MASkargo casts its gaze on Africa
MASkargo has been keenly watching the growing trade between China and Africa and with a fleet expansion based on A330Fs now in the works and a keen interest in new potential markets, the Kuala Lumpur-based cargo carrier looks set to make a move into the African market.
April 1, 2011
“We’re all looking for the next area where there will be a good opportunity to have good yields and maybe Africa is one of those that shows some potential because the business is growing,” said MASkargo managing director, Shahari Sulaiman. “The infrastructure is not really there and capacity has not really caught up to the volumes and the yields into Africa are also still quite good,” he notes. One of the possibilities is to work with an existing African airline to leverage its network and for it to leverage MASkargo’s. “There are a lot of African airlines looking at lucrative feed into places no one else has access to,” he says and these same carriers want to tap other destinations where they, in-turn have no access. “So the thing is how to do it, with whom and when,” he adds with a grin. Timing is right With the purchase of four A330 freighters the first of two of which will come on-stream later this year and the remainder early next year, India will be an important market for MASkargo, Shahari says. One possibility for tapping the African market would be to take the A330 on from India to a stop in Africa before heading to Europe. “There’s quite good demand into Africa and then maybe we can tap into the perishable market into Europe,” he says noting that this of course is contingent on getting the appropriate clearances including the all-important air rights for such a move. It would, on the face of it, make perfect sense as the carrier’s key European hub is Amsterdam Schipol, an important distribution point for horticultural products. “For us, it’s using the right equipment for the right market and in Africa maybe the cost of fuel might be an issue, so maybe a twin engine operation might be do-able, but a B747 operation maybe not.” Aside from air traffic rights and fuel cost, Shahari says there two other very important issues to suss out – customs and security requirements. As to whether it would be Nairobi that MASkargo chooses, that has not yet been determined he says, adding that he sees one or two points of entry into the continent, aside from the ‘traditional’ entry point for air cargo carries, Johannesburg – one being Nairobi and the other Addis Ababa, the capital of Ethiopia which is also a key horticultural exporter. Understanding the market It’s about understanding the market at this point, he says, “but it’s a market we should not ignore although I think to understand the culture within Africa is not easy,” he adds. “Just step back eight or 10 years ago to China – demand was growing, infrastructure was not there and accessibility was quite difficult, but the yields were fantastic. One could say that if certain things are done within Africa, that opportunity for airlines would exist there as well. Shahari said that hopefully African countries are open to let more people fly and allow fifth freedoms as this would enable carriers to build up a base which will provide more cargo feed into hubs like Nairobi. “If they open up and engage the people in the industry then carriers will come. But they need to look at it holistically and not just piece-by-piece, because it’s the whole supply chain not just fifth freedoms, but what happens to the customs issues, doing transhipment, interlining – all those other things have to be put in place,” he says. “It’s good to have a certain set of rules to abide by,” in reference to a common complaint of the African market that rules are frequently different – even within the same airport – let alone from one airport or country to another. But overall he does think the recognition of the need to open up and put consistent rules in place is there, at least in key hubs like Nairobi.