The cargo business isn’t all about trying to afford new freighters and increasing rates. As Dick Murianki, new chief of Kenya Airways Cargo, it is just as important to spark the flames of passion in your workers. For the next 12 months I don’t have any radical goals, in terms of routes or the like,” Murianki said.”Instead, the absolute first thing we have to do is to infuse confidence in our people. Want them to own the business.
I want intimacy between them and the business so that when the loader handles the cargo, he loves and cares for it. That way, when customers give us their cargo, they trust us to look after it. They need to know when they give us a shipment that it’s as good as being in their own hands.” Inspiring passion in staff is notoriously difficult .For cargo, the non-sexy cousin to passenger services, it is even more difficult .
Murianki is confident, however ,and said there are two foundations he needs to lay to start building such a culture. The first is with the operations team, which is often overlooked but is the only team that actually comes into any direct contact with the cargo.”I want to have a debate with them-with the loader, with the equipment operator, because it is they who are the experts, not me-about how we can give the customer the best service,” said Murianki.
“My main message to them is this: do the best you can in serving the customer because, in a way, it’s not the bosses who pay your salary: you pay your own salary. When you sign an employment contract with us you give us your hands. But we also need your heart and mind-your passion. Only when we have that commitment, only then can I launch a growth strategy.
” Muriankis message for the second foundation –with the sales team-focuses less on engagement, and more on truth.”Unfortunately, there’s been a lot of dishonest in the industry, a lot of misinformation. I want people to trust our
word. That will mean sometimes giving them the bitter truth; that if we can’t deliver something we will tell them. But I say we have to be honest with our customers, because businesses want to be able to plan with certainty and that only comes with honesty.”
Nonetheless, there are still technical and strategic considerations that must be addressed. Notably, the arrival of KQ Cargos new freighters. The outfit plans on owning a fleet of 12 freighters by 2022. It already has one 747-the safari connection-wet leased from KLM –Martinair, which operates between Africa and China. That now flies the Amsterdam-Guangzhou-Nairobi-Lagos-Nairobi-Amsterdam circuit, with occasional stopovers in Sharjah on its way from Guangzhou to Nairobi. Capable of carrying 120 tones,
Murianki admits that a good load is 90 tones out of Guangzhou ,but s nonetheless happy with the freighters performance thus far. In April 2013, the carrier also took delivery of the first of four KQ 737-300 passenger jets identified for conversion to freighters. These freighters are marked for regional routes, such as to Kigali (Rwanda).
So far, while certain legs of the two current freighters are seeing healthy load factors, there are some that are not performing as hoped, such as the Nairobi to Lagos leg, although Murianki said it is at least breaking even. Luke Arrum, cargo commercial manager, agrees that while it has been good to get into the freighter business, it has been a tough start.
”Yes ,it has been a bit of a challenge in the beginning ,but it is starting to stabilize and there is a lot of interest from Kigali and other places in the region,” he said.”The way we are seeing demand growing will hopefully allow us to activate some stations and routes we haven’t been able to yet.” However, Arrum is realistic and admits the need to be cautious.”The freighter business can be very challenging and globally it’s stagnating, so we have to take careful steps with the conversions. We have converted two, but the other two identified are dependent on demand. “We do need wide-body freighters though,”
he insisted.”They will feed into the hub [from out of Africa] so we can use the narrow-bodies for distribution around the region and continent,” he added. “In our 10-year plan we’ve made provision for a 777 to come on board, if all goes well, sometime in 2014.We may opt for something smaller though, such as a 767, which would be cheaper and more readily available.” Part of what may swing the decision either way on freighter numbers and types is the global slump in demand for cargo that has led to massive overcapacity on the market.
In response, many airlines, particularly those from Europe and North America, have grounded their freighters and so balanced out capacity supply and demand. But emerging and growing markets continue to see healthy interest in cargo, even though destinations and routes remain patchy and uneven. “There is a renaissance of trade and business in Africa,” said Murianki.”There’s a lot of fresh produce-food and flowers-moving from Kenya to Europe. Mining equipment, gem stones, too. Kenya are positioning itself to take advantage of Nairobi’s strategic position to east and central Africa.
I want Kenya Airways cargo to be among those that take advantage of that.” Part of the carrier’s proactive attempts to encourage intra-African trade is by facilitating trade missions. “We are partnering with the Kenyan Export Council to help them spread their goods as far as possible throughout Africa.” said Arrum.”Intra-African trade is growing but it can still involve flying to Europe first, and we hope to change that as we have one of the best networks in Africa. “We are also helping traders to reduce their turnaround times and so do more business, which means they will come back again and again.
And with wide-body freighters we can fly to Asia and the Middle East .Hopefully, this will all make them want us to be their main transportation agent.” Arrum agrees with Murianki, though, that KQ Cargo needs to improve itself if it wants to make any truly impressive gains.”We need to improve on our systems, in particular our cargo handling at all our stations where we sometimes have challenges .As we grow, and we may also need a completely dedicated freighter operations team, starting with capacity and revenue management. Since Arrum heads the sales team, his focus is on that, and he wants to increase the number and spread of the team around the continent.
“Where we have placed our own people we have seen our business change virtually overnight, “he said.”For example, Addis Ababa went from virtually 0% to 300% .How quick we expand our sales presence, though, will depend on the frequency of flights the stations have.” He said that the carrier is looking to expand frequencies to Entebbe, Dar es Salaam and Zanzibar, which are all doing well and are steady.
The latest wave of massive oil and gas projects around Africa is stimulating demand for cargo, and KQ is looking to take advantage. So, too, in the growing pharmaceutical market, coming in from both Europe and India in massive amounts, as the overall level of healthcare improves. All of this would be encouraging for an airline of KQs size if it were not for the looming threat of the non-African giants, such as Emirates.
They are poised to swamp the regional industry before it has an opportunity to grow in strength until it can readily compete. This is certainly something that KQ CEO Titus Naikuni recognizes and has spoken at length about. At the African Airlines Association (AFRAA) conference in Johannesburg (in late 2012) he even raised the suggestion of Africa’s big three-Kenya Airways, South African Airways and Ethiopian Airlines-merging in order to compete.
While that seems unlikely at the moment, the more reasonable suggestions of a pan-African alliance or airlines was also mooted and, unlike previous years, this time there was considerable interest in the suggestion. Arrum agrees that the threat is real and African carriers need to recognize it.”It is becoming more and more important that African carriers learn to cooperate, rather than going for each others necks all the time,” he said.”Because, if we don’t eventually what will happen is that other players from the Middle East and Europe will be all over the place while we are standing by fighting each other.
That is fact and we cannot ignore it. Some of the African players are beginning to understand why they need to form an alliance .But the discussion about doing it has gone on too long. Let’s start doing it.” Arrum suggests existing hubs-Addis Ababa in the north, Nairobi in the centre, Johannesburg in the south and another undecided one in the west –could ,if there was better cooperation between the relevant airlines, strengthen all of their businesses. “If the carriers in all of those places can learn to work together, then I think we can put together a front and not be eaten up and swallowed .
We can be stronger players.” However, as can often be a problem, this requires regulators to help the industry.”There is supposed to be an open sky policy within Africa for African carriers, but while plenty of countries have put ink on paper they have not actually implemented it,” said Arrum.”Some of the greatest challenges we face are in getting permits to go into African airspace’s.” Not all African countries have this attitude though.”The Malawian Government has been very good,” admitted Murianki.” They allow us into three cities.
They recognize that competition is a reality in life and that it is foolish to wish away your competition.” And, what is true for aviation in general, Murianki believes is doubly so for under-appreciated cargo. “Africa is still totally undeserved by air transport and air cargo more so. It’s an undervalued asset and I see a lot of potential. For Kenya Airways,
I believe cargo is the main growth area for the airline and is so significant it needs to be a subsidiary of its own, but that won’t be immediate. Currently, it is a unit under the chief operating officer. We have work to do first; we need to mature. “Yes, I want to develop some routings, but first we have to focus on profitability, the efficiency of the terminal and operation of the freighters.
And I have the challenge of making it all work,” he said, laughing. Air cargo transport has become more on demand globally and it has made transportation for fresh produce, mining equipments, stationery, fish, hardware, electrical, building materials easy across the global. We have daily or weekly consolidated and scheduled flights operating around the world.
In supplement to destinations where there are no commercial flights we have private air cargo charter flights to compliment. For humanitarian aid and relief flights private air cargo flights works perfect especially to remote destinations in Somalia, South Sudan,DR Congo, Central Africa Republic and to various war torn areas in the horn of Africa and globally. Anthony A Juma is the Editor and Director Commercial and Flights Operations at Wings Over Africa Aviation Limited.