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Aviation cargo volumes drop as passenger numbers go up

Thursday November 19 2020
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Dar es Salaam. Cargo tonnage handled through 58 airports managed and owned by the Tanzania Airports Authority (TAA) dwindled by 14.8 percent in 2019 compared to 2015 as the number of passengers increased.

Last year, the airports handled 21,435 tonnes of cargo, compared to 25,166 tonnes handled in 2015, TAA’s latest data show.

The authority attributed the downward trend to the improvement of other means of transportation - particularly marine - that were eating into the portion of cargoes carried by air transport.

TAA director general Julius Ndyamukama also levelled blame on the drop in imports of pharmaceuticals and telecommunications equipment.

“The drop in importation of pharmaceuticals and telecommunications equipment may have been triggered by the organisations’ structural changes,” Mr Ndyamukama told The Citizen on the phone.

Going by official data, Tanzania has been losing over Sh800 billion on importing medicines and other medical supplies every year.

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The trend has seen to the government doing all in its power to create an enabling environment for investors in domestic factories to reduce expenditure on imports.

On a positive note, however, the number of passengers passing through airports managed by TAA climbed by 1.4 percent, to 3.502 million passengers in 2019 compared to 2015. The growth was significantly fuelled by the government’s continuous efforts in strengthening Air Tanzania Company Ltd (ATCL) and promotibg tourism, according to Mr Ndyamukama.

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A renowned aviation expert and trainer with nearly four decades of experience Juma Fimbo said airlines must see cargo as a ‘core business’ from now on if the country is to boost the sub-sector.

“We need to make local cargo business our priority. Cargo’s demand characteristics should be independent of air passenger demand,” suggested Mr Fimbo.

Swissport Tanzania Chief Executive Officer Mrisho Yassin called for the promotion of exports so that the country does not rely on imports but rather exports.

“We cannot have control over imports, but we can have control over exports,” said Mr Yassin.

Inaugurating the 12th Parliament last week, President John Magufuli, said the government had a plan on the card to buy one cargo aircraft for the national carrier with a view to boosting exportation of horticultural products, fish fillets and meat.

Precision Air founder and board chairman Michael Ngaleku Shirima said one of the principal factors limiting the volume of airfreight in the country was the lack of significant volumes of two-way activity and expensiveness of Tanzania as a destination.

This, the 77-year old Shirima said, makes the operation expensive, forcing people to run for alternatives. “Airport services, airport charges here - including fuel - have not been cheap.

All these factors make the destination expensive,” said the aviation guru who has 57 years of aviation experience.

To facilitate air freight, he suggested, Tanzania needs to lower airports charges to attract more airlines and take down transport costs.

According to TAA figures, the landing charge per 1,000Kg aircraft at Dar es Salaam, Kilimanjaro, Zanzibar and Pemba airports are $5.

Parking charges for aircraft of up to 20,000Kg stand at Sh1, 000 and $6 per 12 hours for airlines registered in Tanzania and foreign ones respectively. Departure taxes for domestic and international travellers are Sh13,000 and $49 in that order.

“People are looking at prices than anything else. Tanzania as a destination that competes with other neighbouring countries is much better hub than others only if airport charges will be lowered to attract more airlines,” said Mr Shirima.

But offering charges relief seems to be difficult for TAA because the fate of its survival is largely dependent on airport charges.

“How do we consider providing tax relief to the industry’s players while we are also in need of the support?” TAA’s director general was once quoted by The Citizen as querying.

“We can do so only if the government decides to step in and give us support for us to be able to operate.”

Transport permanent secretary Dr Leonard Chamriho was recently quoted by The Citizen as saying the government was ready to work on an incentives package meant to stimulate the market only if stakeholders would officially submit pleas.

But, Mr Shirima suggested that “We need to create a task force of aviation experts from within and or outside the region to study our situation and then offer solutions which now should be implemented.”

Hub

To be a hub, aviation experts said the country needs hub-and-spoke: a central airport that flights are routed through, and the routes that planes take out of the hub airport.

You need flights coming in the hub and flights getting out from the hub to save airlines money and give passengers better routes to destinations.

For each seat that is filled by a passenger, an airline lowers its break-even price, which is the seat price at which an airline stops losing money and begins to show a profit on the flight.

Future

Globally, the future of the industry is black.

Aviation is very expensive industry that requires a lot of cash, not only to operate but also sustain during the Covid-19.

The future is black because there are some airlines that will not be able to come back except national carriers which have heavy support of the government like in the US.

“Private airlines are in a high risk because they do not have good backup for financing,” noted Mr Shirima.

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By Alex Malanga @ChiefMalanga [email protected]

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