Bangalore: More than two decades ago, Blue Dart Express Ltd pioneered India’s air express industry. Despite a tough business climate, managing director Anil Khanna says India’s projected growth rates are encouraging and an efficient express service has become central to every successful business. In an interview, Khanna outlined the challenges facing the industry. Edited excerpts:
What is the number and types of planes you have currently and what are your future expansion plans?
Difficult times: Anil Khanna says that one of the biggest challenges facing express operators today is infrastructure—both air and surface.
Currently, we have a fleet of three Boeing 737 freighters and four Boeing 757 freighters operating each night to the seven main metros in India. The fourth Boeing 757 freighter has recently joined our fleet.
Blue Dart has plans to invest in air infrastructure, aircraft, ramping up of ground infrastructure with state-of-the-art facilities, transit hubs with hi-tech material handling equipment, technology, etc.
What are the key challenges you face in air express operations?
One of the biggest challenges facing express operators today is infrastructure—both air and surface. Space at airports, airside (the part of an airport directly involved in the arrival and departure of aircraft) and cityside infrastructure are often inadequate. In addition, parking bays, airside/cityside access and traffic congestion adversely impact costs as well as service quality. Air express companies are constrained by the size of the facilities at the airports, as they have remained the same while the loads have increased manifold.
What is the size of the Indian market in terms of domestic and international express services? What are the growth prospects?
The domestic organized air express market is pegged between Rs1,250 crore and Rs1,500 crore while the domestic organized ground express market is pegged between Rs1,500 crore and Rs1,800 crore.
The outlook for the air express industry in 2009 is probably best described as extremely challenging. What’s difficult at this moment is predictability of the market movement. These are tough times, but cyclical happenings. We believe that these inconsistencies will bottom out with the revival of the economy...
Several air express carriers are waiting in their wings. Is there a market for more competitors?
Blue Dart, operating for the last 25 years, is the leader in the industry. It has been the pioneer having critical domain expertise and enjoys a market share of 43% in the domestic air express industry.
Various airlines are contemplating their entry into the sector, which is a positive sign of the growth and potential of the industry. Moreover, India’s projected growth (rates) are encouraging, and we have a large population entering the consuming segment. Business now extends to the smaller towns and cities of the country, giving ample scope for express (services). In fact, an efficient express (service) now forms the core of every successful business. Therefore, every player has an opportunity to find its niche to fulfil the growing demand for distribution, from production to consumption.
Which are the key routes for an express airline and why?
The key routes domestically would include the seven major metros of the country—Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Kolkata, Ahmedabad. As a validation of the 80-20 rule, these key routes account for maximum traffic. However, smaller business centres now evolving in the burgeoning cities and towns... are increasingly demanding express solutions.
Blue Dart connects the seven metros through direct flight connections every night to service the growing demands in these areas while it also connects and provides services to 21,471 locations across India.
Any plans to fly international?
As part of the DHL Group, Blue Dart already accesses the largest and most comprehensive express and express network worldwide, covering over 220 countries, and offers an entire spectrum of distribution services including air express, freight forwarding, supply chain solutions and customs clearance.
How do you manage last-mile connectivity and how critical is that?
Blue Dart provides door-to-door express solutions, where air transportation is one key component, the others being an integrated air-ground infrastructure to enable last-mile deliveries within a short time frame and at globally benchmarked quality levels.
Our ground fleet of 5,669 vehicles ensures last-mile connectivity. Advanced technology is an intrinsic part of the process, as tracking and optimizing resources becomes of paramount importance.
The traditional modes of fleet tracking in India, which include making long-distance calls en route, predefined points or asking the driver to keep reporting on its location at regular intervals, are now passé. Technology has now moved to the next level in the form of a new tool—GPS (Global Positioning system)— and Blue Dart being the technology leader in the industry has already upgraded its systems to accommodate this revolutionizing technology.
In Blue Dart, we have initiated the use of GPS in all our vehicles as we recognize the fact that synchronization of all activities makes for an efficient supply chain.
Moreover, our shipment track and trace facilities via Internet allow total visibility to customers.