The air cargo industry in the Gulfshould not be complacent despite itssoaring growth, Des Vertannes, who lastmonth joined Etihad as head of cargofrom his previous employer Gulf Air,told the recent World Air Cargo Eventin Dubai.
Despite eye-popping levels of investments- some $30bn in aviation-relatedinfrastructure and a world-leading$60billion in outstanding aircraft orders- the region still faced significantchallenges if it was to sustain the opportunitiesand benefits from the currentgrowth phase, he warned.
For example, not all of the airportinvestments in the region were takingenough account of cargo. "Someairports are doing enough, but othersare falling behind," he said.
He put Bahrain in the latter category."I have seen the Bahrain master plan and it is magnificent, but it is all passenger-focused. They have now started looking at the needs of cargo, but this should have been done in tandem with the passenger plan."
He also pointed to shortcomingsin road feeder services in the region,including a lack of roller-bedded trucksoutside the UAE, and the fact that servicessometimes ended well short of theairports they were supposed to serve."At one location in Saudi Arabia, forexample, we are delivering to a facility60 miles from the airport," he said.
Having said that, Vertannes predictedthat regional trucking – withfull truckload and less than truckloadservices of the kind seen in Europeand the US – would soon blossom asthe Gulf Cooperation Council’s singlemarket was put into effect.
Much progress had been made onthe single market, even though it wasbehind schedule: "It was supposed tobe completed in 2007 and we are nowin 2007 and there are still some barriers.Tariffs have been standardised and duties are collected at the first point of entry, but inconsistencies remain in the documentation needed by each country."
Meanwhile, monetary union, duefor 2010, had been delayed becausesome states were not ready. It wasimportant to complete these steps inorder to boost intra-regional trade,Vertannes said.
"A successful single market requirestrading between its member states – thisis true of the European Union andNAFTA – but in the GCC countries in 2004, the latest year for which figures were available, intra-regional trade was only 4.3 percent of total trade."
Vertannes also called for the region’sair cargo companies to do more toembrace new technology, pointingout that only two airlines in the regionwere involved in the IATA MessageImprovement Program, and no airlinein the region was taking part in an efreightpilot.
"At least we are making a start onCASS and I would like to see rapidprogress on this. But if we don’t getour act together on IT and e-trade, thegrowth opportunities we currently seewill be frittered away," he said.
Despite these reservations, Vertannesalso noted that many wider geopoliticalfactors were in the region’s favour. Henoted that half the population of theregion was under 24, pointing to significantpopulation growth to come, andthat between now and 2050 most populationgrowth in the world is forecastto be in developing countries, many ofthem close to the Gulf region.
"The balance of world trade will shiftto the east, and the Indian Subcontinent,the CIS countries, the GCC andEast Africa will all see drastic increases,"he predicted.
"So there is a great opportunity in this industry, but let us not waste it. Let us engage and see if we can sustain the benefits. We have got to act, but we have got to act collectively. No part of the industry will thrive unless we all work hard to drive the pace of change."