AIR CARGO TRADE GROWS AS AIRLINES EXPAND SERVICE BETWEEN

UNCLAS SECTION 01 OF 02 PRETORIA 001135 SENSITIVE BUT UNCLASSIFIED SIPDIS DAKAR FOR FAA REP MO KEANE FAA FOR NANCY ANGELO DEPT FOR EEB/TRA ROME FOR TSA REP ANTHONY GIOVANNIELLO E.O. 12958: N/A TAGS: EAIR ECON EINV ETRD SOCI SNAR SF SUBJECT: AIR CARGO TRADE GROWS AS AIRLINES EXPAND SERVICE BETWEEN U.S. AND SOUTH AFRICA REF: A. 09 PRETORIA 333, B. 09 PRETORIA 129 This cable contains company proprietary information. ¶1. (SBU) Summary. Charge La Lime hosted a lunch on May 14 for Delta officials and representatives of the Commercial, Consular, Economic, and Management sections of the mission. Delta Southern Africa General Sales Manager Margaret Copeland and outsourced Cargo Manager Anne Sanders provided an update on cargo volumes and security issues related to Delta's South Africa operations. Copeland was pleased with cargo volumes on its South African services and noted that Delta has had to upgrade its aircraft to deal with baggage and cargo demands on its new Nigeria service. She cited improvements in baggage and cargo security measures at South African airports, but thought there was significant room for improvement of crew screening procedures. Increased air service between Africa and the U.S. will allow countries in the region to take better advantage of the trade promotion incentives provided by the U.S. (See Septel for discussion of Delta's expansion strategy in Africa and an update on the impact of the global economic crisis on Delta's passenger volume growth). End Summary. ¶2. (U) Charge La Lime hosted a lunch on May 14 for Delta Southern Africa General Sales Manager Margaret Copeland and Delta Cargo Manager Ann Sanders. Representatives of the Commercial, Consular, Economic, and Management sections of the mission also attended the luncheon. -------------- CARGO VOLUMES DOING WELL -------------- ¶3. (SBU) Copeland was pleased with cargo volumes on Delta's Johannesburg and Cape Town services to Atlanta. Sanders explained that because of altitude-related weight restrictions, the flight from Johannesburg is limited in the amount of cargo it can carry. This is not a concern for the Cape Town flight since that starts closer to sea-level. Delta carries some cargo for U.S. courier services such as UPS, but that business is a small percentage of their operations since most U.S. couriers do not have hubs in Atlanta. Sanders said Delta was now also getting business from the U.S. Embassy community. Delta is carrying the Embassy's unaccompanied baggage. 
¶4. (SBU) Sanders said 60 percent of the outgoing cargo volume on the Johannesburg flight was composed of stuffed hunting trophies. The majority of cargo on the Cape Town flight consisted of perishable goods such as fruit, flowers, and both fresh and frozen fish. Products such as ink bottles and wine taps (for cardboard wine dispensers) were also transported in large quantities from Cape Town. She noted that automotive components such as catalytic convertors were usually sent via maritime cargo, but occasionally Delta receives large shipments in Johannesburg for U.S. auto manufacturers who have adjusted their inventory strategy to a just-in-time inventory approach due to the global economic slowdown. Textile products from Lesotho and Mauritius are also transported to the U.S. on the Johannesburg flight. ¶5. (SBU) Sanders explained that the final destination for incoming cargo on the Delta flights is for the South African market. In comparison, most of the incoming cargo on South African Airways (SAA) is destined for other countries in the South African Development Community (SADC) region because of SAA's regional air QDevelopment Community (SADC) region because of SAA's regional air network. Major cargo shipments from the U.S. include high-end products such as pharmaceuticals. -------------- ADAPTING SERVICE -------------- ¶6. Copeland explained that Delta has already had to upgrade the aircraft for its new direct service to Nigeria to deal with cargo and passenger luggage demands. Shortly after launching the service, a passenger arrived at the Delta ticket counter in Lagos with 125 suitcases. Delta had to send an additional plane to accommodate this additional demand and charged $55,000 in excess baggage fees. She also explained that stowaways at its hub in Dakar and other smaller airports in Africa were a cause for concern due to the lack of adequate fencing at these airports. The vast majority of the stowaways died after being crushed to death in the external wheel compartments by the contracting wheels after take-off. PRETORIA 00001135 002 OF 002 -------------- BAGGAGE AND CARGO SECURITY CONCERNS -------------- ¶7. (U) Post inquired about the status of cargo and baggage security upgrades at the Airport Company of South Africa (ACSA),which runs all of the international airports in the country. Copeland and Sanders said Delta enforced a 100 percent screening policy for its cargo, but agreed that passenger baggage theft has historically been an area of concern at the ACSA airports. Copeland explained that the use of subcontractors had been one of the major causes of baggage theft and the use of shrink-wrap did not reduce theft. Equity Aviations, which used temporary staff and subcontractors, has lost its ACSA permit. Baggage handling companies are now required to hire permanent staff to receive an ACSA permit, which has reduced baggage theft. ¶8. (SBU) Sanders stated that drug trafficking has also been a concern at the airports. Delta screening has found marijuana in cargo destined for Miami. Delta notifies the South African Revenue Service and other appropriate authorities whenever this occurs. Sometimes the authorities let the cargo proceed to see where it winds up in order to follow-up at the final destination. Post also inquired about status of the additional security measures instated after two SAA crews were detained in the UK for drug smuggling (Reftels A and B). Copeland believed that SAA crew screening was still inadequate to deal with the drug trafficking threat. -------------- STATUS OF AIR MARSHAL AGREEMENT -------------- ¶9. (SBU) Post informed Copeland that progress on implementation of the Transportation Security Administration (TSA) Air Marshals Agreement has been slow. Agreement has been reached on the text of the memorandum of understanding. However, administrative delays at the South African Department of Transport (DOT) have held up the signing on the South African side. Implementation can only begin after the DOT Director General signs the final agreement. -------------- COMMENT -------------- ¶10. (U) Increased air service between Africa and the U.S. allows countries in the region to take better advantage of the trade incentives provided by the African Growth and Opportunities Act (AGOA),which allows exports from the region to enter the U.S. market virtually free of tariffs. Trade in perishable products and manufactured products for just-in-time inventory needs is expected to increase as a result of Delta and SAA's recent Africa-wide service expansions and aircraft upgrades. Security will remain a concern as air traffic and cargo movements continue to increase between the U.S. and Africa. LA LIME