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   Vol. 15  No. 57
Thursday July 28, 2016

India To Africa Waiting In The Wings

India To Africa Waiting In The Wings

Narendra Modi     The overtures to boost trade made by Indian Prime Minister Narendra Modi to 54 African leaders at last October’s third India-Africa Forum Summit (IAFS) are yet to see action on the ground.
     This, despite the Prime Minister’s emphasis that “Africa will remain at the center of our attention. Our engagement with Africa will remain intense and regular.”

Going Astral

     Sanjeev Gadhia, CEO, Astral Aviation Limited pointed out that the time had indeed come “for more air connectivity between Africa and India, strengthened as it is with the Prime Minister’s keenness to bolster ties with Africa.”
     However, the “sad reality is that airlines from India have no footprint in Africa as the market is dominated mainly by African airlines such as Ethiopian Airlines and Kenya Airways.”

It’s About Time

      Gadhia underlined that “it was about time that airlines from India commence schedule services into key African hubs such as Nairobi, Johannesburg, Lagos, and Addis Ababa.”
     Astral, too, has kept away from India.
     The CEO mentioned that while his freighters currently operate from Nairobi to London and Liege in Europe in addition to eight African destinations on a scheduled basis, “Astral does not operate a direct freighter service to India or China as it relies on its interline alliances, especially with the Middle Eastern carriers, for moving its cargo into the Nairobi hub.”
     He was quick to also point out that it was “commercially not viable to fly a direct freighter service to/from Africa to India and China as there were no air-exports from Africa to India and China.”
     He went on to explain that, “in the absence of two-way traffic, it would not be financially economical to sustain freighter services.”

China Cooperation

     “Astral,” Gadhia said, “has an agreement with China Southern Airlines [that] has opened a door to continue to pursue interline agreements with as many airlines as possible that fly into its Nairobi hub.”
     For his part, however, Gadhia has been a strong advocate of intra-Africa trade that is “on the increase as more Africans have realized the importance of trading with each other.
     “African manufactured goods are competitively priced and attract lower customs tariffs in addition to being of good quality,” he stressed.

Sanjeev Gadhia

Blocks Emerging

     “The important point here,” Mr. Gadhia said, “is the emergence of three trade blocs.
     “These include the Economic Community Of West African States (ECOWAS), the Southern African Development Community (SADC), and the Common Market for Eastern and Southern Africa (COMESA) that covered nearly two-thirds of the continent.
     “Just one year ago in June 2015, COMESA-EAC-SADC Tripartite Free Trade Area (Tripartite FTA) was established representing a market of 26 countries with a combined total of 632 million people, which is 57 percent of Africa’s population; and with a total Gross Domestic Product (GDP) of USD$ 1.3 Trillion contributing 58 percent of Africa’s GDP.
     “To service such a huge market, we deployed a B747-400 freighter (110 tons), B727-200 freighter (24 tons), DC9F (15 tons), and F27 (5.5 tons).
     “We hope to acquire a further six B737-300 freighters over the next three years.
     “While a majority of our freighters are used for intra-Africa services, our twice weekly B747-400F Nairobi-London Stansted ‘perishables services’ carries cut flowers and fresh vegetables grown in Kenya.”
About India     The carrier joined the African Airlines Association (AFRAA) some time ago as its only cargo airline and perhaps the only privately owned airline in the association.
     Said Gadhia, “Membership in AFRAA has benefited Astral especially in savings in fuel and ground-handling due to AFRAA's initiatives for its member-airlines.
     “Most important is the effectiveness of AFRAA in lobbying for liberalization for African airlines and promoting cooperation between member-airlines, for which AFRAA has been very pro-active.”
     This is important since the “lack of liberalization combined with high taxes on fuel and cargo are some of the hurdles that we face in Africa,” said Gadhia.
     “The other hurdle was the lack of adequate airport infrastructure in many African destinations.
     “But obstacles aside, Astral’s offer of reliable and cost-effective air-freight solutions to over 50 destinations in the continent now opens new opportunities and markets intra-Africa.
     “With a middle class population of 300 million across Africa, Astral offers accessibility to its customers like never before.”
     “As potential in the continent grows,” Gadhia said, “Astral will continue to offer air-freight solutions to existing and new regions.”

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