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Business News/ Companies / IAG Cargo to tap Indian airlines to lift volumes

IAG Cargo to tap Indian airlines to lift volumes

The cargo group, which currently operates 56 services to India every week, is looking to shore up its tonnage capacity, which has declined

David Shepherd, CEO, IAG Cargo Premium
David Shepherd, CEO, IAG Cargo

NEW DELHI : The cargo division of European major International Airlines Group (IAG) is seeking partnerships with Indian airlines, considering how the country’s aviation and air cargo segments have outpaced global growth, its top executive said in an interview.

“We have a big partnership in Europe with DHL. They feed our transatlantic services. And, equally we have a partnership with Qatar Airways out of Hong Kong. (In India) we would look at partnerships in future where it would make sense for both parties," said David Shepherd, chief executive at IAG Cargo.

He did not specify which airlines the company was interested in.

IAG Cargo comprises the freight businesses of British Airways, Air Lingus, and Iberia. It reported revenue of €603 million for the period from 1 January to 30 June, an increase of 8.5% compared with the corresponding pre-pandemic period in 2019. Its tonnage, though, was 15.3% lower.

Currently, the cargo group operates 56 services to India every week, up from 49 in 2019. These include three daily services from Mumbai, two daily from Delhi, and one each per day from Chennai, Hyderabad, and Bengaluru.

While the current fleet of Boeing B777, B787 can carry 16–25 tonnes of cargo for IAG Cargo from India, Shepherd is hopeful of a jump in tonnage capacity with the inclusion of Airbus A350 from next week.

“India is an enormous opportunity in terms of IAG Cargo. India is consistently the best performer in our network. Our biggest challenge is the capacity that we can serve the market with," Shepherd said.

“The one thing which sets India apart from many other markets is the diversity of the manufacturing base, whether it is pharmaceutical, automotive, aerospace, e-commerce. We have plans to increase the pharmaceutical business here," he added.

The company recently invested in excess of €100 million to upgrade its cargo facilities at London’s Heathrow airport, which targets premium shipments, including temperature-controlled pharmaceuticals. The group, Shepherd said, is confident about competing with the likes of Air India on the back of its comprehensive cargo plan for delicate categories of freight.

“It is right that India has a national airline that is worthy of the name. We just think that the services, investments we have made in the industry, particularly pharmaceuticals, place us very well against our competition," Shepherd said. “We hit more gateways in North America (30) than any other international carrier."

With the Indian government’s plan to increase cargo handling by Indian airlines to 10 million tonnes by 2030 from 3.2 million tonnes now, the Tata Group-backed Air India has firmed up plans to tap 20% market share in two-three years with its incoming fleet of 70 wide-body aircraft.

In India, currently, Emirates, Qatar Airways, Aerologic, Cathay Pacific and Air India are the top five cargo carriers.

Ongoing talks related to the free trade agreement between India and the UK are also expected to bring clarity on whether the bilateral air service agreement will be expanded.

IAG Cargo expects to garner a share of 7-10 services if the bilaterals are expanded by 14 flights a week.

“The UK government will decide the allocation of those slots. I am hopeful of getting some slots...We may need to think about the way in which we expand our partnerships in this part of the world to satiate the demand," Shepherd said.

He, however, reiterated that India needs to have a policy allowing room for fair competition between international and national carriers.

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Published: 29 Nov 2023, 06:52 PM IST
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