One such company that has provided operational support services to both international and domestic airline operations from, into and within South Africa is the Aviation Co-ordination Services (ACS) which continues to advocate for not only the airline industry’s recovery, but also that of air transport which had a direct impact on cargo disruption too.
Here, we chat to Thapelo Mokwena, divisional executive - operations, ACS, to find out what the company is doing to provide solutions for the aviation industry.
How has airline profitability changed in the wake of Covid-19?
Generally, airline profitability was decimated in the wake of Covid-19. Some airlines battled to cope and opted to go for business rescue processes, while some opted for retrenchments. In general, the sector was negatively impacted by Covid-19. However, there’s a silver lining, namely if an airline operator has a cargo division that somewhat minimised the Covid-19 impact since it's the one sector that saw consistent growth during this period.
How do you expect it to change over the next 12 months?
Honestly, there’s been a significant shift in how the global community views or has learned to live with Covid-19. Vaccine availability has also moved the needle forward too, we’ve seen Denmark doing away with restrictions of movement and abandoning the lockdown measures to curb infections. These developments happen amid the Omicron variant-driven cycle of infections, which has shown to be more transmissible although less virulent.
Australia has also changed their hard stance and is preparing to open its borders to fully vaxxed individuals towards the end of February. With this backdrop, one wonders if we may see the recovery in the sector much earlier than previously anticipated. The International Air Transport Association (IATA)’s economic division is forecasting a pre-pandemic recovery in 2024 in their most optimistic forecast. At present, passenger volumes are at 55% capacity (on average) when compared to corresponding pre-pandemic numbers. Our expectations are that the numbers will continue to modestly pick up, however, we still see the next 12 months as subdued, since one cannot rule out the possibility of a new variant that could impact the sector negatively.
Can you tell us about the growth of cargo buoyed by ecommerce?
Cargo has been the poster child of the air transport industry in recent months. In some cases, its performance has surpassed the pre-pandemic numbers. Revenue generated by online shopping in Africa was estimated to be approximately $28bn USD in 2020, according to Statistics SA which was an increase of $6bn USD from 2019.
Exponential growth is predicted for a few more years. Markets such as South Africa, Nigeria and Kenya have the highest internet penetration on the continent, however, ecommerce penetration was at 37% for both Nigeria and South Africa and Kenya at 25% according to a report by PayU. As internet connectivity increases, so will ecommerce penetration. And as Africa and the rest of the world embraces digitisation, there are many opportunities for growth within the cargo sector.
There is growing interest in Africa, we see it by large international brands and payment platforms setting up shop here; online and omnichannel merchants are realising these breaks.
Thapelo Mokwena, Divisional Executive - Operations, ACS
What has the feedback to this been like on the African continent?
The African continent has had a torrid time, largely due to vaccine unavailability within the continent, and slow uptake of it once widely available. Last I checked, as a continent we were sitting at 16% vaccination rate, and this is not fully vaxxed but rather includes those with access to at least one shot of the vaccine.
To quote author and business expert, Victor Kgomoeswana "Africa is open for business", however, restrictions imposed by the developed countries have had a devastating effect on the continent and the aviation industry at large. The world witnessed the restrictions imposed on the Southern African countries after RSA disclosed the discovery of the Omicron variant.
In which ways can we expand this internationally? And also, place Africa on this map?
Africa doesn’t have to market itself anymore, the world can see the potential and opportunities in Africa. What businesses and leaders of industries on the continent need to do is make sure that when the outside world arrives, we are ready to provide them with the best service, technology, world-class customer experience and return on investment. I would hate to see us being African businesses be side-lined due to a lack of those things. We have the expertise and access to technology to stand toe to toe with our western counterparts.
Most businesses would like policy certainty and political stability in their operating environments. African countries need to do more to meet these basic expectations at the very least. However, developments in the ECOWAS block in recent months are worrying.
ACS’ Cargo Screening – how is the Plug & Play solution helping the aviation industry?
Our cargo screening solution is designed to assist cargo operators to focus on their core business, while we take care of the screening and the compliance requirements associated with the cargo screening function. Compliance issues can be daunting and time-consuming for operators. However, since ACS has been performing this function for a while, we are familiar with the required standards, and we keep abreast with the changes in legislation to ensure compliance.
Furthermore, we are technology-driven and we believe in deploying best-in-class technology in our operations. We provide all these services to our customers at competitive rates.
How can it be implemented within other sectors such as freight, logistics and mining, etc?
Screening is an essential component of air cargo, therefore, if goods are destined for air travel, screening is required to ensure that they don’t contain any materials that may interfere with aviation security.
To this end, the regulations allow for organisations to register as regulated agents where screening can be dispensed at the organisation premises in accordance with part 108 of the civil aviation regulations. In such instances, screening can take place away from the airport and although the process is slightly different, the screening equipment is like that deployed at airports.
What are some of the trends we can look out for this year?
From a screening processes perspective, the sector is highly regulated and as such changes rarely take place, rather the technology is improved to allow for new dangerous goods, complex objects and materials to be detected. However, there are new developments in passengers processing at airports. Most airports around the world are adopting touchless solutions to facilitate passenger processing, thereby minimising human-to-human contact.
These touchless solutions include the use of Near Field Communication (NFC) and Biometric recognition devices to aid in passenger facilitation in airports. Biometric devices might be a game-changer, especially with the immigration function at airports going forward.