As India inches closer to the ambitious target of 10MMT of air cargo handled per year by 2030, one question that is being asked is: Why are there so few freighter operators from India? One of the major reasons is the high belly capacity available in India. Around 80 percent of cargo traffic is carried on passenger aircraft. Today, Blue Dart apart, there are only a handful of freighter operators like Quikjet, SpiceExpress (of SpiceJet) and CarGo (of IndiGo).
     The major obstacle for potential domestic freighter operators is the lack of a level playing field. Three cargo carriers – Air India, SpiceJet and Quikjet – sent an appeal to the Secretary, Ministry of Civil Aviation about the Open Skies Policy for Non-Scheduled Cargo flights.
     In February this year, the Directorate General of Civil Aviation (DGCA) issued a notice which stated: “The operation of foreign ad hoc and pure non-scheduled freighter charter service flights shall be allowed at all international airports in India without co-terminal rights by cargo-only aircraft for three years from the date of issue of the aeronautical information circular.”
     The DGCA’s decision to allow all foreign freighters to land at any international airport in India came after continued protests from the export and logistics industry. The DGCA amended the rule for freighter operations after it reviewed its earlier direction which limited ad hoc and non-scheduled cargo flights by foreign carriers. While the relaxation by the DGCA was welcomed by a number of air cargo stakeholders, especially the perishable trade, the three domestic cargo carriers – Air India, SpiceJet and Quikjet – were of the view that the move would harm them.

     The appeal sent out by three cargo carriers -- Ajay Singh, Chairman and MD, SpiceJet, Ramesh Mamidala, Head of Cargo, Air India, and Capt Preetham Philip, CEO and Accountable Manager, Quikjet were the signatories – pointed out the lack of a level playing field and that “it was crucial to acknowledge the existing hurdles that hinder domestic operators from competing on equal terms with international carriers.” The request to the Ministry of Civil Aviation to bring about changes would not only support the retention of business in the country but also enhance the competitiveness of domestic operators. Also, it will usher in the principle of fairness and ensure that Indian cargo airlines have an equal opportunity to expand and contribute to the growth of the national economy.
     The three carriers emphasized to the Secretary, Ministry of Civil Aviation, that “Indian carriers face barriers in other countries which causes a delay in permits for non-scheduled operations making us uncompetitive in the market.”      The three signatories requested that “airlines of the countries who impose such restrictions should also face similar restrictions for non-scheduled operations in India.”
     The appeal listed out examples of the barriers imposed by foreign countries and airlines. The Civil Aviation Authority of China (CAAC), for instance, has put “many barriers to entry which cause delays in the start of non-scheduled operations by Indian Air Operator’s Certificate (AOC) holders such as CCAR 129 (a regulation that ensures frequent operators to China to comply with CAAC operational and safety standards and requirements) for each station in China to be applied separately; takes approximately 1.5 months; and, Dangerous Goods (DG) permit is not available for Non-Scheduled operations in China”. Similar barriers should be put, said the appeal, for non-scheduled operations of Chinese carriers as they have approvals to operate with non-scheduled flights with DG and do not need the long process like CCAR 129 in India.
     Other examples were listed like Hong Kong, South Korea, Japan, and Belgium requiring NOC/No capacity email from regional/local carriers for the approval of any Non-Scheduled flights with Fifth Freedom rights.
     The letter also pointed out the case of Bangladesh: “Any Non-Scheduled flight to Bangladesh requires payment of heavy royalty to Biman Bangla but the same is not done in India when any Non-Scheduled flight from Bangladesh is operated.”
     European countries and the UK too, were mentioned. All have put up barriers for Indian carriers carrying cargo to Europe. Indian carriers are required to have ACC3 validation of each station in India for carrying cargo to Europe and UK. (Air carriers are required to be designated as an 'Air Cargo or Mail Carrier operating into the Union from a Third Country Airport’ (ACC3) for each non-EU airport from which they fly cargo or mail into the EU.) The letter mentioned that “China, Hong Kong, Singapore, South Korea. etc. are already considered and are not required for ACC3 approvals.”
     As for domestic operations by foreign carriers, the letter from the three cargo carriers mentioned that most countries do not permit a domestic leg (double dipping/co-terminus operation) if there are domestic carriers that perform a similar operation, as the foreign carrier would have the capacity to serve cargo demand for two cities in India. For such an operation to be performed by lndian carriers in another country, the carriers would have to fly back to India, before operating to another domestic location in the foreign country.
     The note pointed out that such moves limited the loads that can be carried, since there will only be point-to-point demand. Any demand to another city in a foreign state would require cargo to be handed over to local domestic carriers, or transported by other means. “In this case also, Indian operators stand to miss out on an opportunity,” the signatories pointed out and mentioned that “it would be prudent for foreign carriers to enter into an interline arrangement with domestic carriers, which is the norm in the passenger airline industry.” That would enable Indian carriers to carry domestic loads.
     Another significant disadvantage that domestic freighter operators face is the use of aircraft. Foreign cargo operators are allowed to use older aircraft which enables them to offer competitive rates. The three signatories mentioned that to ensure fair competition, the 25-year-old plane rule should be applied to foreign operators who operate cargo flights in and out of India. Otherwise, Indian carriers should be allowed to use older aircraft.
     As for the change in the National Civil Aviation Policy (2016) which allows foreign carriers to operate from all international airports in India, the appeal from the three carriers mentioned that there were Indian cargo operators operating out of Indian airports that have capacity as well as regional capability to carry cargo in and out of the country. However. the non-scheduled international charter demand was currently unknown to Indian operators. The appeal requested for a mechanism to be made available through the DGCA for scheduled and non-scheduled cargo operations to enable Indian cargo operators to facilitate both international, as well as domestic cargo operations.
     This, said the letter, would “ensure that Indian cargo operators get a first right of refusal. Not having this visibility proves to be a disadvantage to Indian operators who will miss out on this opportunity. Alternatively, “foreign carriers should enter into an interline arrangement with Indian carriers, which is the norm in the passenger airline industry, to access any other airports other than the six international airports that were approved under the existing policy for non-scheduled cargo operations.”
Tirthankar Ghosh