Industry calls on government to extend aviation funding

charters aviation

The Freight & Trade Alliance has asked Trade Minister Dan Tehan to consider a contingency plan for the aviation sector because of the rapid spread of the Omicron variant.

Aviation has been one of the hardest hit sectors by the COVID-19 pandemic. Around 80 per cent of Australia’s air cargo volume is usually moved in the belly of a passenger aircraft.

With dedicated freighter aircraft operating at capacity, airlines are increasingly deploying passenger aircraft for freight purposes and have initiated some new freight only services.

The FTA says freight forwarders have also initiated chartered services utilising what would otherwise be idle passenger aircraft. Air freight costs have substantially increased without the cross-subsidisation and demand of passenger traffic.

The Australian Trade and Investment Commission’s International Freight Assistance Mechanism (IFAM) has facilitated continuation of access to global markets for Australian exporters and importation of time-sensitive goods, industry says.

“Our alliance commended the Federal Government’s announcement on 27 August 2021 to extend IFAM until mid-2022,” FTA says. “At the time of the announcement, with the vaccine rollout well on target and in anticipation of a significant uptake in travel generating additional belly space availability for cargo movements, this seemed to be a logical end date for this important financial relief measure.”

“That was prior to the arrival and rapid global spread of the Omicron variant of COVID-19 that has again generated considerable uncertainty for the airfreight market for the foreseeable future. A recent example is Cathay Pacific who has announced there will be substantial reductions to their cargo long-haul freighter capacity, including to Australia and New Zealand, in the first quarter of this year.”

The Cathay Pacific announcement is attributed to the latest aircrew quarantine measures imposed by the Hong Kong SAR Government due to rising Omicron case numbers.

The FTA says the response is likely to have a significant effect on supply and consequently rates.

“Whist we hope that the Omicron outbreak will soon peak in Australia and other key overseas markets, we urge the Federal Government to make contingency plans with appropriate budgetary considerations to continue IFAM, on a needs basis, post the scheduled termination in mid-2022.”

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