Australian exporters warn they are facing major export uncertainty because a government subsidy to keep international air trade routes open will end this month.
The International Freight Assistance Mechanism (IFAM) was brought in as a temporary support by the federal government to keep air freight routes open when the COVID-19 pandemic took hold and borders were closed.
South Australian seafood exporter Andrew Ferguson has been relying on IFAM to send produce overseas for two years.
Mr Ferguson sends product to Asia including into Hong Kong and Singapore and said his main concern was potentially losing trade routes.
"With IFAM, it gave us some assurity, that certain flights would stay open because they were subsidised," he said.
Mr Ferguson is exploring all his options after June, including potentially swapping from the fresh to frozen seafood market to use sea freight instead.
"Juggling our production towards frozen is potentially another another solution," he said.
"We're talking cents a kilo rather than dollars a kilo [for freight].
"It's not only a costly exercise and change, changing factory accreditations and processing, operations and things like that with freezing.
$1 billion price tag
IFAM was introduced in April 2020 after international border closures resulted in commercial passenger flights drop by more than 90 per cent overnight.
Australia is very reliant on passenger planes for its air freight and losing them sent shock waves through supply chain lines.
The federal government assistance package ensured planes stayed in the air – even without passengers.
That measure was always designed to be temporary and the last flights will be flown by June 30, 2022.
The previous federal government announced $110 million in funding initially, but it was extended for two years, with the total cost to taxpayers totalling more than $1.042 billion.
Austrade did not respond to the ABC’s request for comment.
'Still a long way to go'
Export Council of Australia chair Dianne Tipping said with IFAM ending, there would be a period of uncertainty.
However, she said she was hopeful international air trade routes would stay open.
"I'm not suggesting it's going to just stay wonderful and rosy," she said.
"It isn't wonderful and rosy now.
"It isn't going to be as severe an impact as if it had stopped last year or in 2020.
"There's been an increase in flights back into Australia, obviously, since the border has reopened."
Direct routes to China and the US were expected to be the most impacted.
The number of passenger flights has been improving but they have yet to return to pre-pandemic levels.
"Air freight has been moving along. Because of the borders opening it has been much more successful in rebounding [than sea freight]," Ms Tipping said.
"There will be a dip, but those planes will still come in, they will still come in to take passengers.
"Our product is still wanted overseas – all products but particularly agricultural products."
