Airline Covid crunch affecting avocado exports

Air freight export of avocados was down 60 per cent in August compared to the year before, data from Auckland Airport shows.

August is the traditional start of the avocado export season, but air freight to Korea and Thailand were the hardest hit, with declines of 100 per cent and 31 per cent respectively.

Auckland Airport general manager aeronautical commercial Scott Tasker said it reflected the crunch in capacity to those markets.

“Cargo capacity between Auckland and Korea was down 44 per cent and 89 per cent through to Thailand. It looks like some of that has shifted across to sea freight, with a 15 per cent increase in avocados leaving Ports of Auckland and Ports of Tauranga,” he said.

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But spokesman for grower organisation Avoco Steve Trickett said air freight volumes were down largely because of the cost, which was up to four times higher than last season.

Avocados were competing with higher-paying cargo such as chilled seafood as airlines were “chasing revenue to survive”, he said.

New Zealand Avocado chief executive Jen Scoular said 90 per cent of avocados were shipped by sea, but air freight provided flexibility when demand ramped up or weather conditions slowed a harvest.

In normal times air freight could be locked in a day or two ahead, but due to border closures associated with coronavirus that was not possible this year.

“Air freight is severely limited and very expensive in this Covid environment.”

Due to a reduced Australian crop this year, New Zealand exporters were directing avocados across the Tasman, she said.

Trickett said sea freight rates were mostly the same as pre-Covid and securing space was manageable but schedules were unreliable and could delay delivery and compromise fruit quality.

Demand for healthy food like avocados was strong in all markets and while exporters would favour higher paying options like Australia, 10 per cent to 15 per cent of exports would go to Asian markets.

Last year more than 1200 tonnes of avocado were flown to Australia and Thailand, about 62 per cent of the avocados exported by air.

Sea freight was also commonly used to get avocados to Australia but air freight was used for markets further away, Tasker said.

“This mixed-freight strategy allows the fruit to arrive in top condition and capitalise on seasonal market peaks. It’s definitely harder to time the market when you’re planning longer lead times if you’re sending your crop via sea freight.”

Because avocados continued to ripen after they were picked and the process could be slowed with cool storage, shipping was an option, unlike for more fragile crops such as cherries and flowers, which relied on air freight, he said.

In August just 202 passenger flights carrying freight and 99 freight services came in to the country, compared to 237 and 106 respectively in July, a drop in capacity of 6 per cent.

Compared to August last year capacity was down 46 per cent, the data shows.

The airport is forecasting that international cargo capacity between September and November will be down 32 per cent and 42 per cent respectively from last year.

Capacity was expected to drop again in December as scheduled flights were likely to be cancelled if the lack of passenger demand due to border closures continued, Tasker said.

“Anecdotally we know continued low passenger numbers combined with a demand imbalance can make it commercially difficult for airlines to fly certain routes.

“The Government is providing critical financial support through its international air freight capacity scheme for some airlines on key routes but that doesn’t cover everyone. However, the recent decision to extend the scheme until the end of the summer peak season in March is welcome,” he said.