The East African Business Council (EABC) is appealing to regional leaders to consider measures that will facilitate air cargo operations during the ongoing COVID-19 crisis. The regional body also notes that while the rest of the world has adopted new measures to facilitate air transport, EAC airlines are still in the process of adapting. Peter Mathuki, the Chief Executive Officer of EABC, told The New Times that the demand for air cargo imports into the region remains low due to disruptions in global supply chains. He noted that, however, there is sustained growth in the demand for fresh produce exports anticipated to last till the summer. With global demand and supply disruptions, the cost of air freight, particularly in East Africa has escalated drastically, making the region’s export produce uncompetitive, Mathuki said. The region has enough capacity to produce, he said, and, as such, we want to see how we can use our own airlines to pick fresh produce from any part of our region. We want RwandAir, and other regional airlines, to pick produce from the region and be able to bring back cargo. We want to see EAC as one market. Regional Ministers for trade and transport, he emphasised, work out a working programme; assigning each regional airline a route for inbound and outbound air cargo. Air cargo accounts for approximately 35 per cent of world trade by value. Air freight charges to the EU and other markets in the last few weeks have ranged from $3-7 per kg up from an average of $1.50-2.50 per kg. Mathuki said: We can also agree on competitive rates per kilo. Right now, in most East Africa, its time for fresh produce and our produce is now on high demand in Europe. We are pushing for an open sky for air cargo. The prevailing high air freight charges are attributed to a combination of higher operating costs, fewer scheduled or chartered flights and an imbalance in supply and demand. In Kenya, for example, the volume of fresh produce shipped through Jomo Kenyatta International Airport (JKIA) reduced from a weekly 5,000 tonnes to 1,300. This reflects a 75 per cent decline with similar trends reported across the region. Costs, however, continue to ease with more scheduled capacity provided by KLM, Qatar and Ethiopian Airlines. Last month, in an effort to mitigate the spread of the COVID-19 outbreak, Rwanda halted all commercial passenger flights. A week ago, Rwandas national carrier, RwandAir, announced plans to start operating cargo flights to three global destinations to support exports and imports of essential goods. Its main destinations are Brussels, London and Guangzhou. The return of RwandAir and Kenya Airways to the skies, according to the EABC, is a welcome relief for exporters. However, it will soon become increasingly difficult for them to compete with airlines that are receiving government subsidies. The EABC says Government or Central Bank aviation industry subsidies in response to the COVID-19 such as direct financing, loan guarantees, corporate bonds and tax reliefs alone will not sufficiently address the current crisis. Short term recommendations The current COVID-19 crisis on air cargo operations requires extraordinary measures to address the challenges in the region, Mathuki said. Like the EU, it is noted, there is a need for greater cooperation between East African airlines and the international aviation community to ensure the supply and fair distribution of scarce and essential goods. To achieve this cooperation, EABC recommends that the EAC Heads of State consider the following: EAC Partner States to facilitate the use of passenger aircraft for cargo-only operations, including the re-positioning of air cargo flight crews. EAC adopts and directs the implementation of IATA operational guidelines for ground handling during the COVID-19 crisis. EAC temporarily grants the Yamoussoukro Decision (YD) 5th to 9th Freedom rights (Freedoms of the Air) effectively increasing capacity, reducing inefficiencies and costs. EAC promotes consolidation of air freight and cooperation between EAC airlines and allows for flexibility in scheduling. EAC encourages coordination and equitable share for EAC airlines for both south and northbound freight. To reduce operating costs, the EAC Partner States waive landing fees, excise duty on aviation fuel, navigation, landing, parking and COVID-19 related fees. To encourage imports by air, that the EAC Partner States waive all import duties and VAT by air during the COVID crisis EAC Partner States provide subsidies for the Aviation industry in the form of direct financial support; loan guarantees, corporate bonds and tax reliefs. Situation in Rwanda Vianney Kabera, chairperson of the Rwandan Horticulture Association, on April 21, told The New Times that he discussed matters with Geoffrey Kamanzi, the Manager- Policy Trade in Services at EABC. In the meeting, everyone agreed that if regional leaders approve and act on the recommendations everything would be okay. Shedding light on the local situation, Kabera noted that there are some cargo planes now flying to Entebbe, Uganda and to Nairobi, Kenya, that cannot land here (Kigali) because of the protocols involved during the lockdown situation. If these protocols can be relaxed now, and then brought back after the crisis, he said, it could save us a lot.” The situation in Rwanda, Kabera said, is really bad; even compared to our sister countries. He said: They are lucky they have cargo planes still picking up some produce from their countries. For us RwandAir is the main carrier taking our produce to Europe and beyond. Ever since the pandemic worsened, they closed down and our sector suffered a lot. When we made an alarm that farmers are losing produce, RwandAir decided to come up with one flight carrying 32 tons, out of our total 110 tons which exporters are willing to export once in a week. Imagine the deficit, 80 tons, now lying in the field or in packing houses. The association exports tons of perishables such as hot paper, eggplant, flowers and French beans. Kabera noted that because of the current problem, the Ministry of Agriculture and NAEB managed to convince the Ethiopian airline to help export the remaining 80 tons of Rwandan horticulture produce. As of today (Tuesday), the first flight was supposed to take off but we havent yet confirmed this since they are still doing their bureaucratic protocols, involving signatures, and then we can see how we move on. By press time Wednesday April 22, the flight had not yet taken off. On the other hand, Kabera explained, exporters requested RwandAir to introduce a second cargo flight but this did not work. Unfortunately, they cannot because they dont have cargo to bring back on their second cargo flight. If they fly with our cargo and return empty, for this second flight, they would charge us $5.4 per kilogram, up from $1.8 per kilo, which we cannot manage. The expected long term benefits of enhanced regional air cargo operations, an EABC position paper states, include an increase in inter-regional Air Transport traffic or frequencies by 41% and reduction of flight time. Another positive is reducing air transport cost (Passenger and cargo) by 10%. An additional 46,320 jobs and US$ 202.1 million per annum in GDP for the EAC Partner States, is another envisaged long term gain. According to Kamanzi, our position is that, at this time of COVID-19, we request that planes be allowed to pick products from any EAC country and be able to export, to at least recoup foreign exchange and make use of passenger planes so as to cut losses. Kamanzi added: It is basically a unified initiative to help exporters as well as attract foreign exchange. It is an appeal to help exporters as well as make use of the aircrafts. Post COVID-19 strategies The EABC has three other recommendations looking at the post pandemic period. One is for EAC Partner States to fully adopt and implement draft regulations on the liberalisation of air transport services and expand Freedom rights beyond the fourth to foster the growth of both passenger and cargo traffic. The other is for countries to harmonise landing fees, excise duty on aviation fuel, navigation, landing, parking and other related fees across the EAC region. Countries are also to improve air transport logistics and infrastructure, security and interconnectivity to attract high capacity carriers.
