Here Comes Kingfisher Cargo

(Exclusive Interview Part Two: Conclusion)
     Lack of infrastructure at some of India’s premier gateways notwithstanding, Dr Vijay Mallya’s Kingfisher Airlines is getting ready to enter the air cargo business.
     The phenomenal growth in airfreight services to and from India has been attracting new and existing airlines.
     This, despite the fact that inadequate airport infrastructure continues to be a major hurdle that is choking the growth in air cargo traffic.
     The latest to join the queue is Kingfisher Airlines, Brainchild of Dr Vijay Mallya,
     Kingfisher’s Cargo Carriers, will be flying a different route.
     The business model that the Kingfisher chief has drawn up, takes into account the country’s tremendous production advantages in agriculture.
     “With our strong base in agriculture, the country has a large and varied raw material supply for the food processing industry.”
     Incidentally India is the third largest producer of food in the world including production of more than 91 million tons of milk (the highest in the world), 150 million tons of fruits and vegetables (the second largest), 485 million livestock (largest), 212 million tons of food grain (third largest) and also high volumes of eggs, poultry and fish.
     Processing levels, however, are very low. Conservative estimates put processing levels in the fruits and vegetables sector at 2 percent, poultry 6 percent, milk 35 percent, marine products 8 percent, etc.
     The agro and food sector faces several other challenges.
     Long and fragmented supply chains are viewed as being the single largest bottleneck.
     Supply chain constraints together with demand-related issues have cumulatively chalked up inefficiencies.
     Further, inadequate storage has led to unacceptable levels of waste and value loss.
     “Kingfisher has decided to go for cargo.”
     The airline will certainly look at acquiring a couple of freighters.
     As the Kingfisher chief put it:
     “We will not be putting in a couple of aircraft just to fly them all around the country either. “Kingfisher is looking at total logistics
management.
     “Simply put, Kingfisher’s cargo operations will be kept completely separate from its passenger operations.”
     The fleet, Mr. Mallya envisages, would consist of STOL aircraft (short take off and landing). These planes would be able to land or take off from dirt runways and fly into the hinterland.
     Dr Mallya has plans for these carriers to pick up cargo, fruits, vegetables and flowers and fly them to an intermediary cold storage from where they would then be flown out of the country. Citing the instance of flowers, he said, India could look forward to exports.
     “India exports massive amounts of flowers. Just the other day a whole jumbo jet of flowers departed Bangalore for Amsterdam. Obviously, there is very good scope for agricultural produce.”
     As for domestic consumption, Kingfisher would fly cargo to hyper-markets and cater to their special, just in time and seasonal needs.
The handwriting for air cargo is on the wall.
     Soon it will not just be national carriers, Indian (Airlines) and Air India that populate future skies with freighters.
     New entrants GoAir has chalked out plans to play a bigger role in the airfreight market as well.
     Air cargo has risen steadily risen from 4.16 lakh tons in 1998-99 to 4.91 lakh tons in 2000-01, 5.84 lakh tons in 2003-04 and over 6.20 lakh tons in the last fiscal year.
     The high growth rate is the prime reason that aircraft manufacturers Boeing and Airbus have been targeting India looking for sales. Boeing, in fact, had estimated that India’s domestic air cargo market could go up to more than 2.25 lakh tons in 2006 alone.
     A recent study by Drewry and APL Logistics has revealed that India's air cargo traffic could be reasonably expected to register annual gains in the 8 to 10 percent range over the next five to 10 years.
     That prospect is certainly music for airline service providers.
     The other and perhaps, more important plan that Dr Vijay Mallya has chalked out is enhancement of secondary routes, setting aside for the moment challenges at the major metro gateways in the country, given the fact that they face major infrastructure problems.
     In plain speaking “when it comes to infrastructure India still has a long way to go”.
     Take the case of Pune, for example.
     The Pune airport with its international stature has yet to market its ability to handle air cargo, nearly three months after international flights have commenced from there.
     More than 80,0000 tons of cargo, accounting for nearly a third of the cargo cleared presently from Mumbai’s Sahara Air Cargo, is produced at Pune.
     The airport has a Customs facility.
     A number of heavy engineering, light engineering and food processing items could be sent from Pune cargo terminal, but the industry has yet to avail itself of that opportunity.
     Dr Mallya said:
     “The opportunities in the country are humongous.
     “All that is needed is a clear focus and the will to move ahead.”
(Tirthankar Ghosh)