ENSURING the ongoing viability of aviation freight justifies the extension of International Freight Assistance Mechanism until the end of 2021, Freight and Trade Alliance co-director Paul Zalai says.
In a submission to the Joint Standing Committee on Foreign Affairs, Defence and Trade, Mr Zalai, whose FTA manages the Australian Peak Shippers Association, also argued for the extension of JobKeeper or similar financial relief measures to support the air cargo supply chain sector.
Noting aviation had been hard hit by the pandemic, Mr Zalai said about 80% of Australia’s international air cargo volume was usually moved in the belly of 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,” he said.
“This has been complemented by freight forwarders who have also initiated chartered services utilising what would otherwise be idle passenger aircraft.”
Air freight costs, the submission noted, had substantially increased without the cross-subsidisation and demand of passenger traffic.
“While industry has been proactive, continuity of service could not have been sustained without the combination of federal government initiatives being the International Freight Assistance Mechanism administered by the Australian Trade and Investment Commission, Cash Flow Boost and JobKeeper Payment schemes,” he said.
“The combined efforts of commerce and government has facilitated continuation of access to global markets for Australian exporters, importation of time-sensitive goods and has maintained residual Australian jobs in the aviation sector by keeping aircraft flying.”
Mr Zalai said FTA saw merit in the recent announcement of another $241.9m to continue IFAM until the end of the year.
“Aside from airlines, a focus is required on air cargo terminal operators, specialist transport operators, freight forwarders and customs brokers to maintain the supply chain’s business continuity,” he said.
Mr Zalai said standards could not be compromised as Australia could not afford an imported pest infestation that would hurt agriculture on top of a pandemic.
“Our advocacy position is that the federal government should allocate additional funds to maintain the IFAM, JobKeeper and / or similar financial relief measures to support the air cargo supply chain sector until the end of 2021 (at minimum), with actual allocation of funds subject to periodic reviews pending the return of international passenger flight services,” he said.
Mr Zalai is to speak with the JSCFADT during a public hearing on 30 July 2020.