• The Star Staff

GAO study notes barriers to island’s air cargo goals

By The Star Staff

While industry stakeholders identified economic benefits that could result from increasing air cargo operations in Puerto Rico, they held varying perspectives on the potential of the island to achieve such an increase, a Government Accountability Office (GAO) study found.

Puerto Rico seeks to increase the number of foreign air-cargo carrier flights at its airports by attracting existing flights between Europe and Latin America that could use Puerto Rico’s international airports as transfer points for air cargo instead of other Latin American airports.

The move is seen as a potential industry that could bring millions of dollars to the island.

But the GAO report noted that there are different views on the island’s potential to be a cargo hub.

While some industry stakeholders interviewed by the GAO viewed Puerto Rico’s geographic location as advantageous for serving as a transfer point for cargo transported between Europe and Latin America, and the government noted that the island’s location makes it a logical stopping and refueling point for flights between Europe and Central and South America, others noted problems.

“Puerto Rico’s location may be too close to some destinations in Latin America for it to be used as a stopover or refueling destination for flights originating in Europe,” the GAO report said. “For example, Puerto Rico lies more than three-quarters of the way on routes between Frankfurt, Germany, and Panama City, Panama or Bogotá, Colombia. Similarly, several other industry stakeholders stated that Puerto Rico’s interest in increasing air cargo operations puts it in direct competition with Miami International Airport, which has an extensive air cargo infrastructure and already serves as the principal gateway and transshipment point between Latin America and the U.S.”

Some of the industry stakeholders said Puerto Rico’s susceptibility to hurricanes might deter some carriers from operating or expanding on the island.

There are also problems of proximity to distribution networks and customer bases.

“Two industry stakeholders we interviewed said Puerto Rico airports’ lack of connection to other extensive transportation networks, such as access to the types of highway and rail systems that are present at many mainland U.S. airports, limits its ability to attract additional air cargo operations,” the study said.

On the other hand, proximity to distribution networks may not necessarily be a limiting factor for Puerto Rico because some airports that handle large amounts of cargo, such as Ted Stevens Anchorage International Airport in Alaska, do not rely on such access, the GAO report noted. More specifically, most of the cargo handled by the Anchorage airport passes through -- that is, it originates from and is destined to locations outside of -- Alaska, so access to distribution networks or a customer base are not needed. In addition, as an island territory, Puerto Rico has access to maritime cargo networks at its ports in San Juan and in Ponce, on the southern coast of the island.

As for a customer base, some industry stakeholders noted that Puerto Rico’s pharmaceutical manufacturing industry is heavily reliant on air cargo services. Further, products produced by Puerto Rico’s other major manufacturing industries -- including electronics and medical devices -- are among those that are well suited for transport by air cargo, the report said.

But other stakeholders said products from these industries alone may not be sufficient to drive demand for expanded air cargo operations on the island.

The Puerto Rico government stated that the island’s three underutilized international airports have important competitive advantages that can help attract air carriers that are currently using other Latin American airports, and some industry stakeholders the GAO interviewed generally agreed that Puerto Rico has the basic airport infrastructure in place to support expanded air cargo operations. However, other stakeholders said Puerto Rico may not have all the requisite supporting infrastructure, such as cargo loading equipment. The Puerto Rican government acknowledged that additional infrastructure improvements are needed at its airports and that it has taken steps to improve its airport infrastructure.

According to the island government’s economic development promotional information, Puerto Rico’s status as a U.S. territory provides the same level of stability, protection, and operational security to businesses as mainland U.S. locations do, but Puerto Rico carriers would be negatively affected by any changes to air traffic in Puerto Rico, the GAO report noted.