Nairobi fire draws attention to growth prospects

The fire at Nairobi Airport appears to have been restricted to the international passenger traffic terminal and reports indicate that operations of both cargo and passenger flights have resumed to something resembling normality.

Even the temporary loss of Jomo Kenyatta International Airport, which is the fourth largest airport in sub-Saharan Africa, would have been a significant blow to a number of industries in East Africa, but it would also have had an effect on the wider air cargo market.

Africa is one of the few regions showing signs of growth in air freight. Although the region only represents 1.6% of the global market, its impact can be significant. IATA, in its most recent air freight traffic analysis, commented that “unlike global air freight markets, airlines in Africa have seen continually steady growth in FTKs (freight tonne kilometres) over the past two years. With economic growth in some African nations tracking at the fastest rates globally, demand for high-value, light-weight consumer goods is on the rise.” During the first half of 2013, Africa saw an increase in Freight Tonne Kilometres of 4.3%.

Jomo Kenyatta International Airport is undergoing substantial investment, with a series of new cargo terminals having open in the ‘Specialized Freight Area’ over the past several years. There are also plans to expand the airport as a whole with a new passenger terminal quadrupling the number of passengers Nairobi can handle.

In the case of Kenya, air freight is traditionally driven by the export of flowers which account for around 10,000 tonnes of freight a month. However, the growth prospects of this sector are heavily dependent on consumers in Europe and Japan, with most flowers sold through the Amsterdam flower market.

What is less widely known is the impact of the growth of the oil and gas sector in East Africa. Major new fields have already been discovered in Kenya and Uganda and exploration work is increasing in the region. The need to sustain the development of these fields is likely to have a continuing and substantial impact on air freight into East Africa. Combined with growth in private consumption, the prospects for air freight in East Africa will probably remain one of the best in the global air cargo market.