Red Star Boss Identifies Major Challenges Facing Nigerian Air Cargo Industry

Samuel Mobolaji

The Group Managing Director/Chief Executive of Red Star Express, Mr Auwalu Babura, has identified major challenges affecting Nigerian air cargoto include fluctuations in aviation fuel price, regulatory bottlenecks with high cost of ground handling equipment among others

Speaking extensively on ‘Airport Operational Constraint to Cargo Logistics’ Mr Bubura, also noted that poor airport infrastructure, lack of economies of scale extremely high Insurance premiums, high taxes and cost of operations were some of the factors also affecting the growth of cargo business in the country.

According to Bubura, Nigeria requires 5 billion USD to fix infrastructure in 24 airports and 30 trillion USD over 30 years to modernize economic infrastructure

As part of recovery path for air cargo industry in the country, he said there was an urgent need to deepen cargo traffic across other cargo and passenger airports and to re-negotiate Bilateral Air Service Agreement with UK and UAE Airports and Terminals for Nigerian Airlines.

On government intervention the Red Star boss said Nigeria Air freight Market can scale through E-commerce, Cross-Border shipping, Direct Currency settlement and no Duties for Small items.

He called for the development and deepening specialized temperature control storage and processing warehouses for Pharmaceuticals and Agro Perishables.

He fiuther called for subsidies to be given to airlines and Cargo Handlers who do not have enough Forex liquidity in their asset base to safeguard Jobs and Investments calling for tax reductions to be explored

He also called for government intervention for freight forwarders who drive and contribute to Freight Traffic Kilometres exports to have access to foreign exchange to international settlement of partners

“The Airline Cargo Industry encountered Black Swans such as the Covid 19 Pandemic. This has led to delivery delays, congestion, and higher freight rates.

Based on Research, it takes at least 5 years for the industry to recover after a Negative Event. “Approximately 72 per cent of the impact of the initial shock persists one year after the event.”

Bubura concluded by saying that by freight forwarding market, including airfreight, was expected to reach S178 billion.