Indian carriers bet on cargo as passenger business remains tepid
SpiceJet is inducting a wide-body Airbus A340 freighter which will allow it to operate non-stop flights Africa, Europe and CIS states.
While SpiceJet has been the most aggressive in cargo business (the A340 is its ninth aircraft in cargo fleet), other carriers such as Air India, IndiGo and Vistara too are growing their freight business.
The expansion of cargo operations comes on the back of weak passenger demand in domestic market and limited capacity on international routes. This coupled with lower fuel prices has helped Indian carriers to effectively deploy their aircraft for cargo operations. The shortage of international capacity has also pushed up freight rates and these are nearly double compared to pre-Covid period.
“The induction of our first wide-body cargo aircraft will be a huge game changer in our remarkable journey that has seen SpiceJet emerge as the country’s largest cargo operator. We are confident that our long-haul cargo flights would further help boost Indian businesses, farmers, pharma companies providing them seamless access to newer markets,” SpiceJet chairman Ajay Singh said.
SpiceJet is the only airline in India to have both passenger and freighter planes. It said the A340 can carry 35 tonnes of cargo.
An Air India spokesperson said the airline has introduced cargo only flights on high demand sectors keeping in view the drop in passenger travel and surplus capacity available for cargo carriage. Air India carried 63 tonnes of cargo on three flights from Delhi to Seoul earlier this month and is operating cargo only flights from Bengaluru and Chennai to Singapore. These flights have good loads largely comprising of perishables, Air India said.
International freight movement to/from India declined 57 per cent in June quarter but now both Delhi and Mumbai airports are seeing a pick up in volume. Cargo levels reached 65-70 per cent of pre-Covid levels in July, it is learnt. This is due to increase in frequency of freighters, charters and flights under air bubbles. While pharma and perishables dominated the exports in past few months there has been a pick up in exports of ready made garments, leather and textiles.
Vistara which recently inducted its second Boeing 787-9 aircraft is looking for cargo opportunities from Europe as it plans new routes. A passenger 787-9 aircraft can carry 8-10 tonnes of cargo on India-London route. Vistara operated 34 cargo flights within India transporting 220 tonnes of cargo within India during the lockdown, the airline said.
“Generally global air cargo demand is down by roughly 50 per cent year on year due to the various economic factors etc and India broadly follows the same trend. However, the passenger aircraft international flights have further fallen by upwards of 90 per cent, driving a dramatic collapse in the amount of belly space available for cargo. Hence, this has stimulated many airlines to convert their pax aircraft to fly cargo in the main cabin as well as in the belly too. IndiGo did this in early April and now has around ten aircraft which have the necessary equipment to carry “cargo-in-cabin” and operate as “freighters,” said airline’s chief commercial officer Willy Boulter.
IndiGo operated over 200 cargo only charter flights in last two months to destinations including Bikshek, Cairo and Chengdu.
“Cargo is a good short term opportunity for Indian airlines. It will help them generate extra cash. However it can not compensate for passenger flights until business reaches a significant scale,'” said aviation consultant Vishok Mansingh.
The return of belly space on passenger flights, fuel and freight rates are also factors to watch out for and some executives believe that there may not be sufficient demand for freighters once passenger flights resume normally.
