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Air freight firms begin showing signs of life again

Air freight firms begin showing signs of life again
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First Published: Tue, Nov 03 2009. 10 32 PM IST

Early mover: A Deccan Cargo and Express Logistics aircraft at the New Delhi airport. The carrier started flying international cargo with two aircraft in May and plans to expand its fleet to eight plan
Early mover: A Deccan Cargo and Express Logistics aircraft at the New Delhi airport. The carrier started flying international cargo with two aircraft in May and plans to expand its fleet to eight plan
Updated: Tue, Nov 03 2009. 10 32 PM IST
New Delhi: Buoyant growth in India’s air cargo movement will see at least one airline firm taking wing in the next six months and another expanding its operations.
Aryan Cargo Express Pvt. Ltd is likely to start flying early next year, according to managing director Mukut Pathak. “The launch window is between 15 January and 1 February,” he said, adding that the period between February and March is peak season for air cargo.
Early mover: A Deccan Cargo and Express Logistics aircraft at the New Delhi airport. The carrier started flying international cargo with two aircraft in May and plans to expand its fleet to eight planes. Ramesh Pathania / Mint
The airline firm will start services with two Airbus A310 freighters it has leased from a Turkish firm.
As India recovers from an economic slowdown, domestic air freight has been growing in double digits year on year since May, compared with a contraction between October last year and March, according to data released by the Airports Authority of India (AAI). Overseas freight has also started growing marginally since August.
AAI expects local cargo movement to grow by 5% in the year to March and overseas cargo by 2%, an official of India’s airport regulator said on condition of anonymity, as he is not authorized to speak with the media.
The growth has been “very encouraging for the last three months (till August)”, the official said. Data for September is yet to be released.
Although the civil aviation ministry granted licences to a clutch of firms to ferry air cargo since 2007, none started services as an unprecedented global financial crisis and recession in developed markets dampened demand.
The G.R. Gopinath-promoted Deccan 360, run by Deccan Cargo and Express Logistics Pvt. Ltd, was the sole exception. The carrier started flying international cargo with two aircraft in May.
With the market now turning positive, Deccan 360 plans to expand its fleet to eight planes. It will start national operations from 4 November, using Nagpur airport as its local hub. “We will be able to deliver a packet to 50 Indian cities overnight,” Gopinath said.
Deccan 360 will also end its Dubai operations and connect Nagpur with a direct service to Hong Kong. The carrier will deploy three Airbus aircraft and five turbo-prop planes.
“Aircraft will be coming from 15 cities every day at 1.30am to Nagpur and depart at 3.30am. They will exchange cargo and go back to respective cities so that you can be given your parcel at 10 o’clock,” Gopinath said.
Aryan Cargo’s Pathak said his firm has a start-up capital of Rs100 crore, which is a mix of loans and promoter equity. To start with, Aryan Cargo will fly to Bangkok and Sharjah from New Delhi and expand from the next fiscal year starting 1 April, he said.
It has also applied to lease two more A310 aircraft from the National Aviation Co. of India Ltd-run Air India, a government official familiar with the process said, but declined to be named.
Currently, Air India operates four Airbus A310 freighters and six Boeing 737s from its cargo hub at Nagpur. The state-owned carrier had in September pulled its lone international cargo service connecting Chennai and Mumbai to Frankfurt.
Air India plans to lease out two A310 aircraft and sell the remaining, leaving it with an all-Boeing fleet of 737s cargo aircraft that will be used mostly to serve air mail for India Post, the official said.
Besides Aryan Cargo, Quikjet Cargo Airlines Pvt. Ltd, Deccan Chronicle Holdings Ltd-promoted Flyington Freighters Pvt. Ltd and Avicore Aviation Pvt. Ltd are among those that have been lined up for take-off since they were granted permission to fly air cargo.
An analyst, however, sounded a note of caution. “There has been a lot of hype and no results,” said Y.S. Shashidhar, vice-president and country director, Middle East, at consultancy firm Frost and Sullivan. “For sure, if they are clear in their mind and have a sound management team in place, there is space for two-three cargo operators, especially between metros and non-metros. But there is a big if and that if is whether they are serious about doing business.”
tarun.s@livemint.com
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First Published: Tue, Nov 03 2009. 10 32 PM IST