Dnata Cargo, the freight handling service provider at Dubai International Airport, is putting the brakes on part of its business because of capacity constraints, a senior official has revealed.

The company is slowing the growth of its handling service for charter operators at its facilities at Dubai Airport Free Zone.

"The capacity at the moment is insufficient for us to take on more customers," Senior Vice-President Jean-Pierre De Pauw told Emirates Business. "We are deliberately slowing down the growth of the freight charter service to enable us to effectively utilise our facilities."

Dnata Cargo serves charter operators through its freight gates three and four but has been facing capacity issues due to increasing demand. The gates were built in the late 1990s specifically to serve charter operators from the Commonwealth of Independent States (CIS). The CIS carriers' most lucrative destinations then were Afghanistan and Iraq.

"An acute shortage of parking space for carriers at the airport is causing serious concerns," said De Pauw. "When there are many planes in the queue it costs charter operators a lot of money in terms of hourly landing charges, which are not favourable to business."

He said the growth of the service had outgrown Dnata's initial estimates and the facilities could not cater for the increasing demand.

"We will not be taking on more customers for this service until we find spare capacity," added De Pauw.

Dnata Cargo is experiencing an average 15 per cent growth through its other six freight gates, which still have capacity available. The handling capacity at freight gates one and five has doubled following investment in expansion programmes.

Out of the total 700,000 tonnes handled by Dnata Cargo every year the charter business contributes 80,000 tonnes – about 11.5 per cent of the total.

Dnata Cargo, which operates in seven countries and 17 airports, is expecting a slump in its cargo volume and revenue growth this year compared to 2007 due to high oil prices. But it hopes to exceed the overall airfreight industry forecasts.

Cargo volumes grew by 18 per cent last year compared to 2006 but the company expects growth to slow to five per cent this year. The International Air Transport Association predicts that the global growth for airfreight in 2008 will fall to four per cent compared to 4.5 per cent last year. Sea and road services have become more attractive to shippers because of high airfreight rates – but Dnata Cargo has no plans to venture into other modes of transport.

The introduction of faster ships, low sea freight rates, improved security and service levels as well as increasing vessel capacity are luring shippers away from airfreight to sea transport.

"Air cargo is our core business area and we will stick to that because we hope the situation will normalise," said De Pauw. "We hope to grow in line with Dubai's growth."

The company and Kuwait's Agility have a 50-50 joint venture, Dnata-PWC Airport Logistics (Depal), which provides inter-airport transport and logistics services in the region.

Depal operates from the Dubai Cargo Village and uses the Dnata road network to provide air cargo operators with a feeder service between airports and give airlines a wider choice of off-line routes.

De Pauw said he expected road freight to grow across the region if customs restrictions at border points in some countries were relaxed to allow the free movement of goods.

Dnata plans to handle an addition 50,000 tonnes of freight next year when it commences operations at the cargo terminal at Al Maktoum International Airport, which is currently under construction at Jebel Ali.

The company is in the process of launching a portal dedicated to air cargo.