Airlines boost cargo ops amid subdued demand3 min read . Updated: 16 Sep 2020, 09:36 AM IST
- Major airlines increased the number of all-cargo flights to make up for lost passenger revenue
Booming cargo traffic has come as a respite for airlines, which have increased cargo operations to make up for lost passenger revenue with travel demand remaining subdued.
Major airlines. such as IndiGo and SpiceJet, have increased their dedicated cargo capacities by increasing the number of all-cargo flights as demand for the movement of goods, medicines, groceries, and other supplies increased during the pandemic, especially with the restrictions imposed by states.
IndiGo, which is the country’s largest domestic airline and is operated by InterGlobe Aviation Ltd, had during May-June converted 10 of its passenger aircraft into freight carriers with the capacity to ferry up to 20 tonnes of cargo.
The airline has operated more than 1,700 cargo charters, transporting more than 14,300 million tonnes (MT) of supplies between 18 April and 7 September, across 21 destinations within India, besides international destinations such as Bishkek (Kyrgyzstan), Cairo (Egypt), and Tashkent (Uzbekistan).
“IndiGo has already transported cargo equivalent to the loads carried in the last financial year, within the last five months at limited capacity. The airline has earned marginally higher revenue over these months as compared to the earnings over the last financial year," an IndiGo spokesperson said. “At only 32% of regular operations in August, IndiGo generated the highest ever monthly net cargo revenue," said the spokesperson.
At present, IndiGo operates at least 10% more charter and cargo flights than its scheduled commercial flights, said a senior official at the airline.
SpiceJet Limited, which is controlled by Ajay Singh, has a dedicated fleet of eight freight aircraft, including of five Boeing 737s and three Bombardier Q-400s. The airline has recently inducted a wide body Airbus A340 for long-haul cargo operations.
A SpiceJet spokesperson did not comment on the airline’s cargo operations.
With hundreds aircraft waiting out the pandemic, air freight costs have spiralled, with rates to North America from Hong Kong up almost 60% from the previous year. Belly cargo freight rates have increased by 30-60% globally and due diligence suggests that in India they have risen by 7-15%, ICICI Securities said in a research report on 10 September.
Vistara, a joint venture between Tata Sons and Singapore Airlines, has ramped up its cargo operations during the lockdown.
The airline, which doesn't have a dedicated cargo fleet like IndiGo and SpiceJet, operates cargo on the belly of its passenger aircraft.
The carrier, however, operated 34 special cargo flights to transport more than 220 tonnes of essential commercial goods, relief material, and medical supplies, during the lockdown.
"We are leveraging all viable opportunities for cargo services to maximise our revenue. We continue to carry commercial cargo on our scheduled passenger flight and on a few sectors, we have operated special flights carrying cargo on seats as well," a Vistara Spokesperson said.
National carrier Air India Ltd has introduced all-cargo flights on certain sectors during the pandemic, mostly on international sectors, said a senior Air India official adding that the airline will ramp up its cargo operations as the demand picks up.
"We expect demand for air cargo to further rise once a vaccine (for covid-19) is released after trials," the official added.
Spokespersons of airlines like AirAsia India, and GoAir were not available for comments.
Globally, major airlines like Lufthansa, Emirates, ANA Group, among others, have seen a rapid rise in cargo operations, which have kept them from reporting steeper losses even though passenger demand remains subdued.
Air cargo will be critical in the coming months after a vaccine is developed for covid-19 pandemic, which would further need to be distributed across different geographies.
Safely delivering covid-19 vaccines will be the mission of the century for the global air cargo industry, said aviation industry lobby group IATA’s Director General and CEO, Alexandre de Juniac, in a recent report.