Home Latest News Petroleum and gas exploration raise local air freight demand

Published on Wednesday, 18 March 2015 05:29

The volume of air cargo in the domestic market has increased substantially buoyed by oil and gas exploration projects and ferrying of the dead, new statistics by the aviation regulator showed.

An estimated 3.2 million kilogrammes of cargo was delivered by air in the domestic market for the year ended December 2014 compared to 1.9 million kilogrammes in 2010/2011, representing a 68 per cent jump, the Kenya Civil Aviation Authority (KCAA) said.

Although road and rail transport have been dominant for cargo movement over the years, many traders are turning to the more convenient and faster air transport for delivery of cargo especially in remote areas where mining and petroleum exploration activities are ongoing.

“The unit cost of air freight is relatively higher than road transport but many are preferring to fly equipment to remote project sites for convenience,” Sanjeev Gadhia, the chief executive of Astral Aviation Ltd, which is based at the Jomo Kenyatta International Airport (JKIA), told the Business Daily.

The discovery of oil deposits in the Lokichar Basin of Turkana has helped drive demand for air freight services to the region as exploration firms, including Tullow Oil and its partner Africa Oil, stepped up the search for additional deposits. Several exploration projects are also ongoing in north eastern Kenya, fuelling demand for air cargo transport.

National carrier Kenya Airways recently entered the domestic funeral transport business, causing a stir in the segment where traditional notions have put off most low-income earners.

Repatriation segment

“We have seen growth in our repatriation segment where many people are looking for a fast and easier way to transport bodies of their loved ones to be laid to rest. This is mainly from Nairobi to Kisumu and Nairobi to Mombasa and vice versa,” Dick Murianki, the general manager of KQ Cargo said.

KQ Cargo transports the dead at less than one quarter of the price demanded by conventional service providers plying the Nairobi, Kisumu, Mombasa and Malindi routes.

The national carrier charges Sh25,000 from Nairobi to Mombasa, Kisumu or Malindi and Sh35,000 between Kisumu and Mombasa or Malindi.

The airline has about eight daily flights between Mombasa and Nairobi and four between Kisumu and Nairobi. The airline is trying out the service in partnership with Lee Funeral Home, the University of Nairobi’s Chiromo Mortuary, Kenyatta National Hospital, Umash Funeral Home, Montezuma & Monalisa Funeral Home, and Kenyatta University.

The rock-bottom prices have rattled the market where hearse operators demand as much as Sh300,000 to transport bodies to destinations that KQ seeks to cover.

Among the top-end hearse operators, Lee Funeral Home charges Sh220,000 to transport a body in a limousine to Kisumu, Sh195,000 in an 11-seater Mercedes van and Sh170,000 in a 14-seater Mercedes vehicle.

Apart from the hearse operated by funeral homes, low-income earners prefer to negotiate “welfare rates” with public transport vehicles to ferry the remains of their loved ones home for burial.

Under the welfare rates, a minibus charges about Sh60,000 to transport a body from Nairobi to Kisumu, a 14-seator Sh30,000 and a school Sh50,000 to cover the same distance.

The construction of the Lamu port which begins next month is also expected to further boost domestic air cargo volumes.

Key personnel such as engineers and consultants are expected to access the port project site via the newly expanded and refurbished Manda Airstrip.

Source: Business Daily