UAE taking air cargo seriously

United Arab Emirates has emerged as a country that has taken the lead in developing its air cargo portfolio. With new expansions and strong results, can this country emerge as the face of air cargo?
Namrata More…

UAE has various trade and economic factors contributing to its growth. The oil and gas sector accounting for over 38 percent of the country’s GDP is one of them. As per IMF estimates, the expansion of non-oil sectors helped UAE’s GDP to grow by 4.8 percent in 2013. Whereas, this year, the country’s GDP is expected to grow at 4.4 percent. The real estate market on a rebound coupled with massive investments is also the contributing factor. Of the seven emirates in the UAE, Abu Dhabi and Dubai have a major role to play in its economic growth with the former providing 60 percent of the GDP growth and owns about 10 percent of the world’s oil reserves.These regions are also the key transport and logistics hubs of the country and airlines and airports have gone through continuous expansions to support the growth. UAE is considered a safe haven for investment as well as capital flight. Accounting for approximately 40 percent of the FDI into the Gulf Cooperation Council (GCC), FDI inflows to the UAE increased by 20 percent to USD$12 billion in 2013.
Etihad Airways, the national airline of the United Arab Emirates, announced its strongest ever passenger and cargo volumes for a first quarter, together with US$1.4 billion in total revenues during the three-month period, marking a year-on-year increase of 27 percent. Etihad Cargo also outperformed the global market, carrying 127,821 tonnes of freight and mail in the first quarter. This marks a year-on-year increase of 26 percent, almost seven times higher than IATA’s prediction that the international cargo market will grow by four percent in 2014. The airline’s cargo revenue also increased by 26 percent to US$243 million, placing Etihad Cargo on track to become a billion dollar business in 2014. A number of factors contributed to the rapid growth of Etihad Cargo’s revenues in the first quarter compared to the same period in 2013, including stellar performances in the India (+32 percent) and China (+14 percent) markets, the launch of new routes to Brazil and Vietnam, and heavy demand for charter solutions. Cargo volumes were also strengthened by the launch of a joint freighter service with DHL, serving Pakistan and the GCC markets out of Abu Dhabi. Whereas the carrier’s hub Abu Dhabi International Airport, reported a 22.5percent increase in passenger traffic during April 2014 at Abu Dhabi International Airport, as compared to April 2013.The airport’s passenger statistics showed that 1,620,324 passengers used the airport during the month, growing from 1,322,203 during the same month a year ago. Aircraft movements increased to 12,420 in April 2014, recording 16.4percent growth when compared with 10,673 movements logged in April 2013. Cargo activity handling rose to 60,059 tonnes representing a 16.6percent increase when compared to 51,511 tonnes in April 2013. The top five routes from Abu Dhabi International Airport during April were Bangkok, Manila, London Heathrow, Doha, and Jeddah.
Dubai International maintained its strong growth trend in April 2014, with more than 6.1 million passengers passing through the airport. This is the third time in four months the airport has recorded monthly traffic of more than 6 million passengers. Total aircraft movements reached 31,234 in April 2014, climbing 2.5 per cent from the 30,469 movements recorded in April last year. In the first four months of the year, total aircraft movements rose to 125,928, up 3.6 per cent from 121,599 movements in the same period in 2013. Cargo volumes also continued to climb, rising 3.7 per cent in April to 207,317 tonnes, up from 199,985 tonnes recorded in the same month last year. Year to date volumes totalled 821,193 tonnes, up 4.6 percent from the 784,832 tonnes achieved in the first four months of 2013. But Dubai’s aviation sector also a new aspect to it with the Dubai World Central’s (DWC) Al Maktoum International Airport. After months of construction and planning, Emirates SkyCargo’s freighter fleet officially started operating from its new cargo terminal at DWC. The newly opened terminal is equipped with start-of-the-art technology and will be able to handle 700 000 tonnes of cargo annually and have 500 staff when phase two, scheduled to be completed by September this year, comes into operation. The terminal has the potential for further expansion to reach 1 million tonnes. “The start of operations at DWC today is a major milestone for Emirates SkyCargo. Our various teams, along with many of our partners and stakeholders, have been working very hard over the past few months to complete phase one of the project. We have also held numerous trials to test the readiness of every aspect of the facility and the movement of cargo between the DWC and Dubai International to ensure a smooth transition and enable us to meet our customers’ expectations,” said Nabil Sultan, Emirates Divisional Senior Vice President, Cargo in a statement.
The carriers in UAE are also undergoing route expansion plans to leverage on the air cargo opportunities worldwide. Emirates SkyCargo added Mexico City and Atlanta to its flight schedule, further expanding its freighter network to more than 50 destinations around the world.The once-a-week service to Mexico City starts in Dubai with a stop en route to Frankfurt, while on the way back the flight makes a scheduled stop in Houston and Copenhagen before heading back to Dubai. These destinations definitely create a confluence of air cargo opportunities for players worldwide.The freighter service to Hartsfield-Jackson Atlanta Airport from Dubai, which is also a weekly service, has a scheduled stop in Frankfurt and on the return leg stops at Copenhagen. This multi-stop service provides customers with the additional benefit to move cargo between these cities.
The Middle-East-Africa trade lane is an important part of UAE’s growth. And Etihad Cargo is well positioned to leverage further. Strengthening its operations in Africa, Etihad Cargo will offer weekly freighter service to Dar es Salaam, Tanzania. On the return sector to Abu Dhabi, the freighter will also stop in Nairobi, Kenya.Dar es Salaam – Tanzania’s biggest city – is a major industrial and economic centre in East Africa. Etihad Cargo will deploy one of its three Airbus A330-200 wide-body freighters on the route, offering customers heavy uplift capability of up to 64 metric tonnes. Initially, the UAE airline expects the service to carry heavy electronics, medical equipment and food items to Dar es Salaam, with primarily perishable goods destined for the Gulf region and Europe loaded for the return flights. Kevin Knight, Etihad Airways’ Chief Strategy and Planning Officer, said: “Tanzania is a new market for Etihad Cargo, and our weekly Abu Dhabi-Dar es Salaam-Nairobi-Abu Dhabi routing will allow us to capitalise on the strong import and export demand to and from one of the fastest growing cities in Africa. “This Dar es Salaam service will facilitate trade between the UAE and Tanzania, in addition to offering customers across the Middle East, subcontinent and Europe bidirectional main deck cargo solutions to and from a major trading centre on the African continent.
Logistics and transport companies in UAE are not afraid to innovate in terms of looking for newer markets or carrying out infrastructure expansions to accommodate the growth and demand from players worldwide. Clearly, the country is well positioned this year to be at the forefront of the air cargo industry. 