Regional Pulse: Tourism returns to Australia but cargo capacity slow to follow

While Australia’s borders reopened Feb. 21 for tourist travel, the increase in belly capacity may not be enough to supply current demand, airfreight stakeholders say. Australia’s borders closed to tourism in 2020, and since then it has been difficult to transport goods to and from the country, Jan Kleine-Lasthues, chief operating officer of airfreight at Hellmann Worldwide Logistics, told Air Cargo World . “At present, we predominantly offer connections via transit points such as Hong Kong or South Africa,” Kleine-Lasthues said. “Since there are no direct connections, freight rates are extremely expensive, which is why we currently mainly transport high-value goods such as pharmaceuticals. Once the borders are open again, we expect that soon we will be able to offer our customers more solutions at better rates again.” Likewise, demand for e-commerce and automotive-related shipments into Australia continued to increase throughout 2021, a Geodis spokesperson told Air Cargo World . The spokesperson further noted that demand into the Pacific region remains elevated and is being serviced through the forwarder’s scheduled charter operations between Kuala Lumpur (KUL) and Sydney (SYD). Despite the return of some belly capacity from passenger flights, main manufacturing hubs will most likely still face capacity shortages, while capacity constraints from China and Hong Kong to Australia will continue, they added. Meanwhile, demand for perishable movements has also remained constant, an Etihad Cargo spokesperson told Air Cargo World . They further noted that it has been especially challenging to meet the elevated demand for chilled meats from Australia into the Middle East and Europe. Carriers ramping up operations Sydney-based Qantas is among the carriers exploring different options for increased passenger operations. On Feb. 16, Dallas Fort Worth International Airport (DFW) welcomed back Qantas for the first time since 2020, according to a LinkedIn post last week . Qantas International CEO Andrew David noted that bookings between Australia and DFW more than doubled after the Australian government announced that borders were reopening for tourists, according to an airport release. The passenger route, which is part of a codeshare agreement with American Airlines, will operate thrice weekly between DFW and SYD. Looking forward, the carrier is reviewing its schedules to determine whether it can restart flights from international destinations sooner, or add capacity to routes that are already flying, a Qantas spokesperson told Air Cargo World . Etihad Cargo, which has continued to operate passenger freighters since March 2020, will be increasing the frequency of its passenger services between Abu Dhabi, Melbourne (MEL) and SYD to 14 weekly flights starting March 27, according to Etihad’s LinkedIn post last week . The additional flights will be operated with 787 aircraft and will increase cargo capacity between Abu Dhabi and Australia by roughly 240 tonnes per week, according to the spokesperson. Despite the capacity recovery, the spokesperson noted that global capacity is still below pre-COVID levels and the capacity supply will still be less than the demand. Australian capacity outlook Prior to the pandemic, roughly 90% of Australian airfreight was carried in the bellies of passenger aircraft, according to Frederic Horst, managing director of Air Cargo World affiliate Cargo Facts Consulting. While some of that lost capacity has been replaced by additional freighter flights or cargo-only passenger flights, capacity is still below 2019 levels. To help combat the challenges, the Australian government launched the International Freight Assistance Mechanism scheme to help subsidize the cost of airfreight for Australia-based exporters, which since then has been extended a few times and will remain in place until mid-2022. “As travel opportunities for Australians have opened up, some of this passenger-freighter capacity has been wound back and replaced with normal passenger capacity,” Horst said. “Singapore Airlines has been operating quite a few more flights into Australia and with the opening on Feb. 21, at least those countries that are open themselves will add capacity as well.” While additional flights may help with the capacity crunch, Horst noted that he doesn’t expect a rush of capacity to return to the market as it took a whole year for the Australian domestic market to get to 75% of 2019 levels. The Air Cargo Tech Summit, the new airfreight logistics event presented by Air Cargo World , will take place LIVE in Miami from June 6-7. Learn more and register here.

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