Air NZ wants to help Cook Islands boost exports
Air New Zealand wants to help the Cook Islands export more to New Zealand and asks local producers to start a dialogue.
The company’s global freight sales director Alex Larsen said he was “more than interested” in speaking to those looking for export opportunities.
“We are flying full,” he said.
“Our philosophy is to supercharge the success of exporters. It’s not just that we’re interested in it, it’s actually why we’re (Air NZ cargo) here in the first place.
“I am convinced that if we engage with customers who are interested in exports and imports and the like, we will be able to find ways to design new solutions to meet the common interests of all,” he said. declared.
Larsen said that could mean sending goods from the Cook Islands to New Zealand and even other international markets.
“There is so much potential, but we have to talk to get there.”
Larsen said there was a trade imbalance in the Cook Islands, with more goods arriving in the country than leaving.
Airlines operate on the basis of supply and demand; if the demand is high and the supply is low, the freight is more expensive. When demand is low and supply is high, prices fall to stimulate demand.
This has been upset a bit with Covid-19 and that means Air New Zealand is receiving financial support from the New Zealand government so that cargo can still operate.
But Larsen said the imbalance still favors Cook Islands exports.
The airline proposed by Mike Pero, Pasifika Air, encourages the export of papaya. He thinks the reason it’s not being done now is because air freight is too expensive.
But Pero said his airline would be cheap enough to make exporting a worthwhile business venture at around $ 3 a kilogram. He said other airlines were charging $ 9 per kg.
Larsen said Air New Zealand would be more than happy to help facilitate any export industry. He said the Pero export prices he mentions for other airlines were incredibly high and did not reflect what Air New Zealand charges.
“It’s hard for me to say the price is X because it changes depending on the product and the volume of cargo that customers are sending,” said Air NZ’s global freight sales manager.
Expensive merchandise with the same gross weight and volume will be more expensive to ship, while less expensive merchandise will be less expensive to ship. Larsen said if a commodity sells in the supermarket for $ 3 or $ 4 per kg, Air New Zealand will never charge $ 6.
Freight cost is also calculated by volume and gross weight. The larger of these two will be what the exporter is billed for.
Freight forwarders are the middleman between the exporter and Air New Zealand, and Larsen said he wanted a dialogue between the parties.
“If we can reduce the total cost of market access for exporters, if we have the capacity to do it, the flexibility to do it in our business, and therefore we can put more things on the planes, we we benefit, the importer benefits, the exporter benefits. “
He said freight costs had increased due to the pandemic.
Larsen also said that trans-Tasman freight prices have traditionally been slightly lower than those between the Pacific Islands.
Since May of last year, the New Zealand government has supported the airline through the International Cargo Connectivity Program.
The subsidy was put in place so that cargo could still fly without passengers due to Covid-19.
It has become the program for maintaining international air connectivity that came into play this month and will run until at least October, possibly next year.
Rarotonga was part of the program and still is despite the resumption of regular flights.
Larsen said passengers traveling to and from Rarotonga made up for the subsidy, until the subsidy was eventually zero.
“It gives a natural exit,” Larsen said.
The requirements of the scheme mean that the priority for Air New Zealand is to reduce the subsidy to zero.
But he said that even with the priority of offsetting the subsidy, import and export prices could fall further.
“If capacity continues to grow faster than demand, the natural dynamics of the industry suggest that it is in our best interest to stimulate demand because we are not in the business of flying empty planes,” said Larsen said.
- Caleb Fotheringham in Auckland