Mumbai: Logistics firm Blue Dart Express, the market leader in the Indian air express, has earmarked about Rs 1.5 billion of capex in 2012 to expand air and ground services, a senior official said on Tuesday.
The company had spent a similar amount over the past two years as capex and will not cut investments in 2012, despite slowing economic growth, finance director Yogesh Dhingra said.
“Our long term plans will not be impacted by a six-to-eight month dip,” he said.
Air cargo sitting for transportation. Photo: Bloomberg
Debt-free Blue Dart, which has cash reserves of about Rs 1 billion, will fund the investment through internal accruals.
Blue Dart, in which DHL Express holds about 81%, follows a calendar year for financial reporting.
Blue Dart plans to invest up to two thirds of its capex on upgrading and expanding air infrastructure, Dhingra said.
The firm, which has a 44.5% market share of India’s air cargo service, plans to expand air capacity by 20% annually as it seeks to enter tier 2 towns in the north east and southern India, managing director Anil Khanna said.
The firm has a fleet of seven Boeing aircraft, five of which are on operating lease.
Dhingra said the firm was cushioned from rising jet fuel prices as it has put in place a “fuel surcharge mechanism”, which enables it to pass on increases in costs to customers.
“We launched the fuel surcharge mechanism because we can’t go to our customers and change the rates every month.
Whatever fluctuations happen in crude oil or ATF (aviation turbine fuel), the surcharge will be accordingly applied”.
DHL on Tuesday also said it has launched a carbon neutral service for its customers to neutralize their carbon footprint by paying an offset charge over and above their shipping rates.
Blue Dart shares closed down 0.88% at Rs 1,474 in a firm Mumbai market.