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Air cargo connections continue in COVID-19 lock-down

International flights are still landing and taking off at Auckland Airport, but it’s cargo space in the belly of planes rather than passengers that’s providing a vital economic connection.

In the next four weeks, around 80 new flights of freight-only passenger planes are scheduled to land at Auckland Airport, in addition to the 20 dedicated freighters each week.

Flying with limited crew, the belly hold is filled with priority cargo, including medical supplies, pharmaceuticals and parcels coming into New Zealand, as well as respiratory equipment and fresh produce heading back out overseas.

Air has been the transport of choice for high value, time-critical goods. From gifts, airmail and online shopping orders, through to precious metals and gems, artworks and horses. Before the widespread outbreak of COVID-19, 86 per cent of New Zealand’s airfreight came through Auckland Airport.

This isn’t just about businesses in Auckland benefiting, says general manager aeronautical commercial Scott Tasker.

“The impact of well-functioning cargo connections flows right out into heartland New Zealand. Keeping our air cargo connections going to key international markets is really important and crucial for New Zealand’s economic fortunes – now and as the country works to rebuild from the impact of COVID-19.”

With the drastic fall in passenger numbers, airlines scrambled to reduce flights in order to preserve cashflow, he says.

“Those reductions have resulted in a massive cut in cargo capacity, from 25,000 tonnes in April 2019 to 15,500 tonnes in April 2020. If you take an average widebody plane, there’d generally have been around 320 passengers and 15 tonnes of cargo on board.

“There’s been a demand and supply issue, which has seen airfreight rates increase, but airlines have been quick at adapting to the changing market. What we’re seeing is our key airline partners converting to cargo-only flights using passenger aircraft or flights with limited numbers of passengers,” he says.

Currently Air New Zealand, Air China, Cathay Pacific, China Eastern Airlines, China Southern Airlines, Fiji Airways, Hainan Airlines and Korean Air are operating passenger aircraft with cargo-only loads to and from Auckland Airport.

Scott says maintaining bilateral airfreight connections to New Zealand would be an important part of our economic recovery.

“If we look back at figures from a couple of years ago, air freight accounted for $1 in every $5 of trade for New Zealand. At that time the average value of goods transported by sea was around $1200 per metric tonne. In comparison, the value of air freighted exports was $87,000 per metric tonne.”

He says New Zealand’s airfreight exports are weighted towards primary products – seafood, fruit and prepared foods – products still being produced by an industry considered essential under the Level 4 alert.

“Air cargo connections mean high value products can be delivered into markets where they can attract premium prices and enable producers to capture demand opportunities.

“A great example of this would be the export of fresh crayfish into the Chinese market. It’s a consumer group who values fresh, natural products and are prepared to pay a premium meaning seafood companies can potentially make better margins without lifting their quota.

“And it’s something you’ll see repeated across a range of products. Fresh milk can be worth four times as much as the same volume of whole milk powder and twice as much as UHT. Only 1 per cent of New Zealand’s beef and lamb exports travels by air, despite earning $10 per kilogram more than sea freighted product. Shifting a further 1 per cent more onto airfreight would add $90 million to export earnings.

“If you go back to the example of the average widebody plane, annually it would deliver $200m in tourism value but $260m in export cargo. As a country, we’ve talked for a long time about moving from a commodity-based economy to one that delivers high-value or value-added products and airfreight is a critical part of that shift.”

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