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Saudi Cargo bullish on Africa, will turn to Americas next year

By Hpanchal on August 1, 2011

Saudi Cargo is in expansion mode.

Late last month, officials at the slowly growing carrier pushed their existing thrice-weekly services to Johannesburg up to daily offerings. The airline also increased routes to four other locations in Africa, at once highlighting Saudi’s continued commitment to Africa and its determination to expand throughout the world. Saudi now has services into Johannesburg, Lagos, Chad, Sudan and Bole, Ethiopia.

“Africa — that’s what’s really driving a lot of our growth right now,” said Michael Basoco, Saudi Cargo’s regional sales director, Americas. “The demand is matching the supply nicely. It’s growing at a nice pace as well. The scary part is when everybody starts flying in there, it throws off the equilibrium.”

According to Basoco, Saudi freighters returning from Africa are loaded down with everything from perishables to machine parts. Lagos is a big destination for oil and gas supplies, while imports to the rest of the country could span every sector.

“All these locations, as developing countries with a growing middle class, they’re wanting everything,” he said. “It’s the next big frontier.”
Saudi added a third frequency out of Houston’s George Bush Intercontinental Airport on July 15, and the carrier is also planning to expand further into the Americas next year, Basoco said. Basoco adds that new services to South America and Latin America are in the carrier’s “mid- and longer-term plans.”

The expansion moves — plus a recent addition of B747 freighters — reflect Saudi’s current economic outlook. To illustrate how well the carrier has been faring in what is still an uncertain market, Basoco points to June’s revenue totals. Saudi ended the month with the highest monthly revenue since it started tracking that type of data three years ago. He added that revenues, tonnage and yields are all trending up.
While the outlook is sunny for many of its trade lanes, Saudi still feels the crunch in a few regions. “We’re feeling the pain in certain lanes,” he said. “There’s definitely softness in parts of the world, but in aggregate, we’re very strong.”

One outcome of this substantial growth and acceleration to the top of the market might be respect. Basoco wants customers — and competitors — to get rid of the old Saudi image of a sleepy, government-owned carrier that didn’t make much of a splash on the international market. According to Basoco, Saudi is a “modern, professional, commercially poised organization that’s interested in growing the business.”

If Saudi’s gamble to name Africa as “the next big frontier” keeps paying off, the airline certainly could become a major player in the cargo business.

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