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South African, German airports sign historic accord.

Some of the toughest hurdles facing the growth of the airfreight industry in Africa have been a lack of cooperation between the various countries and inadequate infrastructure to handle the growing demand. At the third biennial Air Cargo Africa Conference and Exhibition, held Feb. 25-27 in Johannesburg, South Africa, both of these topics were front and center, prompting a historic agreement between South African and European airports.

Airports Company South Africa, manager of the nine largest airport hubs in South Africa, signed an accord with Mitteldeutsche Airport Holding, representing Leipzig Halle Airport (LEJ), that will increase cooperation and share expertise between LEJ and OR Tambo International Airport (JNB), as well as expand cargo handling operations in the South Africa hub.

"This strategic partnership will provide industry-leading guidance in developing the company's cargo business model and approach," said Tebogo Mekgoe, chief operating officer of Airports Company South Africa. The agreement follows the recent creation of a Cargo Management division at JNB, which is the largest air cargo hub on the African continent.

"Given the centrality of air cargo to ... the automotive, electronics, telecommunications and perishable industries, an active exchange of experiences and analyses of potential will develop the capacity and reach of both airport management companies," said Markus Kopp, CEO of Mitteldeutsche Flughafen AG. The company has similar cooperation agreements in place with four Asian and two North American airports, but this is the first with an African airport.

Also during the Air Cargo Africa 2015, Tom Crabtree, regional director for market analysis with Boeing Commercial Airplanes, shared some encouraging statistics about the vast potential of greater trade opportunities across Africa. Citing a study from the United Nations' Commission for Africa, Crabtree said that more than 80 percent of Africa's exports (about 1.73 million tonnes per year) is destined for outside markets. Europe has always been the largest trade partner, he said, but its lead is rapidly shrinking from a high of roughly 70 percent of exports to around 57 percent today. Much of the change is coming from inroads being made by Middle Eastern and Asian carriers, whose shares of the export market have grown by 14.4 percent and 12.9 percent, respectively.

"There is massive growth potential within African air trade," he added. In fact, African air trade is expected to grow by an average rate of 4.3 percent for Europe, 5.2 percent for North America and 6.6 percent for Asia, through 2033, according to Boeing-released data.

With a population of 1.1 billion people, Africa has the world's fastest growing continental economy, Crabtree said, with an expected average annual economic growth rate of 4.6 percent per year up to 2033. At that rate, air cargo traffic on African airlines is predicted to grow faster than any other regional block--at 6.1 percent per year until 2033.

Other panelists agreed that Asian imports to the continent will be the most important driver for growth of African-Asian trade, and that e-commerce and the rising demand for consumer goods, particularly in India and China, will boost air trade growth in the Asiato-Africa direction. Others remarked that there is a critical need for "justin-time" shipments into Africa of less than five days, as opposed to the current average of seven to eight days.

In his keynote address at the start of the conference, Nico Bezuidenhout, acting CEO of South African Airways, encouraged the removal of barriers to trade in Africa and called for an "open trade" environment that would allow air cargo to be a catalyst for growth throughout the continent. He said the industry has only seen the "tip of the iceberg" of potential African airfreight opportunities.

According to STAT Times, the organizers of the event, the conference attracted a record-high 527 delegates, 80 exhibitors and nearly 3,000 trade visitors came to the three-day event.
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Title Annotation:Around the world: AFRICA & MIDDLE EAST
Comment:South African, German airports sign historic accord.(Around the world: AFRICA & MIDDLE EAST)
Author:Woods, Randy
Publication:Air Cargo World, International ed.
Geographic Code:6SOUT
Date:Apr 1, 2015
Words:641
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