REGULATION of air freight services between Australia and Papua New Guinea (PNG) has long been something of a challenge for authorities in both countries.
Rather oddly, given the traditionally strong trade and the strong growth in areas such as resource development and high-end perishables, an all-cargo capacity of 130 tonnes per week in both directions applies under the current air services agreement.
Cargo capacity to and from several of Australia’s other key trading partners – including New Zealand, China, US, UK, Singapore, Malaysia, UAE and Taiwan - has no limits other than regulatory approval of the operators’ status and ability to do the job.
In an October 2011 decision on an application by Air Niugini and Qantas to code share on the Port Moresby/Cairns route, PNG’s Independent Consumer and Competition Commission (ICCC) observed: “It is unclear what national interest objective is served by limiting freight capacity, which directly influences the level of trade between the two countries.
“By contrast, no such limitation applies to sea-borne trade. In an era of trade liberalisation, the rationale for such a constraint appears questionable.”
In a 2009 ruling on code sharing between Port Moresby, Sydney and Brisbane, the ICCC fretted that a negative ruling might see Air Niugini’s 767 off the routes, with not only a reduction in freight capacity but also the potential for an increase in freight rates.
And, as this magazine reported earlier, cargo loomed large when Australia’s International Air Services Commission (IASC) ruled on Port Moresby/Sydney/Brisbane code sharing in June this year, again focused on the 767: “The loss of the B767 aircraft as a result of the code share being rejected would be significant, both for Australian exporters and for PNG businesses reliant on Australian imports.
“While there is some dedicated freight capacity on the route, passenger carriers have the ability to offer air freight services at a lower incremental cost. Because of its ability to carry containerised and palletised cargo, the B767 is much more competitive with dedicated freight aircraft than the B737 and is therefore more likely to place downward pressure on freight rates, as well as provide substantial additional freight capacity.”
Currently, much of the freight movement between the two countries is aboard passenger aircraft – mostly belly-hold, with some small consignment traffic on jet-prop flights – and on ad hoc charters by the likes of Skyforce Aviation (www.skyforce.com.au) and the PNG-based Hercules freighter of Alaska’s Lynden Air Cargo (http://www.lynden.com/lyndenpng).
While in the past there has been a good deal of squabbling – as we have reported on many occasions – over the official capacity for Australian-designated all-cargo carriers on this route, some of the players have fallen by the wayside.
Currently the only capacity being fully utilised is by Pacific Air Express (www.pacificairexpress.com.au), with three B733 freighters weekly between Brisbane and Port Moresby.
Time to axe PNG cargo limits?
AC220 archive stories
Tuesday, 22 January 2013
REGULATION of air freight services between Australia and Papua New Guinea (PNG) has long been something of a challenge for authorities in both countries.
Rather oddly, given the traditionally strong trade and the strong growth in areas such as resource development and high-end perishables, an all-cargo capacity of 130 tonnes per week in both directions applies under the current air services agreement.
Cargo capacity to and from several of Australia’s other key trading partners – including New Zealand, China, US, UK, Singapore, Malaysia, UAE and Taiwan - has no limits other than regulatory approval of the operators’ status and ability to do the job.
In an October 2011 decision on an application by Air Niugini and Qantas to code share on the Port Moresby/Cairns route, PNG’s Independent Consumer and Competition Commission (ICCC) observed: “It is unclear what national interest objective is served by limiting freight capacity, which directly influences the level of trade between the two countries.
“By contrast, no such limitation applies to sea-borne trade. In an era of trade liberalisation, the rationale for such a constraint appears questionable.”
In a 2009 ruling on code sharing between Port Moresby, Sydney and Brisbane, the ICCC fretted that a negative ruling might see Air Niugini’s 767 off the routes, with not only a reduction in freight capacity but also the potential for an increase in freight rates.
And, as this magazine reported earlier, cargo loomed large when Australia’s International Air Services Commission (IASC) ruled on Port Moresby/Sydney/Brisbane code sharing in June this year, again focused on the 767: “The loss of the B767 aircraft as a result of the code share being rejected would be significant, both for Australian exporters and for PNG businesses reliant on Australian imports.
“While there is some dedicated freight capacity on the route, passenger carriers have the ability to offer air freight services at a lower incremental cost. Because of its ability to carry containerised and palletised cargo, the B767 is much more competitive with dedicated freight aircraft than the B737 and is therefore more likely to place downward pressure on freight rates, as well as provide substantial additional freight capacity.”
Currently, much of the freight movement between the two countries is aboard passenger aircraft – mostly belly-hold, with some small consignment traffic on jet-prop flights – and on ad hoc charters by the likes of Skyforce Aviation (www.skyforce.com.au) and the PNG-based Hercules freighter of Alaska’s Lynden Air Cargo (http://www.lynden.com/lyndenpng).
While in the past there has been a good deal of squabbling – as we have reported on many occasions – over the official capacity for Australian-designated all-cargo carriers on this route, some of the players have fallen by the wayside.
Currently the only capacity being fully utilised is by Pacific Air Express (www.pacificairexpress.com.au), with three B733 freighters weekly between Brisbane and Port Moresby.
