What Slows India All-Cargo?

BAE is converting ATP Freighters that will be used by First Flight to start its own Indian domestic freighter operations. The three aircraft (msn 2039, 2051 and 2054) will be delivered during the second quarter of 2006 and will be configured as E-Class bulk freighters similar to the ATP freighter delivered to West Air Sweden, the company that pioneered this excellent and versatile air cargo lifter.

     Would-be cargo carriers are upset that India’s dynamic growth in the domestic passenger airline business is impacting companies that otherwise might have been planning to launch their own freighters.
     The tremendous growth in air traffic, characterized by the proliferation and emergence of new low-cost carriers (LCC) in Asia Pacific, has garnered the interest of foreign investors. Also, an increase in domestic and international fleet movements as well as fleet utilization has hiked aviation stocks.
     These factors are supporting growth in the commercial aircraft and engine maintenance, repair and overhauling (MRO) markets in Asia Pacific.
     Frost & Sullivan said recently that the Asian Pacific Commercial Aircraft & Engine MRO Markets delivered about $8.71 billion in 2005 and may reach $12.90 billion in 2011.
     Frost & Sullivan Industry Manager Subhranshu Sekhar Das believes that governments in Asia Pacific are striving hard to liberalize the aviation sector by introducing open skies policies and permitting domestic airlines to fly abroad.
     The domestic cargo carriers or rather the potential cargo carriers are not happy with that prospect.
     The prime reason for their dour mood is driven by the entry of the new low-cost airlines and induction of more aircraft by existing and new airlines, which have grabbed much of the growth in the domestic air cargo business.
     India’s domestic airlines today carry nearly 70 percent of air cargo in the belly of passenger aircraft.
     The only cargo company operating its own freighters in the country, Blue Dart, flies at 100 percent capacity and has recently made it clear that it is looking to add two more aircraft.
     Cargo companies like DTDC, First Flight, Shreyas and even TNT have shelved their plans to launch their own freighter aircraft.
     Despite all of this, the domestic air cargo market is predicted to grow at a fast rate of 7 percent. The reason why local cargo companies are not going all-cargo like Blue Dart is because it is easier to use the growing fleet of passenger airlines than launch their own freighter services.
     One person who seems happy at the prospect is Subhasish Chakraborty, the chairman of Bangalore-based DTDC Courier.
     He said that the open sky policy was indeed a boon since it had provided the opportunity to send cargo to various cities at different times.
     Global major TNT, for instance, is quite strong in the domestic cargo sector but it will not go for freighters now.
     “There is a whole big fleet of aircraft available out there,” says Sanjiv Kathuria, (right) head of marketing, TNT India.
     A notable exception is First Flight that has leased three BAE ATP freighters, which will be deployed to start its own freight operations.
     Founded in 1986, First Flight Couriers Private Ltd. has developed into India’s largest courier company by volume with 721 offices spanning 1,800 destinations in the country and serving 229 countries worldwide. FFCL has over 8,000 employees and handles over 150 million shipments every year.
     Mr. R.K. Saboo, Deputy Managing Director of FFCL told FT:
     “Our company has grown dramatically in the past 19 years and we are now poised to enter a new phase of growth and development with the creation of our own domestic freight airline.
     “By having our own aircraft, dedicated to carrying our own shipments, we can tailor our products to offer an even better level of service to our customers.
     “We are delighted with the ATP Freighter, which is the best aircraft in the 8-ton class, with a big easy sliding side door for container loading for our requirements.”
(Tirthankar Ghosh)