Mr BONSON - 2002-10-09
Can the minister inform the House on recent events regarding the air freight capacity out of Darwin?
ANSWER
Madam Speaker, I thank the member for Millner for his question. It is a question that is relevant not only to my Department of Primary Industry and Fisheries, but also for the small business and business community generally in the Northern Territory.
A couple of weeks ago we had Qantas announcing that it was going to significantly reduce the number of wide bodied planes that they were placing on their routes from Darwin to Sydney, Darwin to Brisbane and were going to reduce by 10 the number of 767s on those routes and replace them with 737s. With that move, they were going to increase passenger capacity, but what they did not factor into that decision was the dramatic reduction it would have in freight capacity out of Darwin, particularly at this time of year for our primary industry producers trying to get product into the market place in Sydney. The effect of that planned change in planes was essentially going to lead to a 49 000 kg a week freight capacity reduction from Darwin, which really would have created a fair amount of havoc and potentially even put some of our smaller producers out of business.
What we are seeing at the moment with the primary industry sector in the Northern Territory; what is happening with the growth of our produce, particularly coming from the Katherine/Daly region with increased aquaculture capacity, the commercial fishing industry increasing, is that we have to get our products into the market place. When we are talking about ultra-fresh produce, the only way to do that is via air capacity.
We see that at the moment it is passenger capacity which is driving yield, and that is where the airlines are at this point in time. We cannot look at it in isolation from September 11 and the Ansett collapse. A number that was brought to my attention a few weeks ago is that the international aviation industry has lost $US10bn worth of its market capitalisation in 12 months. That can only impact globally and we are not immune from that.
I recently had the pleasure of opening AusExport, a new seafood exporting business set up by Chris Weishaupt, and that was a fantastic facility, but he is looking to get his fish into the market place in Sydney as well as overseas. Certainly, the talk around that opening was that freight was the single biggest issue.
Negotiations I managed to achieve with Qantas management in Sydney was to reverse nearly 50% of that decision; they have put an additional three flights back on. We restored 21 000 kilos of the capacity that they were going to take out, and certainly making them very aware that it is not just passenger loadings they need to be considering when making scheduling and plane type decisions into and out of the Northern Territory, they also have to look at the freight side of the equation. They have agreed to formally work with us prior to making any such decisions that will impact on freight in the future.
The broader issue here is that we have to get additional services into the Northern Territory. We have to increase competition, restricting the cabotage provisions to allow international carriers to collect freight and passengers in Darwin on the way through to southern ports. I have raised the issue on two occasions now with the federal Transport Minister. I have had no reply, unfortunately. I have also raised the issue with the federal Tourism Minister who agreed that it was an issue and something that we need to look at.
I believe that if we were to very carefully look at our obligations under World Trade Organisation principles and obligations that Australia has, as well as National Competition Policy principles, an open skies policy and allowing those international carriers to make a business decision as to whether to land here or not is something that we should be doing.
Madam Speaker, it is ongoing. We are very hopeful within the next week to be able to announce our Aviation Executive Officer who will work with us, industry and the airport to really up the ante with the airlines in terms of crunching the numbers that can prove to the airlines that there is a viable and profitable business in terms of flying to the Northern Territory. I was pleased that Qantas did heed the call and replace some of that reduced capacity. We as a government and myself as a minister will continue to fight for small business in the Northern Territory.
Mr STIRLING (Leader of Government Business): Madam Speaker, I ask that further questions be placed on the Question Paper.
ANSWER
Madam Speaker, I thank the member for Millner for his question. It is a question that is relevant not only to my Department of Primary Industry and Fisheries, but also for the small business and business community generally in the Northern Territory.
A couple of weeks ago we had Qantas announcing that it was going to significantly reduce the number of wide bodied planes that they were placing on their routes from Darwin to Sydney, Darwin to Brisbane and were going to reduce by 10 the number of 767s on those routes and replace them with 737s. With that move, they were going to increase passenger capacity, but what they did not factor into that decision was the dramatic reduction it would have in freight capacity out of Darwin, particularly at this time of year for our primary industry producers trying to get product into the market place in Sydney. The effect of that planned change in planes was essentially going to lead to a 49 000 kg a week freight capacity reduction from Darwin, which really would have created a fair amount of havoc and potentially even put some of our smaller producers out of business.
What we are seeing at the moment with the primary industry sector in the Northern Territory; what is happening with the growth of our produce, particularly coming from the Katherine/Daly region with increased aquaculture capacity, the commercial fishing industry increasing, is that we have to get our products into the market place. When we are talking about ultra-fresh produce, the only way to do that is via air capacity.
We see that at the moment it is passenger capacity which is driving yield, and that is where the airlines are at this point in time. We cannot look at it in isolation from September 11 and the Ansett collapse. A number that was brought to my attention a few weeks ago is that the international aviation industry has lost $US10bn worth of its market capitalisation in 12 months. That can only impact globally and we are not immune from that.
I recently had the pleasure of opening AusExport, a new seafood exporting business set up by Chris Weishaupt, and that was a fantastic facility, but he is looking to get his fish into the market place in Sydney as well as overseas. Certainly, the talk around that opening was that freight was the single biggest issue.
Negotiations I managed to achieve with Qantas management in Sydney was to reverse nearly 50% of that decision; they have put an additional three flights back on. We restored 21 000 kilos of the capacity that they were going to take out, and certainly making them very aware that it is not just passenger loadings they need to be considering when making scheduling and plane type decisions into and out of the Northern Territory, they also have to look at the freight side of the equation. They have agreed to formally work with us prior to making any such decisions that will impact on freight in the future.
The broader issue here is that we have to get additional services into the Northern Territory. We have to increase competition, restricting the cabotage provisions to allow international carriers to collect freight and passengers in Darwin on the way through to southern ports. I have raised the issue on two occasions now with the federal Transport Minister. I have had no reply, unfortunately. I have also raised the issue with the federal Tourism Minister who agreed that it was an issue and something that we need to look at.
I believe that if we were to very carefully look at our obligations under World Trade Organisation principles and obligations that Australia has, as well as National Competition Policy principles, an open skies policy and allowing those international carriers to make a business decision as to whether to land here or not is something that we should be doing.
Madam Speaker, it is ongoing. We are very hopeful within the next week to be able to announce our Aviation Executive Officer who will work with us, industry and the airport to really up the ante with the airlines in terms of crunching the numbers that can prove to the airlines that there is a viable and profitable business in terms of flying to the Northern Territory. I was pleased that Qantas did heed the call and replace some of that reduced capacity. We as a government and myself as a minister will continue to fight for small business in the Northern Territory.
Mr STIRLING (Leader of Government Business): Madam Speaker, I ask that further questions be placed on the Question Paper.
Last updated: 09 Aug 2016