In October 2011, Air Pacific announced plans to restructure its fleet and flight schedules to Australia in response to rising costs and competition from Australian low-cost carriers. This will mean a reduction in the wide-body aircraft flights from seven to three weekly flights from Fiji to Sydney. Papaya exporters are concerned that this will mean available cargo space is reduced to less than half the current volume, from 140 tonnes a week to 60 tonnes.
The value of Fijian exports of red papaya to the Australian and New Zealand markets saw a rapid growth in the first 9 months of 2011, up from F$700,000 (approx. €281,000) in the same period in 2010 to F$2 million (approx. €802,000), with the Australian market taking 85% of exports, up from 70% in 2010. This increase led to projects of total exports of 900 tonnes, 100 tonnes above the previous record levels of exports achieved 10 years ago. Potential export capacity is seen as reaching 2,000 tonnes in the short to medium term, given the current expansion of the area under papaya.
However, the principal agricultural officer for the affected region stressed that ‘the availability of the wide-bodied Air Pacific 747 jets was key to the survival of Fiji’s trade in papaya with Australia’. The export trade to New Zealand which uses sea freighters, without any loss of quality of the products (given the shorter sailing time), will not be affected by the airline’s restructuring plans.
Transport sector developments are critical to the prospects for agricultural exporters across the ACP. However, in the Pacific they constitute a particular constraint, given the distances involved and the limited transport options. Against this background, establishing structures for dialogue between actors along the supply chain, including transport operators, in order to identify evolving trends would appear to be an important area for government initiatives. However it needs to be recognised that transport sector developments will always occur autonomously of the horticulture sector. As a consequence, horticultural exporters need to build flexibility into their marketing strategies, including in their choice of import partner (i.e. selecting one with a number of potential market outlets linked to different transport hubs open to the exporting company).
What is particularly critical and instructive about this specific case is the relative dynamic arising from the interface between the mode of transport and the produce. It was the configuration of the aircraft that led to the protocol of packaging which gave rise first to the growth in export of the Fiji red papaya and eventually to increased production by growers. Even though the airline proposes to increase the number of flights to the market destination, it is really the reduction of the wide-bodied aircraft from the route that is of concern here. This is likely to reduce the payload for agricultural produce ventures. Such a reduction will translate over time to reductions in production, farm-gate purchases and rural employment.
While it needs to be recognised that airlines will always base future planning on their own profitability, this only serves to highlight the need for structures of consultation along supply chains, even where governments are majority shareholders in the airlines concerned. Such consultations could then factor in potential export growth and its contribution to airline profitability, given the scarcely tapped potential of the Australian and New Zealand markets for Fijian papaya export, thereby avoiding the undermining of government efforts to promote exciting new areas of export.