The parent company of Germany’s national passenger and cargo airline, Lufthansa Group AG, has said it was in talks with Jet Airways (India) Ltd to create a full-fledged cargo airline or use Jet’s passenger planes to carry cargo between India and Europe.
While it was not clear which way the airlines would decide to go, the creation of a full-fledged cargo airline appears to be less likely because of tax and legal restrictions, said a senior official at Lufthansa, who did not want to be identified because a final decision had not been taken.
Jet Airways spokesperson A. K. Sivanandan said his company was going ahead with plans for a dedicated cargo airline by December 2007, but did not confirm if that involved Lufthansa.
Jet Airways chairman Naresh Goyal had said earlier this year that he wanted to diversify the company’s revenues by increasing the amount of cargo the airline’s passenger planes carry in addition to passenger’s luggage.
A final deal was not expected to be concluded before the end of this year, and the senior Lufthansa official said it was unlikely that they would use Nagpur as a cargo hub.
Instead, they would likely fly to the same six destinations that Lufthansa flies passenger jets into—the four metros, Hyderabad and Bangalore.
That cargo capacity, called belly capacity in aviation jargon, has become additionally desirable now that Jet Airways has a hub in Brussels, and will be operating direct flights to New York using brand new Boeing 777s.
Lufthansa’s cargo division, which has 19 MD-11 aircraft, is the biggest cargo airline flying in and out of India—carrying 1,500 tonnes of cargo a week—and the second biggest in the world.
India’s domestic cargo business is currently dominated by DHL subsidiary Blue Dart Aviation Ltd. It is the only country among the 10 biggest economies not to have a flag-carrying cargo airline.
Instead, almost all of its international trade travels on cargo and charter flights such as Lufthansa or Korean Air’s.
The civil aviation ministry has tried to encourage increased investment in cargo activities, and state-run Indian Airlines Ltd will be changing at least six of its older passenger planes to cargo freighters, while Air India Ltd will be changing two.
The Hyderabad-based Flyington Freighters has ordered six Airbus A330-200Fs to create a fleet of cargo planes that it intends to use both domestically and internationally.
Right now, India has just eight cargo freighters.
Lufthansa tried to launch a cargo airline in India in the late 1990s in a tie-up with the Hinduja group, but that effort faltered.
The company that Lufthansa incorporated in India still exists on paper and may be used for this future venture.
(Tarun Shukla contributed to this story.)