The impact of the Russian plane crash and the US’ decision not to allow freight on passenger flights travelling to the US had a limited impact on food export rates.
Food commodities accounted for 70% of total goods exported and transported by air including fresh vegetables and fruits, clothing, priority mail, computer parts, and high-cost medicines. The amount of freight transported in empty space on passenger aircraft accounted for 10% of all air freight according to air transport experts.
Former Chairman of the Federation for Private Aviation Hassan Aziz said there was a decline in the amount of goods transported via passenger planes following the US’ decision following the Russian plane crash in Sinai on 31 October 2015.
After loading passengers and bags into private aircraft, there is enough leftover space to accommodate approximately four pallets weighing four to twelve tonnes. This space was utilised to ship goods from Egyptian factories abroad until the US decision stopped this.
Aziz explained that food commodities represented 70% of such exports. He also noted that 80 aircrafts in EgyptAir’s fleet have been negatively impacted by these decisions and the volume of this impact is expected to be revealed by next November when the agricultural season that began in November 2015 comes to an end.
The US decision also negatively impacted services, which help grow economic activity and the local aviation industry, both private and public, according to Aziz.
He called on private airlines to cooperate with the ministries of Tourism and Aviation as well as the Tourism Activation Authority to break into markets that do not have air fleets and particularly countries in Eastern Europe.
Aziz predicted that solutions would be established for all economic problems faced by Egypt upon cooperating with the markets, at the forefront of which is the dollar crisis. Egypt suffered a severe dollar deficit following a decline in tourism and the global economic crisis. Moreover the decline in oil prices may cause Egyptian labour in the Gulf countries to be laid off.
Chairman of the Board of Directors of Tri-Star Shipping Captain Alaa Rahmy said that air transport is not significantly impacted by political events and emphasised that the Russian plane crash passed unnoticed in the commodity transport sector. He said political events or acts of terrorism do not end the need for food and beverages, which are the most common goods transported via air.
He pointed out that perishable food items are among the most transported via air, including beans, broccoli, bell peppers, and strawberries, which are currently in season. Other commodities such as potatoes, onions, and tangerines are often transported by sea.
Transport via passenger planes most often occurs on aircraft heading to far-off locations such as China and the US. On some aircrafts, about half to a third of total capacity allocated to passengers’ bags is empty. The aircraft can thus transport commodities in the empty space and bring in monetary returns.
Air transport prices have gone down by 20-25% recently and are likely to continue decreasing due to the global drop in oil prices, Rahmy said. The price of a barrel of oil has now fallen to $30 compared to $110 one year ago, helping to reduce the cost of operating an aircraft.
According to Rahmy, the cost of air transport ranges from $1-10/km depending on the distance travelled and the countries which the aircraft passes through. Each state the aircraft travels through imposes a specific fee and the total cost is calculated before the trip begins and a contract is signed.
Chairman of the Air Transport and Aviation Committee at the Federation of Chambers of Industry Tariq Darwish played down the impact of the Russian plane crash and subsequent decision to suspend shipments on passenger planes travelling from Cairo to New York and Canada. He said the implications of these measures lasted no longer than three weeks and that freight traffic on passenger planes has returned to normal.
However some stations have still suspended transport, Darwish said and that fresh fruits, vegetables, fish, honey, and white cheese are among the most important goods shipped via air. Food commodities, particularly fruits and vegetables, represent the largest share of goods shipped via air and on passenger planes in particular, followed by textiles and medicines.