A new strategy to develop the Hunter air freight industry says Newcastle Airport should seek government funding for an international cargo terminal.
The Hunter Joint Organisation's Hunter Airports Strategy says Williamtown is well positioned to export a range of farm produce, defence-related cargoes and other "fast-moving" consumer goods but will struggle to attract private investment in freight infrastructure.
The federal government is spending $66 million on upgrading the Williamtown runway for larger, long-haul aircraft and kicking in $55 million for a new $110 million passenger terminal.
The airport, which is owned by Newcastle and Port Stephens councils, hopes to attract overseas passenger and freight services when the new international terminal opens next year.
The airport's 2036 master plan says freight exports represent a "significant" potential market.
But the Hunter JO report says the airport will not generate enough freight revenue to convince cargo "forwarders" or terminal operators to invest in start-up infrastructure such as a cargo building, cold storage and handling equipment.
The report says the lack of freight infrastructure could threaten the airport's ability to attract international passenger services.
"It also presents a threat to the ongoing viability of such air services given the importance of air cargo revenue as part of the overall aviation business case," it says.
"This critical capability must be provided so that Hunter region importers and exporters can use the air freight services at Newcastle Airport.
"Key stakeholders should work together to attain funding for this essential infrastructure project."
The JO says a cargo terminal would cost about $27 million.
"Air cargo volumes at Newcastle Airport will grow over time, however, in the early days of the international air services schedule, it is unlikely that there will be sufficient revenue opportunities to drive a decision by either freight forwarders or cargo terminal operators to undertake the capital investment required to establish licensed facilities," the report says.
"This represents a serious constraint and threat to the region's ability to benefit from the air cargo capabilities offered by international carriers."
The report lists volumes of produce which could be exported by air from Newcastle, including up to 50 tonnes a week of beef and lamb bound for markets in Asia, Europe, the US and Middle East.
It says Newcastle could send 250 tonnes a year of wild-caught tuna from one supplier to Japan and the US, along with avocados, macadamias and other fruits and vegetables.
The report says the airport's freight services could cater for customers from the northern suburbs of Sydney to the Queensland border.
