FLYING HIGH: Kenya Airways boosting business with direct China flights

Before 2012, African airlines were seldom on the list of logistics partners of domestic large-scale enterprises. When a Kenya Airways Boeing 747 cargo plane touched down on Chinese soil on January 7, it marked the first direct freighter service between China and Africa, by Kenya Airways and KLM Cargo. The new cargo service links Kenya's capital Nairobi to Guangzhou, the capital city of south China's Guangdong Province.

Eight months later, James Shen, Cargo Division Manager of Kenya Airways in China, said the service is "a major air corridor," to further develop the fast-growing trade between the two sides.

"Since the launch of the service, the progress is rapid and [the new route] is becoming much sought-after," Shen told ChinAfrica. "The air route was gradually recognized as a major logistics channel for many large Chinese enterprises that has business operations in Africa, such as ZTE, Huawei, China National Petroleum Corp. and China State Construction Engineering Corp."

The carrier said that currently, the flight shuttle between the two destinations twice a week, with an occupancy rate of approximately 88 percent.

Chinese market

Conveniently situated, Guangzhou, with its good trading environment, is a preferred city for African traders and businessmen to expand their operations. Trade volume between China and Africa reached $166.3 billion in 2011, up 83 percent compared to 2009, according to statistics released by the Ministry of Commerce. China has become Africa's largest trading partner, and the continent is now China's fourth largest investment destination. Cumulative Chinese direct investment in Africa has exceeded $15 billion, with investment projects covering more than 50 countries. The large trade volume also expands the potentials of air cargo line linking Guangzhou and Nairobi.

"Over the past decade, African-Asian trade has been growing rapidly and that makes us focus on Asia's air cargo market, and makes China an air cargo hub for the region," said Kenya Airways CEO Titus Naikuni, adding that Asian routes contributed about 9 percent of the company's total revenue last year. He is hopeful of achieving double-digit growth in this regard, as African-Asian trade continues to flourish.

This ground-breaking air cargo route is also part of the airline's continued strategy to expand its air cargo business in China. In the next four years, Kenya Airways is set to launch six direct flights from Kenya to China.

Kenya Airways is not the only African airlines eyeing the Chinese market. Ethiopian Airlines increased its flights between Addis Ababa and Hong Kong to four a week, and provides daily flights from Addis Ababa to Guangzhou. "Ethiopian Airlines was the first African airline that launched its services to China in the 1970s," said Fikre Degife, the airline's Regional Director for China. "We are optimistic about the Chinese market, and pay more attention to our development here."

African market growth

Currently, Africa is one of the fastest-growing aviation markets in the world with 12.9 percent growth in 2011, according to the data from the African Airlines Association. In May, African airlines saw a growth of demand of 9.7 percent year on year, and a capacity expansion of 11.8 percent, said the International Air Transport Association.

African carriers have also improved their profitability. In 2011, the operating revenue of South African Airways increased by 2 percent year on year and that of Kenya Airways was up by more than 21 percent.

This progress benefits the active investment of African countries in the aviation industry. Ethiopia has spent $2.6 billion updating aircraft, as part of the development to turn Addis Ababa into an air transport hub linking Asia, Africa and Latin America. Kenya Airways also planned to introduce 12 freighters over the next 10 years to improve the airline's overall cargo carrying capability.