Monday, February 13, 2012

Colombia's largest airport and airline expand due to flowers and US free trade agreement

Colombia is one of the four biggest flower producing countries alongside the Netherlands, Kenya and Ecuador. Combined, the four countries have an 83% share of the world’s flower industry, valued at about $100bn.

In anticipation of Valentine’s Day, more than 500,000 Colombian flowers will be shipped around the world.  The majority, however, will be shipped to the US. In fact, nearly all US flower imports originate in Colombia and Ecuador. 

The South American floral supply chain is an intricate one.  With an average shelf life of only about 10 days, the movement of flowers takes a lot of planning, collaboration and handling including special humidity-controlled shipping containers and refrigerated cooling facilities for transport.  The US destination for most South American flowers is the Miami International Airport, the US’s largest flower entry port. Once arrived, the flowers then have to be inspected before being cleared.
Flowers account for 70% of Colombian air exports to the US by volume. As such, the country’s major airport, El Dorado, located in Bogotá, is undergoing several expansion and renovation projects. Once completed, the airport will double its capacity to not only handle the country’s second largest export, flowers, but also in anticipated demand expected from the recently signed free trade agreement with the US. Cargo volume is forecasted to grow by as much as 20% this year with the completion of the second of two cargo terminals in June.

Avianca Taca Holding, owner of Colombia’s biggest airline is also looking to expand.  Recently, it doubled its cargo fleet with a $500m purchase of four Airbus freighters. The company also stated it is considering cargo acquisitions. Avianca Taca has a Miami cargo hub and plans to increase its 35% share of Colombian air exports to the US.