Prices soar on airfreight

Wednesday July 01, 2020 Written by Published in Economy
Air NZ will this week begin flying bigger Boeing 787-9 jets into Rarotonga. 20063018 / 20063019 Air NZ will this week begin flying bigger Boeing 787-9 jets into Rarotonga. 20063018 / 20063019

Household consumers are paying the prices for dramatically increased charges on airfreighted food and other goods. 

Local consumers are bearing the brunt of a sharp increase in freight charges from Air New Zealand.

The airline said the cancellation of 95 per cent of their international capacity and the need to fly dedicated cargo-only services had led to an increase in cargo rates worldwide.

In Cook Islands, supermarkets are being forced to increase the prices of some of the perishable fruits and vegetables and dairy products that they air freight from New Zealand.

Daniel Forsyth, the owner of Prime Foods supermarket, said freight charges jumped by about 250 per cent in early April after the cancellation of flights in late March due to Covid-19.

Prime Foods orders perishable fruits and vegetables and dairy products on a fortnightly basis.

“Well, we are not making much money on these items. Initially we were bringing goods by airfreight on weekly basis but we can’t afford that anymore. The problem is when we order less we have to pay more in freight charges,” Forsyth said.

“Since the country opened the borders to Cook Islanders and those with work permit and there are some passengers coming through, we have noticed a decline in freight charges but we are still paying about 80 per cent more than what we used to normally pay.”

Forsyth said they were buying fruit and vegetable produces from Rarotonga and the outer islands in a bid to minimise the import of such items from New Zealand.

Private Sector Taskforce chair Fletcher Melvin said the increase in freight charges would inevitably be handed on to consumers.

Melvin, who has been campaigning for a travel bubble between New Zealand and the Cook Islands, said passengers had hugely subsidised flights coming to Rarotonga.

“I think people always realised there would be increase in freight charges and inevitably the prices (of goods) would rise because of that. I think people should look at sea freight as an option during this time.”

Air New Zealand spokesperson Anna Cross warned the freight situation would not revert to the way it was pre-Covid, unless and until the airline had the same volume of international passengers.

The freight market had changed considerably over the past three months and the airline was working in a different demand environment, Cross said.

She hoped these cargo operations would be short-term, and “in time we’ll be able to revert to our traditional model as demand for passenger travel begins to pick up”.

Air New Zealand has confirmed they will now be operating one Boeing 787-9 Widebody Dreamliner aircraft to Rarotonga under the International Airfreight Capacity agreement each week.

“This will increase air freight in and out of Rarotonga by almost six times when compared to the current A320 narrow body aircraft being used,” said Cross.

The airline was pleased to be working with the New Zealand Ministry of Transport on the International Airfreight Capacity agreement to ensure that important trade routes remain open, she said.

“While the current market pricing is elevated from pre-Covid-19 levels, it is workable for the vast majority of the New Zealand exporters, importers and freight forwarders we work with and the feedback from the market has been overwhelmingly positive.

“Customers understand and appreciate the fact that cargo pricing was heavily subsidised under the traditional model when it was flying in the bellies of passenger aircraft.

“They also appreciate how the support provided by the government’s airfreight capacity scheme is making a significant difference in assisting to provide affordable price levels.”

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