pressure on yields in Q2 and Q3, and a strong Q4 finish. These fluctuations affect both scheduled services and charter activities, necessitating a responsive and adaptable approach and highlighting the importance of having the right expertise and knowledge to navigate disruptions effectively and maintain the integrity of the supply chain.

"Etihad Cargo addresses these challenges by prioritising customers and flexibility, which is critical in charter operations," added Rodrigues. The UAE-based airline employs various strategies to safely and efficiently handle perishable goods during transit, including using specialised equipment and containers. Close collaboration with local handlers and logistics partners who understand the regional infrastructure also helps Etihad ensure smooth transitions from air to ground transport, enhancing the reliability of delivering perishable goods.

Popular routes for air cargo charters
The aviation industry is experiencing high demand for cargo charters across various regions. While Astral Aviation is experiencing high demand for cargo charters across Asia-Africa, Asia-Middle East, and Intra-Africa, Etihad Cargo operates primarily in Asia-Middle East, Europe, and Africa. "We are experiencing high demand mainly from Hong Kong and Dubai to Johannesburg in addition to flights into Tel Aviv," said Gadhia.

Additionally, Wyk from Chapman Freeborn says, "Routes connecting major economic hubs with remote or underdeveloped areas are currently experiencing high demand for cargo charters in Africa." Sari, on the other hand, says, "DHL Global Forwarding operates a global network of long-term flight operations. These networks include flights from Asia to Europe."

"Johannesburg has emerged as a crucial e-commerce hub for the South African region, indicating a high demand for cargo services there, while Etihad Cargo predominantly serves east and west from the UAE. These areas reflect the dynamic nature of demand and the strategic placement of services to accommodate regional needs effectively. Recently, there has been a notable surge in demand on routes from the Indian Subcontinent (ISC) and Southeast Asia, largely due to disruptions in the Red Sea that have affected traditional maritime transport," added Rodrigues.

Evolution is the best way ahead
Astral Aviation has constantly evolved from an African airline to a global airline with online hubs in Dubai and Hong Kong and offline hubs in Liege. "We are investing in a fleet of B767-300Fs and plan to acquire the B777Fs in 2025 in addition to the E190Fs. We are expanding our network to include new destinations from Johannesburg, and our plans for China are at advanced stages of commencement by the middle of the year," said Gadhia.

The African airline invests in new partnerships, technology, and infrastructure to streamline operations and improve customer service. Gadhia mentioned that the airline has a clear long-term sustainability plan, fleet modernisation, operational efficiency, carbon offsetting, stakeholder engagement, reporting, and transparency for the way ahead. Similarly, Rodrigues mentioned that Etihad Cargo aims to achieve net zero carbon emissions by 2050 by renewing its fleet with more fuel-efficient aircraft.

With increased infrastructure, technology, and partnership investments, the future of air cargo charters in Africa looks promising. The sector is expected to be crucial in driving economic growth, fostering trade relations, and enhancing connectivity across Africa. The significant trends shaping the future of the charter sector include increased digitisation, demand for sustainability, and the emergence of new markets.

To adapt to these evolving demands, companies are investing in digital solutions, expanding their presence in emerging markets, implementing sustainable practices such as fuel-efficient flight routes and carbon offset programs, and transitioning to eco-friendly aircraft where possible. Additionally, the continued growth of e-commerce and traditional niche markets such as automotive, oil and gas, energy, and perishables will continue to drive the growth of air cargo charters.